Hosting Versus the Cloud
We're Harping on this for a Reason
I know we keep harping on what true SaaS is and what “cloud-based” means, and that perhaps it sounds like we’re getting caught up in semantics, but there is a reason for our fixation - why we're shouting from the rooftops. There are huge advantages in cloud-based SaaS ERP solutions. Some advantages, like configurability and real-time reporting and dashboard analytics, are obvious to customers and end-users. Other advantages, like multi-tenancy, allow for cost savings on the part of vendors in the implementation, updates, and maintenance of the software that customers then see in their lower total cost of ownership.
Now many (AcctTwo included) have pointed to the marketing deception of “cloud washing”, where legacy vendors of traditional on-premise ERP systems are trying to take advantage of the cloud trend by re-branding versions of their software as cloud-based or SaaS. In many cases they are emphasizing the subscription pricing model or the fact that the software can be accessed through a web-client. These legacy systems may require customers to select an IaaS provider to host the application, or the customer may have to host it themselves. We’d like to focus here on some differences between hosted solutions and cloud solutions.
One major difference is with network access. Cloud-based applications allow user access usually through API’s and web-portals, accessing virtual machines from any device, whether it be a laptop, tablet or smartphone. Legacy solutions often provide a web-client that may require additional software. Microsoft's requirement of the Silverlight application for their web access to the Dynamics suite is an example of this.
Cloud computing allows for resource pooling. This is something that some hosted implementations can provide, but others cannot, especially when the application is hosted in-house by small to midsized companies without the sophisticated IT resources required for this.
Real-time scaling or elasticity is another characteristic of cloud-computing that allows users to use only what they need without the worry that sudden spikes in usage would cause outages or max out the system’s capabilities. Hosted solutions can require additional hardware to accommodate such spikes. The advantage of many users and customers sharing one implementation provides for a great deal more flexibility in resource management, whereas an on-premise or even a hosted solution can be limited by the fact that there are fewer physical servers serving up the application.
Take Advantage of the Trend, Not the Other Way Around
The trend toward cloud computing and SaaS is an exciting one, and it’s clear that many businesses want to take advantage of it. They should, however, beware that some software providers, particularly in the ERP and financials software world, are eager to take advantage of the trend as well. Hosted implementations of software with multiple instances, even if accessed through a web-client, do not provide the true advantages of cost and performance that cloud-based SaaS can offer.
AcctTwo is headquartered in Houston, Texas. For more information, please visit http://www.accttwo.com or call 713-744-8400. Connect with AcctTwo on LinkedIn, Twitter,Facebook, Google+, or Youtube.
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