Understanding the new SAP Business Suite and Cloud ERP Modular Offerings
Isabel Martin
Principal SAP Solutions Architect | Holistic Nutrition Coach | Health and Wellness Coach
“Sooner or later, everything old is new again.” ― Stephen King, The Colorado Kid
This quote sumarizes well what I first thought when I learned about the updated branding for Cloud ERP from SAP, announced in Sapphire in May 2025. After more than 10 years promoting S/4HANA and lately RISE or GROW as the preferred deployment options, SAP has announced a different model. At its core, the update resembles the pre-S/4HANA ERP product packaging, now consumed as a Service and enhanced with agentic AI.
The main highlights of the announcements are:
The new model aims to promote a focus shift, from the technical upgrade to S/4HANA, to the business transformation enabled by SAP’s full set of cloud services. With Cloud ERP, customers can become more efficient and optimized, beyond reducing the technical debt.
2 origins – 2 journeys – 1 destination
A question to answer is: how can customers implement Business Suite? It depends on where they come from.
Customers can be either new to SAP ERP, or existing users. Per SAP, new customers will follow the GROW journey, whereas existing customers will follow the RISE journey. The destination is common to everyone: Business Suite.
The flywheel effect
The biggest value of the Business Suite lives in the interaction of the applications with the data they generate and use, and how this data is consumed by AI and later injected back into the applications. It’s a self-reinforced cycle: the more the applications are used, the more quality and quantity data is generated, which is fed into AI for more relevant business insights and outcomes, which can be fed back into Apps… and so on. SAP is calling this the “Flywheel Effect”. The flywheel can drive positive changes in organizations: better efficiency, optimization and innovation.
In the updated model, AI is no longer an add-on to the Cloud ERP environment. It is an essential piece, fully integrated in the solution and key contributor to the flywheel.
Interestingly, also notice that “clean core” is no longer at the center of this well-known representation of the SAP solutions. This aligns with SAP’s goal of focusing on overall service offering and interactions, instead of the technical details.
SAP Cloud ERP (Private)
SAP may not be calling it out, but S/4HANA is still included in the two Cloud ERP offerings:
This S/4HANA-less rebranding makes me wonder if there is any other reason why SAP is avoiding the S/4HANA name. Does it mean that SAP will offer classic ERP (ECC) as a Cloud ERP option? We know that more than 50% of the existing SAP customers have yet to migrate to S/4HANA, and they have barely 2.5 years left before the 2027 deadline. It’s hard to think that SAP is planning to leave this significant number of customers behind. On the other hand, SAP would want to still keep the deadline pressure to encourage customers to adopt S/4HANA, so I would not expect ECC Cloud ERP support to be announced soon (if ever).
Modular cloud portfolio design: Business Suite Packages for Cloud ERP
As part of the rebranding, SAP has introduced five Business Suite packages that cover the core business functions: Finance, Supply Chain Management, Human Capital Management, Procurement and Customer experience.
These packages are delivered SaaS and require a greenfield implementation. Customers can pick and choose what, if any, packages to use, and progressively implement over time.
The modular approach is especially interesting for existing customers in the RISE journey, since they no longer need to tackle a big bang implementation to SaaS, but they can do a staged implementation instead, in their own time, and in the areas they need.
New Persona Based licensing (PUPM)
SAP is updating the AI licensing to a persona based model, PUPM (Per User Per Month). PUPM licensing will be offered in different tiers and add-ons, in a cumulative model where higher tiers automatically include lower tiers. This model is expected to provide more transparency and flexibility for customers.
PUPM will be used for AI only and does not fully replace FUEs.
More flexible AI with custom Joule Agents and Skills
Joule was introduced last year as a smart copilot to help with specific SAP related tasks. This year, SAP is aiming for an “omni present” Joule. To support the initiative, they are enabling Base Joule use cases, like search and navigation, for free. Customers that would like to get advanced insights and analysis can get Premium Joule access for an additional fee.
Joule has become agentic too. It can interact with multiple SAP and non-SAP products to orchestrate and optimize simple or complex workflows, through so-called skills and agents. SAP provides a variety of pre-configured Joule agents. In addition, customers can choose to develop and deploy their own custom agents and skills from Joule Studio, to interact with SAP and non-SAP products. This customization option is still in beta testing, but will be generally available soon for skills, and later for agents.
One last clarification: SAP calls “skills” to processes where the start and end are known, typically simpler, repetitive tasks. Agents address situations where the start is known, but the end needs decision making and reasoning. The agents will work through these more complex scenarios and “figure out” the end.
How does this benefit customers?
As I’ve said before, to me technology makes the most sense when it can provide business value to customers. What’s the value of all this revamping?
Here are my personal top 3:
1 - Freedom to choose a Cloud ERP model
2 - Increased flexibility, fostering progressive cloud adoption
3 – Increased efficiency and optimization with customizable agentic AI
Even better with HPE!
At HPE, we think each customer is unique and we drive this through our “Power of Choice” portfolio for SAP customers. Our range of offerings go from classic on-premise purchase, to managed private cloud with HPE GreenLake, to all the way up to SAP Cloud ERP Private in a customer’s datacenter of choice.
Now that SAP is offering more freedom and flexibility to customers with the updated products and vision, we are even more aligned. HPE reinforces SAP’s greater flexibility with our Power of Choice.
HPE AI solutions, like Cloud Vector Engines running on HPE Compute Scale Up Server 3200, or PCAI (Private Cloud AI), can connect with, and complement, SAP AI solutions for even better efficiency and outcomes.
Lastly, for customers implementing hybrid environments, HPE is ready to support SAP Edge Integration Cell running on either SUSE Rancher or RedHat OpenShift, for seamless and secure on-prem to SAP Cloud integration.
The future looks promising for SAP customers that choose HPE as their SAP solutions partner.
Excellent overview Isabel. It looks like a setup we have seen before :-)
Senior Principal Engineer SAP Co-Innovation and SAP Performance Engineering at Hewlett Packard Enterprise - Chairman FIS Speedski Committee - FIS World-Cup Speedski Athlete
1moGenial, Isabel 👌!
Enterprise Architect, SAP Solution Architect - S4HANA, BTP, SuccessFactors, Fieldglass, Ariba, Solution Lead, Techno-Functional SME and Project Manager. Recreational Drone CASA Certified Pilot.
1moI feel this in my soul. You thought you were dodging a lifetime of study by skipping medicine — only to end up in tech, where the learning never bloody stops! Welcome to the club of “accidentally lifelong students.” Honestly, that was your biggest mistake. Should’ve stuck with medicine — at least doctors get cool white coats, respect at BBQs, and don’t have to Google “what changed in SAP overnight” before every meeting. I made the same mistake myself… but at least I had the good sense to steer the next generation right — sent the kids down the medicine path while I stay up until midnight debugging a system that worked fine yesterday. And you’re spot on — with HPE and Juniper, and SAP reinventing itself more often than a Bondi barista’s career path, keeping up is a full-time gig. Your article's a bloody lifesaver though — might even save me a few hours of “study” (aka panicked Googling). Cheers for that — now I can pretend I know what I’m talking about on Monday.
I recover and lead failing SAP Programmes | Programme Director | Phase Zero SAP Advisory | RFP & Licensing |SAP Separation M&A Architect | Finance Domain Business Transformation SME | Data Alchemist | TOGAF Ent Arch CTO
1moEven better to upcycle your ECC with plug and play elements of the Suite and third parties
Solution Architect for Data and AI, Technology Scout - Views are my own
1moExcellently put together, thank you.