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Product and Topic Expert
Product and Topic Expert
The cost of implementation and operations differ significantly when comparing SAP Cloud ALM and SAP Solution Manager. You should consider this while choosing your Application Lifecycle Management (ALM) solution for SAP S/4HANA Cloud. In this blog post, I want to share some insights on the different costs of using the ALM solutions. This is part of my blog series discussing which ALM offering of SAP fits better for your SAP S/4HANA Cloud solution.

There are multiple categories to be considered here: Usage rights, technical installation, configuring the ALM solution, integrating it with managed systems or cloud services, operating the ALM platform, and doing maintenance. Let us look at the individual categories first before summing them up at the end.

Usage rights

First, you need to have an entitlement for using the ALM solution. The good news is: ALM usage rights are already included in SAP maintenance and subscription agreements. Your subscription of SAP S/4HANA Cloud includes ‘SAP Enterprise Support, cloud editions’. And this contains usage rights for SAP Cloud ALM. There is no need to pay extra for them.

The usage rights for SAP Solution Manager are included in on-premise SAP maintenance agreements. If you have such an agreement, you are entitled to use SAP Solution Manager for all SAP software, including SAP S/4HANA Cloud. Only if you want to use SAP Solution Manager but you do not have a valid on-premise maintenance agreement, you need to acquire usage rights. This can be done by subscribing to the SAP Solution Manager for SAP S/4HANA Cloud offering of SAP Enterprise Cloud Services.

Technical installation

SAP Cloud ALM is a Software as a Service (SaaS) offering of SAP. SAP provides the required hardware, infrastructure, and technical installation. This includes sufficient resources for standard use. And SAP covers the fee for the hyperscaler on that SAP Cloud ALM is deployed. You do not need to pay for this either. Only in the exceptional case of extended usage of SAP Cloud ALM, customers need to subscribe for additional memory.

SAP Solution Manager is an on-premise solution. It needs to be deployed in your own data center or at a hosting partner or hyperscaler of your choice. If you have an existing SAP Solution Manager already, you can use it for your SAP S/4HANA Cloud as well. You do not even need to care about hardware extensions to manage the additional load on the system in most cases. However, if you want to start with a new SAP Solution Manager system, then you must pay for the required hardware. Please refer to sizing information in the SAP Solution Manager master guide for details. And do not forget: The time it takes to receive the ordered hardware might lead to a delay in your project.


Key differentiator of SAP Cloud ALM and SAP Solution Manager is the way how the ALM processes can be configured. SAP Cloud ALM offers standardized ALM processes while SAP Solution Manager enables individual ALM processes. This has an impact on the configuration effort. Regarding SAP Cloud ALM, your tenant typically becomes available in less than 15 minutes after you have requested it. Then you can do the required setup:

  • onboard the users in the identity authorization service

  • assign roles to your users

  • assign the cloud services and on-premise systems to be used in the landscape management setup

  • enable the SAP Cloud ALM API and create a Service Key to connect managed services

And you are ready to go! Some optional configuration is available for some capabilities of SAP Cloud ALM as well.

The basic configuration of SAP Solution Manager includes many more activities. A guided procedure drives you through the configuration steps (see screen shot below). Just doing the mandatory configuration takes a couple of days, typically. And individual configuration is required afterwards for the ALM processes you want to use, to ensure they are executed as you need it.

An add-on for SAP Solution Manager is available free of charge as well. It provides some pre-configuration for the implementation of SAP solutions (Focused Build) and for reporting (Focused Insights). This helps to reduce the effort for setting up the involved ALM processes significantly. However, you will need some additional time for deploying the add-on on SAP Solution Manager.


What is required for integrating your SAP cloud services and on-premise solutions? This is especially important for operations use cases. For SAP Cloud ALM, the integration is done via web services. Setting this up is part of Landscape Management of SAP Cloud ALM. For cloud services, the preferred option is to import the service information. On-premise systems can be registered by running an ABAP program or manually by entering relevant parameters.

The communication between SAP Solution Manager and your SAP systems uses so-called agents that need to be deployed on the managed systems. This is required for all technical systems to be monitored. In addition, you must register the systems in the landscape management database (LMDB) of SAP Solution Manager and to set up the communication between the managed system and your SAP Solution Manager. For cloud services, you must define the parameters for HTTP endpoints and service details.


Like the technical installation discussed above, the technical operations of the two ALM solutions differ as well. For the on-premise system SAP Solution Manager, you as a customer are responsible for doing the system administration, including database and infrastructure management. Either you need employees to do so, or you outsource this to partners. But then you must pay the partner for this service.

SAP Cloud ALM is a cloud solution. SAP as cloud provider operates the solution. You do not need to care about this. It is all included in the usage rights. However, you might want to get at least some information about the system status. This can be obtained by using the Health Monitoring function of SAP Cloud ALM, which provides at least important system information, but not all details.


The patching of the ALM solution and the deployment of SAP Support Packages is another key differentiator between the SaaS service SAP Cloud ALM and the on-premise SAP Solution Manager. SAP Cloud ALM is built cloud native. SAP can deploy code changes daily to the productive tenants. Extensive automated testing ensures that the deployments do not disrupt the functionality. With this, the latest version of the software is always available to customers automatically. And even the delivery of new features can be integrated into this approach by using feature toggles. Customers get access to new or enhanced functionality about every fortnight.

For SAP Solution Manager, patches are delivered via SAP Notes. This means your team checks actively if relevant SAP Notes are available. If so, the team triggers their deployment. Or you wait until the next support package becomes available. Support packages contain collections of SAP Notes plus functional product enhancements. The deployment of a support package is typically a larger project, which causes major efforts. This is because SAP development cannot run automated tests on your on-premise system beforehand.


Summing up all these cost categories, it turns out that SAP Cloud ALM is the low-cost alternative in most cases, compared to SAP Solution Manager. But I recommend that you do not look at the cost only. SAP Cloud ALM does not provide the same functional scope as SAP Solution Manager. Therefore, you should ask yourself:

  • Would it be OK if we use SAP Cloud ALM without the missing functionality?

  • Is it worth spending more money for SAP Solution Manager if SAP Cloud ALM does not provide all the functionality we need?

  • Are there any workarounds available we could use instead?

The answers to these questions will help you find out better which ALM solution fits you. Just add them to your decision table introduced in my previous blog. For this, you might need to take a closer look at the individual ALM capabilities. Therefore, I plan to provide more details on the differences of the functions in SAP Cloud ALM and SAP Solution Manager in upcoming posts of this blog series.

Next Steps

Do not forget to use the option below to add your comments on this blog post. Did you like it? Do you have another opinion? Just let me know.

Stay tuned! More blogs of this series ‘ALM for SAP S/4HANA Cloud’ will be available soon. Go to the next post of this series.

And follow the tags SAP Cloud ALM or SAP Solution Manager for related information. Thank you.