The Future of Cloud ERP

The big question is how will companies adopt with Cloud ERP? According to Microsoft it will be a 50/50 mix of people using traditional on-premise ERP and those electing to move to the cloud. There are many things to consider if you are selecting a new system. One of the most important decisions you can make is on the platform you will choose. This lays the groundwork for all decisions moving forward.

Cloud Computing is not new. In fact, Salesforce.com pioneered this technology with multi-tenant architecture back in 2000. So with an eleven year history, they have grown to be a powerhouse in the cloud. However, most ERP vendors tried at first to apply an Application Service Provider (ASP) model in the early 2000’s and did not have much luck. Can they reshape themselves as Cloud Computing providers?

What are the differences from and ASP and a Cloud ERP company? Well first off, ASPs worked under the premise that they were simply hosting the software and data in a data center. There was a complete separation of customers due to the fact they each had their own server or set of servers. True cloud computing is more than just a marketing gimick. It is the pooling of resources to provide fast response and a virtual division of data and sessions. The analogy that Salesforce.com has used in the past is multi-tenant, meaning just like an apartment building, you lease an apartment (or a set of resources) that are separate from other renters, but using the same infrastructure.

Unfortunately, many ERP providers are going back to the ASP model and calling it cloud computing. Yes, it is easier for them to get up and running, but in the long run, it is more costly. Each client is now on their own infrastructure and updates have to be managed separately. In a true multi-tenant environment, you can upgrade everyone at the same time.

The client companies who are looking at new ERP solutions need to consider these things and more. We have listed below some of the key benefits and concerns a buyer needs to be aware of when looking at Cloud ERP.

Cloud ERP Benefits

No more heavy IT expenditures – no servers to buy
Less Staff to maintain the On-Premise systems
Reduced Costs in workstation expenditures – A net computer would work fine
Easily Expandable – just buy more licenses
Reduced costs of communications for large multi-site companies – possible elimination of site-to-site bandwidth
Costs hit the Profit and Loss statement, not the Balance Sheet – before you had to capitalize the large expenditure of an ERP, now you can expense the license costs.

Disadvantages of Cloud ERP

Financial Data part of the Cloud ERP system – Can you trust your provider?
Integration to other systems may be more difficult
Higher costs of Internet bandwidth
Indirect access to your data – will likely have to use an API rather than direct data access
Full backups will be dependent upon pulling data down from the cloud, thus possibly resulting in less frequent backups

Cloud ERP and the next few years

The future of Cloud ERP is going to be an exciting one. People will be transitioning technologies and as a result, many legacy systems will likely be retired. Software that is running on old platforms will begin to disappear. Only those providers with the most up to date technologies will be able to survive, because Cloud updates happen so fast and so regular. Imagine having pushed updates every quarter that just appear. No more waiting for disks and announcing downtime to your users while you test, load, and then patch updates. The next five years should be very exciting as more and more providers and customers transition to Cloud ERP.

Sage ERP X3 Celebrates Success and Focuses on Future Growth

Sage ERP X3 Celebrates Success and Focuses on Future Growth
PARIS, February 4, 2011 /PRNewswire/ Several hundred of people ranging from pre-sales, sales and marketing from 17 different countries gathered in Paris, for the Sage ERP X3 Global Sales meeting. The three day event took place from January …

The Future of ERP

The Future of ERP
November 15, 2006
By James Maguire

The dream of enterprise resource planning systems is that a single application can track and monitor all of a businessâ€™s functions. In a perfect world, a manager opens a single ERP app to find data about any aspect of the business, from financials to HR to distribution schedules.

Alas, weâ€™re not there yet â€“ or at least most companies arenâ€™t.

Looking at the ERP landscape, â€œthere still tends to be a lot of disparate components, that are either homegrown or older packages,â€ says Forrester analyst Paul Hamerman.

Moreover, there are still a lot of gaps in ERP systems, particularly in industries where ERP functionality has grown up from its historic origins in manufacturing. There are even gaps in core ERP areas, Hamerman tells Datamation, â€œwhere they just havenâ€™t done a particularly good job, in areas like budgeting, and recruitmentâ€¦where the vast majority of customer use something other than their ERP vendor.â€

But despite the challenges, the movement toward a global ERP system is a key factor shaping the future of enterprise resource planning.

â€œItâ€™s a trend that’s going on, and most companies are going in this direction: Read more about The Future of ERP

Your Web Based Future

Chris Shaul

With Google and Sun collaborating to bring a web based version of Open Office to consumers, Microsoft has now jumped into the web applications game, but with bigger plans than just an office suite. How about a web based ERP system from Microsoft?

Okay, now that is nothing new. There are plenty of html based ERP systems. Some such as Oracle, are purely a virtual application, being written in Java and launched from a browser. But with Microsoft planning this, the entire desktop and user applications may change. We may have only virtual applications in the future with you only licensing what you use and need. This includes running your company on a virtual, remotely hosted system. This, as mentioned, is not new. But the difference is that you would only need a computer with light processing power and an internet connection to literally run your financials and operations.

With a powerhouse like Microsoft pushing web applications, the future of computing will dramatically change. No more will you go down to the computer store and buy boxed software. You will log into your browser, find the application you want on the Internet, and then subscribe to do your wordprocessing, spreadsheets, companies financials, enter the latest customer orders, etc.

The independence you now have of choosing what is on your computer will diminish as a few market leading applications vendors host your software. The web and software in general are becoming more and more of a utility. Just as the electicity you buy, the cable tv you watch, and the gas that heats your food are all utilities, the web and all of its applications will soon be similar. The question is, who will control this utility? The DSL providers, the Software providers, the web hosting companies? We will probably see a shift in the landscape of Internet companies. Microsoft or some similar entity will begin buying the access control points to the internet. Time Warner is an example of an early adopter. Trying to own the content and the access. But when folks are using the ERP systems and the office suites of the web, then the megacorps will want to charge for the access to and the use of the content.

For now, the one thing that is working against these plans are the fact that most companies do not want someone else having control over their data. But as the costs are reduced to a utility point of view, it will only make sense to outsource. This unfortunately will put a lot of data into the hands of the “utility” companies. Think of the marketing info they could gain and what if your company’s data is not so secure? It is a brave new world that we are embarking upon. And to have an ERP system that is hosted, maintained, and monitored by an outside entity that is not in the business of hosting, but rather in the business of providing content and access is a rather scary nightmare. But for now it is okay. We have years before this becomes a reality…maybe.

Chris Shaul is a Sr. IT Consultant specializes about ERP selections and implementations.