SAP BW/4HANA

SAP was founded in 1972 as a business applications company but really came into prominence in the 1990s with the ERP boom. Its ERP solution (R/3) was first released in 1992. The vendor employs more than 110,000 people worldwide and had revenues of $36.80 billion in 2025. Today, SAP is one of the largest business software vendors in the world.

SAP’s original strategy was to view BI as an extension of its all-inclusive ERP offerings. In 1998, it launched SAP Business Warehouse (BW), a completely packaged, plug-and-play BI solution designed to complement SAP ERP applications. BW is a package consisting of connectors, relational data storage, subject-oriented multidimensional structured data marts and predefined content, as well as tools for reporting, analysis, and planning. The goal was to provide a plug-and-play BI solution that would make it fast and easy for SAP customers to benefit from BI.

There are different versions of BW available. Traditional BW runs on third-party databases such as Microsoft SQL Server and Oracle for data storage. The “powered by SAP HANA” version uses SAP’s own HANA platform. SAP BW/4HANA will only run on SAP HANA. It uses different modeling objects with modeling taking place in HANA Studio (SAP HANA’s development environment) instead of the SAP GUI (the BW development environment) and leverages additional tools based on HANA technology (e.g., for data integration).

With BW/4HANA, SAP released its next-generation data warehousing offering in 2016. The overall concept and goal of this package remains similar to the approach with BW: to provide software support for customers to integrate SAP operational data sources with other data sources and create a data warehouse which exposes its data to different front ends. In contrast to BW, the new BW/4HANA solution does not include frontend tools anymore. The following document refers to SAP BW/4HANA.

SAP BW/4HANA is a completely revamped version of SAP BW that runs on the SAP HANA in-memory database. It improves performance and scalability, simplifies development and operation, and supports a variety of in-database analytic functions. It is mainly designed to support multiple analytic use cases, ranging from standard reporting and dashboarding to dimensional analysis. Basic support for real-time and advanced analytics is also included. Although it is not without challenges, the platform supports an array of functionality:

• Data integration to combine data from varied sources and data types.
• Real-time access to—or replication of—sources based on HANA’s in-memory architecture.
• Algorithm push-down of operations/calculations to HANA supporting query calculations, planning functions, and transformation logic.
• HANA foundation-based spatial and graph support as well as text and predictive analytics.
• Data Tiering Optimization (DTO) for managing hot, warm, and cold data.

In on-premises analytics environments, the HANA database is often considered both natively and within SAP BW/4HANA. Currently, SAP is investing heavily in its cloud data and analytics portfolio, with SAP Datasphere and SAP Analytics Cloud as part of SAP Business Data Cloud. This represents SAP’s strategic data and analytics direction for the future, and the general recommendation for SAP BW customers is to migrate to SAP Datasphere. However, SAP now offers multiple migration paths to accommodate different customer scenarios. These include SAP BW Bridge (available since 2022) for hybrid cloud deployments, the SAP BW Data Product Generator for gradual modernization scenarios that allow customers to shift workloads incrementally, and SAP BW/4HANA Private Cloud Edition for those preferring a managed cloud environment while maintaining BW architecture. The optimal path depends on many factors including the customer’s current situation, the state of the source system, and specific business requirements.