On Demand vs On Premise

[Former Member]

Hello,

We are currently running a short pilot on SAP Sourcing On Demand Private Edition, we are using only the sourcing module and not CLM. Going forward, we are trying to decide between On Demand and On Premise. We are currently leaning towards On Demand. Reasons being, On Premise licensing is turning out to be prohibitive and we have been told by SAP On Demand experts, that we are not losing any major functionality since all customization that can be done in an On Premise environment can also be done in On Demand Private Edition.

1) Could anyone please verify your experience between the 2 and the major loss of functionality if we opt for On Demand Private Edition. Are there any features, additional customization (e.g. extensions, reporting, scripting, customization for ECC integration etc) which are available in On Premise and not available for On Demand.

2) What are the key drivers for any organization to opt for On Premise since On Demand seems to be more cost effective, easier to manage and has all the flexibility of On Premise?

Any thoughts/insights would be very welcome.

Thank You,

MP

Edited by: MP1234 on May 4, 2011 6:34 PM

[former_member193332 · Accepted solution]

Hi,

Please find my comments below.

1) Could anyone please verify your experience between the 2 and the major loss of functionality if we opt for On Demand Private Edition. Are there any features, additional customization (e.g. extensions, reporting, scripting, customization for ECC integration etc) which are available in On Premise and not available for On Demand.

--> If you opt for OnDemand Private Edition, there is very little loss of functionality or flexibility. With OD Private Edition, you can build extensions, scripting, customizations to ECC integration.

2) What are the key drivers for any organization to opt for On Premise since On Demand seems to be more cost effective, easier to manage and has all the flexibility of On Premise?

--> Yes, In most of the cases, OD model is more cost effective. If the customer already has all required IT infrastructure and resource, then it might make sense to leverage those existing infrasturcture and resoruce. In some industries and regions, there are regulations and concerns against the OD model (i.e. Security, Scability). However, these issues are mostly perception issues, but not mostly not real issues. OD is still fairly new concept to many customers and they are just more comfortable with the traditional OP model that they are familiar with.

Thanks,

Steven

[Former Member · Accepted solution]

Thank you Steven.

[former_member193332 · Accepted solution]

Just to add on my previous comments, the below are four key reasons why customers are increasing more opting for OnDemand solution.

1. TIME TO VALUE -- OnDemand option brings down implementation times and cusotmer can be up and running quickly.

2. OPEX vs. CAPEX -- Operational expenditure (OPEX) is attractive for LoB buyers as it makes them independent from IT budgets and resources.

3. LOW UPFRONT COST -- No upfront license fee; the 1st year subscription fee is usually much lower than license fee.

4. NO MAINTENANCE, NO UPGRADES -- SAP takes care of the maintenance and upgrades, and customers do not need to allocate any special resource to maintain and support the system

Edited by: Steven Kim on May 6, 2011 6:07 PM

Edited by: Steven Kim on May 6, 2011 6:08 PM

[Former Member · Accepted solution]

Thank You Steven,

If anyone could share reasons why you went with On Premise, that would be great.