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Public vs Private Cloud: Which One Is Right for You?
#FocusOnBestPractices
Know the key differences between SAP S/4HANA Public and Private Cloud to choose the model that aligns with your business goals.
Mukund Shinde
Sr. Vice President (Enterprise Solutions – SAP Practice)
June 30, 2025
The software landscape today is rapidly changing, fueled by the swift growth of cloud adoption. In 2021, 70% of companies were satisfied with their on-premises infrastructure; now, in 2024, it has declined dramatically to only 38%. At its core is a critical choice that will shape your digital direction: choosing SAP S/4HANA public vs private cloud. With SAP’s 2027 deadline to discontinue ECC support looming on the horizon, this decision is no longer optional, it’s strategic. It sets the stage for how well your business can scale, streamline, and remain competitive in a digital-first world.
What is Public Cloud?
A public cloud is a preconfigured solution with limited customization to applications, offering strong security, where applications are deployed for multiple clients in a shared environment.
What is Private Cloud?
A private cloud is a dedicated environment for one organization, offering greater control, security, and customization, hosted by a third-party provider.
Embracing the Cloud Paradigm Shift
The SAP S/4HANA Cloud transformation is more than a technical change; it is a strategic transformation of how enterprises execute their mission-critical operations. Recognizing that not every business requires the complexity or inflexibility of legacy on-premises systems, SAP has developed two distinct cloud models, each tailored to complement different enterprise priorities and IT environments.
The momentum for SAP S/4HANA continues to rise, with the market expected to reach $96.18 billion by 2034 . The boom is part of a larger thrust toward real-time decisions, business agility, and streamlined, intelligent business processes.
What is SAP Public Cloud?
SAP S/4HANA Public Cloud signifies a multi-tenant SaaS solution developed for organizations that are willing to adopt speed, simplicity, and standardization. It supports a greenfield implementation model, allowing businesses to embrace best practices without legacy customizations. It enables a greenfield implementation model, enabling businesses to embrace best practices without legacy customizations.
Key Benefits of SAP Public Cloud
- SAP manages infrastructure, maintenance, and security, enabling businesses to focus on their core activities.
- Automatic updates provide constant access to new features and compliance requirements.
- Flexible, subscription-based pricing helps reduce the total cost of ownership (TCO), making it ideal for businesses and users with predictable and scalable requirements.
With its standardized deployment and reduced operational overhead, SAP S/4HANA Public Cloud is well-positioned for enterprises seeking to achieve rapid time-to-value and process alignment.
Why Public Cloud Is Acquiring Traction?
As organizations seek to improve efficiency and productivity, SAP S/4HANA Public Cloud is emerging as the preferred deployment option for visionary businesses—particularly in industries such as professional services, retail, BFSI, manufacturing, automotive, pharma, and high-tech.
By 2025, IDC predicts 55% of organizations will adopt a cloud-centric model to enhance IT resilience and centrally manage data protection across core, edge, and cloud environments.
It removes infrastructure and server management overhead by providing a fully managed, elastic environment with inherent resilience and global availability. Businesses enjoy quicker deployments, automated patching, and embedded best practices for speeding compliance, which is particularly useful for companies running across multiple jurisdictions with consolidated global operations.
Limitations and Considerations
- Customization is limited to predefined platforms, requiring businesses to follow SAP best practices rather than accommodating specific, non-standard requirements
- Direct changes to the system’s core functionality are not allowed.
- Access to backend systems via traditional interfaces is restricted which may require adaptation to standardized APIs and tools provided by SAP.
What is SAP Private Cloud?
SAP S/4HANA Private Cloud provides a one-tenant setup with customizations and core code changes, best suited for companies with sophisticated, industry-specific requirements. The infrastructure is controlled and managed by SAP, but clients have the option to choose their preferred cloud hyperscaler.
Architecture and Control
- It runs exclusively on top hyperscalers such as AWS, Azure, or Google Cloud, as the option to run on SAP data centers is no longer available.
- Can accommodate greenfield, brownfield, or selective data transition strategies.
- Allows customization, partner add-ons, and backend access through SAP GUI.
- It covers 64 nations and 25 sectors, with more comprehensive functionality than the public version.
Investment and Complexity
While this model offers very high flexibility, it entails a greater initial expense and ongoing management tasks. Companies are left to establish and manage their own security and compliance infrastructure, something that may serve smaller companies well that deal in highly controlled environments with specific control needs.
Key Differences Between Private and Public Cloud
Automate checks and responses so threats can be stopped faster, with less room for human error.
| Feature | SAP S/4HANA Public Cloud | SAP S/4HANA Private Cloud |
|---|---|---|
|
Deployment Model |
Multi-tenant SaaS |
Single-tenant private environment |
|
Infrastructure Control |
Fully managed by SAP |
Partially managed by SAP |
|
Customization Level |
Limited changes |
Unlimited changes |
|
Security Responsibility |
Standard SAP Security |
Flexible SAP security |
|
Implementation Approach |
Greenfield only |
Brownfield, selective, or even ECC migration to S/4 |
|
Pricing Model |
User-base |
Subscription- based |
|
Industry Coverage |
Now available in over 55 countries and supports 33+ languages. |
25 industries, 64 countries |
|
Scalability |
Highly elastic |
Requires infrastructure expansion |
Security and Compliance Considerations
Security is one of the main differentiators between SAP S/4HANA Public Cloud and SAP S/4HANA Private Cloud. SAP takes care of security and compliance in the Public Cloud, adhering to standardized best practices, suited for organizations with minimal in-house capability. Yet, it could be inadequate for highly regulated industries.
The Private Cloud places a total burden on the customer, entailing higher investment in security assets. However, it provides flexibility to customize compliance models and retain complete control over data governance, which is critical for heavily regulated industries.
Performance and Scalability Dynamics
Performance in the SAP S/4HANA Public Cloud is SAP-tuned and uniform with scalability embedded through elastic, on-demand resource provisioning, perfect for varying workloads.
Conversely, the SAP S/4HANA Private Cloud offers flexible performance tailored to the organization’s infrastructure management. Scaling can be done, but it requires more technical and planning control.
Cost Analysis and ROI Considerations
Public deployments provide lower capital expenditures and stable costs, so they are cost-effective for organizations with variable workloads.
Private deployments entail greater initial investment but can provide improved long-term value for organizations with steady operations.
Total implementation costs can vary from 400k including license cost at lowest complexity level, potentially reaching hundreds of millions for complex rollouts, depending on the deployment model and organizational requirements.
Industry Trends and Future Vision
Approximately 45% are already live or in the process of migration, and an additional 30% are expected to go live within 6 to 24 months. Although private environments have traditionally experienced greater adoption due to the flexibility they offer, the Public Cloud has reduced the gap much more dramatically in 2024, with its uptake accelerating remarkably in growth-stage companies and mid-market firms.
Enterprises seeking to implement intelligent automation, embedded AI, and the ongoing delivery of innovations are increasingly turning to public cloud services. In addition, SAP’s ambitious roadmap for Public Cloud innovations, such as industry-specific flavors and GenAI capabilities, is an attractive option for CIOs seeking innovation without complexity.
Benefits of SAP Private Cloud
The major Private Cloud advantages are:
Flexibility: Deploy and scale infrastructure instantly in dedicated cloud environments with uniform operations and workload mobility.
Cost and Control: Centralized management provides complete visibility and control, enabling efficiency and cost savings; however, costs are generally higher compared to public cloud deployments.
Run Any Workload: Run both legacy and new applications—from mission-critical applications to AI and Kubernetes—on one platform.
Security and Resilience: Take advantage of a secure, isolated environment with enterprise-level security, compliance, and inherent resiliency for high availability.
Which Edition Works Best For Whom?
Here’s a side-by-side recommendation summary:
| Business Profile | Recommended Edition | Why |
|---|---|---|
|
Mid-market / greenfield |
Public Cloud |
Fast ROI, lower TCO, minimal infra footprint |
|
Highly regulated industries |
Private Cloud |
Full control, compliance customization, performance management |
|
Custom-process enterprises |
Private Cloud |
Deep integration capabilities, bespoke modules |
|
Seasonal/variable demand |
Public Cloud |
Elastic scaling and cost-effective flexibility |
|
Stable workload, cost-sensitive |
Public Cloud |
Predictable CAPEX may be more affordable long-term |
|
Innovation-focused organizations |
Public Cloud |
Continuous updates with AI and analytics benefits |
How to Choose the Right Cloud for Your SAP Environment?
Choosing between SAP S/4HANA Public Cloud and Private Cloud hinges on aligning the solution with your organization’s unique needs across five key dimensions:
| Choose Public Cloud if: | Choose Private Cloud if: |
|---|---|
|
Your organization values rapid implementation and standardized processes |
You require extensive customization and control over your ERP system |
|
You prefer SAP to handle infrastructure management and security |
Your industry demands specific compliance and security measures |
|
Your business operates with relatively standard workflows |
You have significant existing SAP investments to protect |
|
You’re comfortable with limited customization options |
You need integration with complex third-party systems and partner add-ons |
Why Korcomptenz?
Korcomptenz, an SAP-certified partner, assists companies through each phase, from analysis of business cases and TCO modeling to fit-to-standard workshops and migration implementation. Whether you’re adopting public, private, or hybrid deployment models, we offer tailored advisory services to meet your unique business needs. Our library of templates for data migration and BPDS (Business Process Design Scenarios) ensures faster, more accurate deployments with minimal disruption.
Get a tailored-to-your-needs advisory for your SAP S/4HANA Cloud ERP implementation, public, private, or hybrid. Intelligent ERP is the future. Let’s respond to it together.
With our expert guidance, you can successfully manage fast-paced transformation in production-ready landscapes, taking advantage of state-of-the-art tools and battle-tested best practices from a proven, experienced SAP on Cloud partner.
Final Words
Unlocking your SAP S/4HANA Cloud path isn’t a one-size-fits-all approach. The choice between public cloud versus private cloud directly affects agility, cost, innovation, and control. If your goals are rapid deployment, lower total cost of ownership, seamless upgrades, and faster access to innovation like AI and automation, the Public Cloud is a strategic fit. If your business requires complete customization, strong governance, and rigorous performance management controls, the private cloud is the ideal choice. And if your strategy requires flexibility, a hybrid route through RISE blends the best of both worlds.
Discover your ideal SAP S/4HANA Cloud path. Contact us for a free consultation to get started.
Focus on you
FAQ’s About Public vs Private Cloud
Is the SAP Public Cloud secure?
Yes, it has enterprise-level security with ongoing monitoring, data encryption, and compliance with key international and industry standards.
Can I customize SAP applications in the Public Cloud?
Customization is feasible but restricted to ensure upgrade compatibility; extensions are most often created using the SAP Business Technology Platform.
Which option is more cost-effective?
SAP Public Cloud tends to be cheaper with lower initial cost, streamlined infrastructure, and standardized implementation and maintenance.
What's the difference in upgrades and maintenance between the two?
Public Cloud upgrades are automatic and regular; Private Cloud provides more control over scheduling, with more customized maintenance options.
Is SAP Private Cloud identical to on-premise?
No, SAP Private Cloud provides cloud flexibility and managed services but with more control—separate from legacy on-premise setups.
Can I migrate from SAP Public Cloud to Private Cloud?
Yes, migration is feasible, although it needs careful planning to handle data, customizations, and platform compatibility. However, SAP does not recommend migrating from public to private cloud unless driven by specific compliance or regulatory requirements.
Which U.S. industries typically utilize SAP Private Cloud?
Mainly healthcare and public sector and highly complex industry due to compliance, control, and performance requirements.
