1.4    ERP Cloud Building Blocks

From an architecture perspective, it’s important to understand how SAP S/4HANA Cloud is designed. Understanding the basics of SaaS, platform as a service (PaaS), and infrastructure as a service (IaaS) will provide the logical framework necessary to understand how to deploy SAP S/4HANA Cloud and to support the product after go-live. Figure 1.6 breaks down the various aspects of cloud software deployment within the SAP S/4HANA Cloud world.

Figure 1.6    ERP Cloud Building Blocks

In the following sections, we’ll discuss the ERP cloud building blocks in greater detail, including their purpose, functionality, and impact on SAP S/4HANA Cloud.

1.4.1    Software as a Service

Although SaaS has been around as a concept within the information technology (IT) world since the 1990s (and arguably before), SAP begun to build SaaS products only in the last few years. Two important examples are SAP S/4HANA Cloud and SAP Cloud Platform.

Simply put, SaaS products are multitenant software products residing within the cloud. (Multitenant refers to software architecture designed to be used by multiple users at the same time without impacting other concurrent users.) One of the beauties of multitenant software is speed to market. For example, within the multitenant software world, enhancements to software can be rapidly applied for all users with minimal disruption. SAP takes advantage of this capability by offering quarterly updates and pushing out new features, such as value-driving applications using machine learning. Whether via bug fixes or product enhancements, SaaS offerings provide the luxury of proactive improvement for all users.

SAP S/4HANA Cloud is founded on SaaS-based architecture with SAP HANA at its core. This software delivery platform is far from mind-blowing outside of the SAP world, but nonetheless its structural design is newer for SAP-built products (as opposed to the numerous recent SAP SaaS acquisitions).

One of the advantages of SaaS architecture specifically for SAP S/4HANA Cloud is its ability to rapidly innovate. The SAP S/4HANA Cloud innovation cycle is like that of no other SAP product within the portfolio with its quarterly innovation cycles pushed to the end user. This is particularly valuable when it comes to delivering solutions based on fast-changing technologies such as machine learning and AI, powered by SAP Leonardo. With machine learning, SAP has stated its aim to design software that learns from its users and can predict what information they need based on context. It will be difficult for on-premises deployments to compete in this space for quite a while as their update cycle is on the order of years. Quarterly updates with machine learning and real-time analytics capabilities can power functions such as transaction fraud detection, assessing job applicants, smarter procurement, and more. Figure 1.7 illustrates SAP S/4HANA Cloud’s quarterly innovation schedule.

Figure 1.7    SAP S/4HANA Cloud’s Quarterly Innovation Cycle

Another distinct positive associated with SaaS-architected products is end user cost. Because software companies invest in research and development, as well as product design, code construction, testing, and support, leveraging a single code base (i.e., one program design, delivery, and support) provides cost-efficiency savings, which are passed on to the customer. In short, SaaS saves customers money. The potential for direct cost savings are multiplied many-fold by better time-to-value with faster deployment, faster user adoption, and faster upgrade cycles.

Furthermore, to make SAP S/4HANA Cloud even more interesting, its code base is built on the same code line as the on-premise version. Again, greater SAP efficiencies equate to lower subscription costs, which in turn drive licensing costs down.

1.4.2    Platform as a Service

PaaS is the next technology support layer down from SaaS. Simply put, PaaS provides the appropriate technology platform necessary for software residence as well as the layer that enables you to develop and run extension on SAP S/4HANA Cloud. Specifically, for SAP S/4HANA Cloud, SAP HANA is the database, which is part of the SAP Cloud Platform which itself is the PaaS, while the application layer of SAP S/4HANA Cloud is written in ABAP and SAPUI5.

For the end consumer, the PaaS layer is invisible and a nonfactor, but this critical component of the SAP S/4HANA Cloud stack can’t be underestimated. Not only does PaaS provide the foundation for business-critical applications and associated extensions, but it also eliminates yet another cost for the consumer. Without PaaS, the software layer would have no ability to exist. Although PaaS isn’t truly a free component with the ERP cloud model (because the cost is ultimately passed down to the consumer), the cost can be spread across multiple customers leveraging the greater platform, in turn lowering the individual usage per customer.

1.4.3    Infrastructure as a Service

IaaS is another critical layer within the ERP cloud delivery mechanism. IaaS exists as the “iron” (i.e., hardware for servers, storage, networking, etc.) and supporting services responsible for hosting all software and platform requirements. Additional components within IaaS include services involved in supporting all the hardware. Because SAP S/4HANA Cloud resides off-premise from customers in centralized datacenters, fundamental data center infrastructure and support services are required, such as facilities like buildings, cooling and heating, and so on. All of this is hidden from the end consumer, just like PaaS.

SAP S/4HANA Cloud’s infrastructure resides within SAP HANA Enterprise Cloud, which is hosted either directly by SAP or through one of SAP’s trusted strategic suppliers, such as SAP hosting specialists like Freudenberg IT (FIT), IBM, and others.

Another component within IaaS is the managed services that support the iron. Although these services are different from application management services (AMS), they provide critical infrastructure-related support to the database and operating system.