Spot the difference.
True cloud solutions vs. the wannabes (aka fog).
You’re in the market for a new ERP, FMIS, CRM or HCM solution and every vendor is talking to you about their ‘cloud’ solution. And rightly so. Nothing much is on-premise anymore, apart from a few very specific solutions which may never have their applications redeveloped to support cloud.
According to the major ERP vendors around the world, all are keen to grow their Software as a Service (SaaS) revenue streams, whichever solution they’re trying to sell you is positioned as a ‘true cloud solution’. But as an ERP sales manager with over 24 years of experience, I know for a fact that not all vendors are being entirely accurate in their portrayal. I can spot a true cloud solution, but if you aren’t living and breathing ERP, then how do you – as a potential buyer - distinguish the cloud from the fog?
Owning the cloud, from the ground up
Many good ERP systems have come and gone over the years. Some have been acquired, retired or are still being supported – often without significant modernisation or R&D and are therefore well into their sunset years. This then leaves a few good systems still standing, including the likes of Oracle, SAP, Microsoft and NetSuite.
But which of these vendors is doing it right in the cloud space now?
Oracle is, for one. Larry Ellison, Oracle’s Founder and Chairman, got it right when he backed Salesforce and NetSuite with his vastly significant personal investments. Now under the process of being acquired back into the mothership, NetSuite is one of the only true cloud ERP solutions out there that was very specifically designed and developed from the ground up for cloud. NetSuite was developed back in the early 1990s when the internet was just on the cusp of exploding for business utilisation and companies were begging for a solution that would fit them as they scaled and innovated.
Customers were connecting via dial up, sure. But NetSuite was developed to be accessed purely via the internet from the outset so the network traffic had to be minimal. They now have over 30,000 customers worldwide and a deep and broad solution.
Compare that then, to a re-platformed ERP, where they have taken the traditional (read ‘old’) on-premised architecture and outsourced it onto a hosted hardware. It might have a browser front end access, but it just would not be architected for the agility that a true cloud solution offers.
And here is the reason why this matters: With NetSuite, companies can customise the application without impacting the automatic upgrade.
True cloud solutions offer the best of both worlds. On day one, you pay your subscription, and you have a working instance readily available to be configured, so the speed to implement is prevalent compared to the traditional on-premise build. You have out of the box pre-configured, best processes and best practice to leverage. Additionally, you should still be able to have the flexibility to make customisations such as adding custom fields, reports, dashboards and workflows – and even do complete form developments – again without any impact on automatic upgrades.
Oracle also got it right with their ERP Cloud. Originally known as Project Fusion, this solution has been in the market for a few years now, and has been developed from scratch as a cloud solution. It makes SAP, Oracle E-Business, Microsoft and Infor just look too old and transactional.
Oracle ERP Cloud is exciting, fresh and innovative. It takes advantage of Gen Y features around social and collaboration – in an ERP no less! And they’ve done the hard yards to develop this as a true cloud solution.
So, what’s cloud, and what’s just fog?
Fog ERPs are designed to run on-premise. Operating ‘in the cloud’ was an afterthought, so these solutions are typically hosted, managed, or maintained by the vendor. In some cases, this passes to a local value-added reseller (VAR) or another service provider. This model dates back at least 20 years, and has never proved to be sustainable or successful. In essence, you experience many of the same problems and costs as if you were hosting on-premise - with the added complication that access is usually slower than if you had the software installed on your own servers. And, you are dependent on a third party every time you have an issue.
What are the hallmarks of a true cloud solution?
Well, to start with, they are developed as cloud solutions from the ground up. They are specifically coded, from the outset, to perform better as a fully hosted solution. They have the resources and expertise behind them to host, maintain and manage software across hundreds of servers and multiple levels of data redundancy in their own multi-tenant cloud environments. And multi-tenancy matters, despite what fog cloud vendors say.
A true cloud solution means that all customers have the same fast access from the same cloud. They get continuous and instantaneous access to the latest product upgrades and developments.
If the solution is not versionless then it is an ERP with a specific release version that is just in the fog. Unless the vendors provide a true multi-tenant versionless product you will still have the pleasure and pain of dealing with upgrades. Even if they say they will take care of these upgrades for you, or on your behalf, they are still not the automatic practice that a true cloud solution provides.
Ask the question: Are all of the customers on the exact same release, and is the upgrade automatic?
All the fog vendors are then offering, is moving the problem from one location to another, and you as a customer miss out on one of the best reasons why cloud is the leading technology preference - the reduced total cost of ownership.
What questions should you be asking your vendor?
True cloud is about more than working remotely and not having operational systems and networks to support. True cloud ERP solutions are a high-value business asset with a low ownership cost.
If you’d like some help demystifying what’s cloud, and what’s not, you could Google it. But then again, you could call or email me and I can share my years of knowledge and help clear the air for you. And maybe even buy you a coffee.
Lisa Nicks, NetSuite Sales Manager
Phone +64 9 379 0525