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Cloud Computing: Here to Stay... But Is It Right for Your ERP Implementation?

2/5/2010

2010 is the year IT will have its head in the clouds. Cloud computing is among the top technologies on the radar screens of analysts including IDCThe Gartner Group, and Nucleus Research.

Is the time right to consider Cloud computing for your ERP implementation?

What is Cloud Computing?
Cloud Computing is comprised of utility computing capacity and applications kept on internet-enabled PCs and servers that users access over the Web and use in whatever fashion they wish. Because the infrastructure is owned by the provider, customers do not need to purchase it for one-time or infrequent intensive computing tasks. And because it is device and location independent, users can access the systems regardless of their location or device (e.g. PCs or mobile devices).

Several types of Cloud implementations are available. With public clouds, third-party providers offer services over the public Internet. Private clouds refer to networks that emulate cloud computing on private networks that organizations buy, build, and manage in house. Hybrid clouds consist of multiple internal and/or external providers.

Is Cloud Computing Right for You?
Cloud-aware implementations of ERP systems are particularly beneficial if you need to:

  • View data and use your ERP applications on the go to make accurate decisions without requiring stakeholders to meet around the boardroom table.
  • Share applications more easily with partners.
  • Easily scale applications. Cloud-based implementations can meet changing user demands quickly without requiring businesses to worry about peak loads.
  • Store massive amounts of data using reliable, on-demand data storage that scales with business needs and is priced attractively.
  • Ensure high reliability. Because cloud computing uses multiple redundant sites, it is suitable for business continuity and disaster recovery.
  • Reduce cost of ownership for essential IT services. Many cloud computing applications and services use a “multi-tenant” model that shares resources and costs among a large pool of users, allowing service providers to pass along reduced costs to their customers. Infrastructure, such as real estate and electricity, can be centralized in areas of lower costs. Systems can be utilized more efficiently. And CPU, storage, and network and bandwidth can be allocated and de-allocated on demand.

Who Should Wait?
While cloud computing offers many benefits, it’s not for everyone. Customers who may wish to wait include:

  • Companies that are highly regulated by financial and legal authorities. Cloud computing does not yet offer a high enough security guarantee to make a switch to it viable. To mitigate this disadvantage, organizations may consider putting regulated applications onto a private cloud that they can control internally, while using the public cloud for information that requires a lower level of security, such as CRM data or document storage and archiving.
  • High-end companies with many users running many applications. Because vendors charge by the user, companies with large numbers of users will find that the savings from running applications through the Cloud will not be large enough to justify using such solutions.
  • Companies that demand the highest possible performance because performance can suffer from insufficient bandwidth or high network load.

For all but highly regulated companies and those with large numbers of users, cloud computing offers significant benefits, including the ability to store massive amounts of data at a low cost, bring applications and data out on the road, share data with partners, and easily adapt and scale with new business requirements. Most importantly, it offers another route to lower cost of ownership of essential IT resources. With the maturing of the technology, companies will want to begin seriously exploring the Cloud computing option in 2010.

Posted by James Norwood, Senior Vice President, Product Marketing, Epicor

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