Understanding the Relationship Between SAP Systems and Cloud Infrastructure

The emergence of hyperscalers and SAP’s own cloud offerings have introduced new ways of operating and optimizing business processes.

This has implications for how organizations structure IT environments, manage costs, and address compliance requirements, making it essential for consultants to stay ahead of evolving methodologies and technological frameworks.

This article from IgniteSAP explores the technical and financial relationship between SAP systems and cloud infrastructure.?

SAP’s Cloud Strategy and the Role of Hyperscalers

SAP’s cloud computing has progressed significantly in response to changing enterprise demands. Initially, companies running SAP relied on physical data centers, requiring dedicated hardware investments and in-house maintenance. This provided direct control over security and customization but introduced challenges in scalability, cost efficiency, and system upgrades. The introduction of cloud-based solutions has altered this landscape, so organizations have access to more adaptable infrastructure while reducing the burden of hardware management.

Cloud hyperscalers are facilitating SAP’s move away from on-premise models.

AWS pioneered SAP-certified cloud infrastructure, providing high-performance computing instances optimized for SAP HANA. Microsoft Azure has positioned itself as an enterprise-focused cloud provider, integrating closely with SAP applications and business intelligence tools. Google Cloud now provides AI-powered analytics for SAP workloads, allowing businesses to harness machine learning alongside transactional data. These hyperscalers provide hosting environments but also contribute security, automation, and performance-enhancing technologies specifically for SAP systems.

RISE with SAP represents a departure from traditional licensing, combining infrastructure, software, and managed services under a subscription model. This differs from previous offerings by embedding business process transformation within cloud migration, rather than treating it solely as a technical shift.

While RISE with SAP simplifies cloud adoption for customers by consolidating various components into a single contract, it also reshapes the role of service providers, as some functions previously handled by consulting firms are now included within SAP’s managed services.

Migration Considerations

When moving SAP systems to the cloud organizations must determine the best approach based on existing infrastructure, business needs, and long-term scalability.

The greenfield method is well-suited to enterprises looking for operational modernization but requires significant process redesign and organizational adaptation.

The brownfield approach avoids the disruption of a full reimplementation, but requires technical adjustments to meet cloud-optimized performance standards and may involve adapting legacy workflows to newer cloud functionalities.

A hybrid or bluefield method, allows selective migration, enabling businesses to maintain certain legacy elements while introducing cloud-native features where beneficial. This strategy is often chosen when companies want to optimize specific operational areas.

A well-planned migration must account for connectivity between cloud-based SAP instances and external applications, as many organizations operate within hybrid IT environments. Cloud networking configurations, data replication mechanisms, and latency become key considerations in maintaining system performance post-migration.

Technical and Operational Challenges

Deploying SAP in a cloud environment presents challenges beyond infrastructure provisioning.

One of the primary concerns is system performance, as cloud-hosted SAP HANA databases require optimized memory allocation and computing resources. Cloud environments offer dynamic resource scaling, making careful workload distribution essential to prevent cost overruns or performance bottlenecks.

Integration complexity also arises when SAP is connected with third-party applications or on-premise data sources. Cloud-hosted SAP systems must interact with enterprise resource planning modules, customer relationship management platforms, supply chain systems, and business intelligence tools, usually requiring API-driven connectivity. SAP Integration Suite enables many of these scenarios, allowing easier communication between SAP and non-SAP applications within a distributed cloud ecosystem.

Security considerations differ significantly between cloud and on-premise SAP deployments. Organizations must configure identity and access management policies that align with cloud security frameworks while ensuring compliance with industry regulations. Cloud-native security tools provided by hyperscalers offer additional layers of protection, including encryption management, threat detection, and automated compliance monitoring. These tools must be configured to work alongside SAP’s internal security architecture, requiring careful planning to avoid potential vulnerabilities.

Cost Management and Licensing

Financial factors are an important aspect of determining how organizations structure SAP cloud deployments, as many cloud pricing models introduce variable expenses based on resource consumption. This requires businesses to actively monitor and adjust cloud usage to prevent unnecessary expenditure.

One of the key decisions in SAP cost management is whether to adopt a RISE with SAP subscription model or use a “Bring Your Own License” (BYOL) approach. RISE with SAP consolidates infrastructure and software costs into a predictable pricing structure, reducing procurement complexity. However, this may not provide the same level of control over infrastructure choices as a direct deployment on a hyperscaler, where businesses can optimize cloud resources independently.

As well as licensing, other costs include data storage, network traffic, and computing resource allocation. Data transfer between cloud regions or back to on-premise environments can incur fees that organizations must include in financial planning. Selecting appropriate storage tiers, such as high-performance storage for active SAP HANA databases versus lower-cost options for archival data, affects both cost and performance.

To manage expenses, businesses employ cloud cost governance strategies, utilizing monitoring tools from hyperscalers to track SAP workloads in real time. This allows organizations to identify unused resources, adjust capacity based on demand, and automate workload scheduling to align with business activity.

Security and Compliance

Moving SAP systems to the cloud introduces security challenges. One major shift is the adoption of role-based access controls that extend beyond SAP’s internal user management, integrating with hyperscaler identity frameworks to maintain unified access governance. Multi-factor authentication and encryption mechanisms can also safeguard cloud-hosted SAP environments, to minimize the risk of unauthorized access or data exposure.

Compliance with industry regulations is another necessity, as SAP systems handle sensitive business data that must adhere to governance requirements. Organizations deploying SAP in the cloud must configure data residency policies that meet regional compliance standards, ensuring that information remains within designated jurisdictions. Cloud providers offer compliance enforcement tools that automate monitoring and reporting, reducing the burden of manual audits.

Real-time threat detection has become increasingly relevant in SAP cloud security. Organizations employ security information and event management (SIEM) systems that analyze access patterns, detect anomalies, and respond to potential breaches before they escalate. Machine learning models within security frameworks help identify irregular system behavior, providing an added layer of protection.

As SAP cloud adoption continues, organizations must adopt security strategies that reflect the distributed nature of cloud computing. Rather than relying on perimeter defenses alone, businesses must integrate security at every layer of their SAP landscape: incorporating encryption, automated access policies, and cloud-native monitoring tools.

Trends in SAP Cloud Adoption

Among the most significant trends affecting cloud deployments is the increasing integration of AI and automation into cloud-based SAP environments. These technologies are being applied to finance, supply chain management, and customer relationship functions, introducing predictive analytics and real-time decision-making capabilities. Organizations are using AI-driven automation to accelerate financial reconciliation, detect anomalies in procurement data, and optimize inventory levels.

Another change is the movement toward industry-specific cloud solutions. Rather than deploying general-purpose ERP systems with extensive customization, companies are adopting pre-configured SAP applications designed for their sector. These incorporate regulatory requirements, sector-specific analytics, and best practices directly into cloud-hosted SAP environments, reducing implementation complexity and ensuring compliance with industry standards.

Edge computing is also playing a growing role in SAP cloud strategies. Manufacturers with IoT-connected production lines, for example, are deploying SAP workloads at the network edge to conduct localized data processing before synchronizing information with cloud-based ERP systems. This reduces latency and optimizes bandwidth consumption while allowing businesses to maintain control over enterprise data.

Sustainability considerations are influencing cloud adoption as well. Enterprises are incorporating environmental, social, and governance (ESG) goals into IT strategies, to reduce energy consumption associated with data processing and storage. Cloud providers are responding by offering renewable-energy-powered data centers and tools for tracking the environmental impact of IT workloads. This is prompting organizations to reevaluate workload placement, choosing data centers based not only on cost and performance but also on carbon footprint and regulatory compliance.

Lessons from SAP Cloud Implementations

Cloud migration is not just a matter of transferring existing systems to a new hosting environment, but requires a reexamination of business processes. Companies that use the transition as an opportunity to modernize workflows see greater operational improvements.

A phased migration approach has proven to be more reliable than attempting a large-scale transition in one step. By moving non-essential systems first, organizations can establish best practices, identify potential risks, and refine security measures before shifting core ERP functions. This also minimizes downtime and reduces the risk of unexpected disruptions.

As enterprises continue to shift SAP workloads to the cloud, consultants play an increasingly strategic role in guiding clients through planning, execution, and long-term system management.?

A foundational best practice is conducting a comprehensive assessment of the client’s IT landscape before making recommendations on cloud strategy. This includes evaluating whether an organization is best suited for a greenfield, brownfield, or selective migration model, as well as determining the appropriate mix of public, private, and hybrid cloud environments.

Advising clients on resource provisioning, pricing models, and workload scheduling helps avoid inefficiencies that can drive up operational expenses. Many businesses benefit from adopting reserved instances for predictable workloads, while dynamic scaling strategies are more suitable for applications with fluctuating demand.

Security and compliance must be addressed early in the cloud migration process. Consultants should assist clients in defining identity and access management policies, configuring encryption mechanisms, and establishing security monitoring protocols. A well-structured governance model ensures that SAP workloads remain protected while meeting regulatory requirements specific to the organization’s industry and geographic operations.

Consultants can introduce process automation solutions that reduce manual intervention in system administration, monitoring, and compliance reporting. Automated security audits, self-healing infrastructure capabilities, and machine learning-driven operational insights, can all improve the efficiency and reliability of SAP environments.

SAP Consulting in a Cloud-First Landscape

Cloud-based SAP solutions are redefining the expectations placed on consultants. Consultants must now expand their expertise to include cloud infrastructure, data security, automation, and cost optimization. This requires continuous professional development, as cloud-based SAP deployments demand skills that extend beyond standard ERP implementation.

SAP Business Technology Platform is becoming an essential component, acting as a central hub for integration, workflow automation, and application development. Consultants who specialize in this platform will be more able to help clients build modular, extensible SAP environments that connect with both SAP and non-SAP applications.

Organizations migrating SAP workloads to the cloud need expert guidance on configuring security controls that align with industry regulations and organizational policies. Consultants with expertise in cloud security frameworks, compliance automation, and threat detection technologies will play a key role in securing SAP deployments.

Cloud certifications are increasingly relevant for SAP consultants seeking to validate their expertise. Certifications such as AWS Certified: SAP on AWS, Microsoft Azure: SAP on Azure, and Google Cloud Professional SAP Architect provide formal recognition of consultants’ ability to design and optimize SAP workloads on hyperscaler platforms.

Beyond technical skills, SAP consultants must develop financial knowledge related to cloud economics. The shift from capital expenditure to operational expenditure requires organizations to rethink how SAP deployments are budgeted and optimized. Consultants who understand cloud pricing models, workload rightsizing, and cost-reduction strategies will be valuable advisors for clients.

For SAP consultants, the ability to guide clients through cloud migration, cost governance, and security implementation is now as important as traditional ERP configuration skills.

Cloud adoption in the SAP ecosystem is now the foundation of modern enterprise IT strategy. The consultants who succeed will be those who develop expertise in cloud-native SAP architectures, AI-driven automation, financial modeling for cloud deployments, and regulatory compliance for distributed IT environments.

As businesses continue to refine their SAP strategies, consultants will remain at the center of transformation efforts, contributing to a new era of enterprise technology.

If you are an SAP professional looking for a new role in the SAP ecosystem our team of dedicated recruitment consultants can match you with your ideal employer and negotiate a competitive compensation package for your extremely valuable skills, so join our exclusive community at IgniteSAP.