SAP HANA: Cloud vs On-Premises

By Gilad Maayan
Published 06/29/2020
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SAP HANA is a popular relational database system, typically used for big data operations. It is 100x faster than traditional relational databases, and provides real-time analysis and parallel processing capabilities. You can deploy SAP HANA on-premises or in the cloud, through the Cloud Foundry platform or run it on Azure, AWS, and GCP. In this article, you will learn about the main differences between running SAP HANA on-premises or in the cloud.


SAP HANA is an in-memory, column-oriented, relational database system. You can use it as a database server to store and retrieve application data. HANA’s in-memory nature enables you to manipulate data much faster than traditional database systems.

SAP HANA’s speed makes it a useful tool for big data processing, business intelligence, and next-generation applications. You can also use it to perform numerous advanced analytics tasks, including predictive analysis, spatial data processing, stream analysis, and Extract, Transform, Load (ETL) functions.

Benefits of SAP HANA include:

  • Up to 100x faster than traditional relational databases
  • Up to 80% reduction in storage requirements
  • Parallel processing capabilities
  • Real-time analysis and data processing
  • Supports a range of data formats and types

Drawbacks of SAP HANA include:

  • Requires SAP or SUSE Linux certified hardware
  • Requires significant cost investment
  • Complicated update process

Options for Running SAP HANA in the Cloud

You can choose from several options if you wish to use SAP HANA in the cloud. All major cloud providers offer SAP-certified hardware or you can use a dedicated service managed by SAP.

SAP HANA Enterprise Cloud

A managed service built by SAP on the Cloud Foundry platform. It provides SAP HANA services hosted on a private cloud. You can also use this option as an infrastructure as a service (IaaS) on all major cloud providers.

SAP HANA on Azure

Azure enables you to host SAP HANA on bare-metal servers or on optimized virtual machines (VMs). You can also use SAP HANA with natively integrated services. For licensing, you can bring your own or license jointly through Azure.


AWS enables you to host SAP HANA on a combination of Elastic Block Store (EBS), Elastic Cloud Compute (EC2), and Virtual Private Cloud (VPC) resources. You can use memory-optimized instances to ensure sufficient performance. For licensing, you must bring your own.

SAP HANA on Google Cloud Platform (GCP)

GCP enables you to hot SAP HANA on SAP-certified VMs. You can optimize your hosting with single or multi-host architectures and dynamic storage tiering. For licensing, you must bring your own.

SAP HANA Cloud vs On-Premises: Key Considerations


On-premises implementation typically takes longer and requires more effort from you and your team. The entirety of implementation is your responsibility.

In the cloud, implementations typically finish faster since SAP HANA is hosted on a ready-made platform. Additionally, in the cloud, you benefit from provider support and implementation expertise.

Services and Integrations

On-premises implementations grant access to all of SAP’s ERP services, including SAP S/4HANA Finance. On-premises also enables you to use Production Planning and Detailed Scheduling (PP/DS). Previously, this tool was only available through SAP’s ERP Business Suite for SAP Advanced Planning and Optimization (APO).

In the cloud, SAP HANA is customized with cloud-specific industry best-practice scenarios. You also have the choice of selecting between full ERP services, marketing professional services, or business editions.

However you deploy SAP HANA, you can integrate your implementation with a variety of other SAP services. These include:

  • SAP SuccessFactors
  • SAP Hybris
  • SAP Fieldglass
  • SAP Jam
  • SAP Ariba

Upgrade and Support 

On-premise deployments provide you full control over your upgrades. This enables you to upgrade when it is most convenient for you. You can choose how frequently systems are upgraded as well as when upgrades are scheduled. The downside of this is that you are responsible for all update procedures and any necessary reconfigurations.

In cloud deployments, upgrades are often automatically implemented. This saves you from having to manage the work of upgrading but can create unwanted downtime or cause breaking changes. Although you typically have some agency over when exactly updates happen, you can’t avoid upgrades entirely. On the positive side, you do often get full upgrade support from your provider.


Although SAP HANA in the cloud or on-premises is essentially the same product, there are some differences to be aware of. On-premise applications are charged a single licensing fee, while cloud operations require a monthly subscription. Setting up SAP HANA on-premises typically takes longer than cloud implementations with ready-made solutions.

On-premises implementations come equipped with all SAP ERP services, but you will need to manually configure all upgrades. In the cloud, you can use only the SAP services you sign up for, rather than all SAP services. You also get automatic updates in the cloud. There is no right way to deploy SAP HANA. Let project requirements and personnel skillsets be your guide when choosing an environment for your workloads.


Author Bio

Gilad David Maayan is a technology writer who has worked with over 150 technology companies including SAP, Samsung NEXT, NetApp and Imperva, producing technical and thought leadership content that elucidates technical solutions for developers and IT leadership.