In the past few years the cloud based ERPs are getting steadily gaining market traction and leading ERP vendors (read SAP, Oracle, Microsoft, Infor etc) are already pushing cloud first strategy.
Based on our experience in implementing both On Premise and Cloud based applications below are the 5 reason that are driving cloud adoption by the enterprises,
Front Loading of Expenses
For any Software that’s installed on premise, there is huge capital expenditure required up-front for the following
- Procure High Performance H/Ws that’s required to install the ERP Application.
- Perpetual License Fees for the Software – Operating Systems, Middle Ware, Database and ERP Software licenses.
- Installation of Software – One time installation cost.
By choosing cloud based SaaS, customers can effectively spread these expenses over next 5 years or even longer, without compromising on performance of the application. Moreover, it will be the SaaS vendor’s responsibility to keep the hardware configurations upgraded.
Messy Maintenance
Almost all of the Major ERP applications today are using more than one technology, mainly because they have acquired other solutions to bridge the gap in their core product, this makes it difficult for the customer to have in-house expert who can manage multiple technologies.
Availability
While setting up a Data centre is one time cost, keeping it run 24×7 needs huge resources, Irrespective of usage load, the the same computing power has to be maintained 24×7 making it fixed recurring cost. With most of the SaaS is coming with ~99.9% availability – customers can have peace of mind and relax.
Incremental Upgrades
Gone are the days when one has to wait years to get new version upgrades, Modern ERPs are taking Agile route for product development, and releasing monthly updates to their products. In SaaS Model, it’s vendor’s responsibility to install the updates and keep it latest. On Prem solutions needs huge effort by the system admins to handle this and also it involves user testing to confirm that the upgrade is successful.
With SaaS vendors working hard to fix customer’s concerns, I firmly believe that SaaS is already on its run-way and gaining momentum to take off and reach great heights.