SaaS Infographic

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Cloud Basics

I found a great article on Cloud Basics on the MYOB blog. I thought I would expand a bit on it.

Questions people ask include:

  • What is the Cloud?
  • Why is everyone ‘going Cloud’?
  • Why should I ‘go Cloud’?

What is Cloud?

Cloud is a new way that IT systems and software will be setup. Its sometimes called the ‘Utiliy’ model, because like water, electricity, gas and the phone you basically ‘connect and go’. The services are also based on a usage model, the more you use the more you pay, but you can vary usage.

Cloud services can be divided into three main categories. Software as a service (SaaS); infrastructure as a service (IaaS); and platform as a service (PaaS).

SaaS – Software as a service

Hotmail, Gmail are cloud email services. CRM systems include Salesforce.com, SugarCRM and Microsoft Dynamics. ERP systems include NetSuite and Microsoft Dynamics. Cloud based telephony includes Skype, plus a myriad of SMS services. In essence, much innovation in software is taking place in the cloud.

IaaS – Infrastructure as a Service

IaaS is essentially offsite hosting. Businesses and services that require lots of computer power can now utilise large external computer farms and hosting services rather than build their own. This means that you likely don’t need to invest in large CAPEX  projects and maintain onsite infrastructure. IaaS allows businesses and services to keep their costs down. Its typically how startups begin working on projects nowadays. The traditional hosting providers have moved into this market, whereby more than 50% of new server hardware is sold to  hosting firms rather than directly to businesses. The bigger vendors include Amazon, Rackspace, NextDC, Equinix, GlobalSwitch.

PaaS – platform as a Service

A PaaS solution often provides the foundations of Cloud solutions. A PaaS is often used for application hosting, development, deployment and testing. Essentially a PaaS solution allows developers to rent services and servers to make their SaaS a reality. PaaS platforms include Amazon AWS suite,  Heroku, Microsoft Azure, cloud foundry, OpenShift

Why is everyone ‘going Cloud’?

Some good reasons for going cloud can be found in our Compare Cloud and On-site CRM guidebook. In essence the benefits come down to:

  • Accessibility – access any system that can be accessed via the Internet – PC or phone
  • Easy – web access means that the platform is less of an issue, and there is less hard coding.
  • Reduced Infrastructure costs – most server environments run at less that 35% capacity – you buy system capacity for the one a month peaks. Cloud allows you to rent the capacity – so saving money.
  • Maintenance – cloud systems are designed for on the fly updates and upgrades.
  • Innovation & Flexibility – it is changing the way that IT departments look at developing new systems, taking the reduced effort in running systems and applying them to building new systems – quickly.

Why should my business go Cloud?

The benefits of businesses going Cloud, it has similar benefits for users.

  •  Anywhere access on any number of devices means that you can be as connected as you want to be.
  • Use an application from anywhere. Having your information in the Cloud lets you access and use it wherever you can connect to the Internet.
  • Disaster recovery and data back-up. Typically there will be 2 or 3 copies of data, in different locations
  • Maintenance, updates and upgrades become a thing of the past.

 

 

 

How to choose your Cloud Provider

Your are evaluating cloud solutions,  which vendor do you go with? If you were building your own application you would look at Amazon, Rackspace, ninefold and a myriad of others. If your choosing a CRM or ERP then your choice is (often) limited to whomever the vendor has teamed with. Whatever the situation, here are the key areas you need to evaluate providers against.

  1. Reputation
  2. Security
  3. Flexibility
  4. Pricing
  5. Recovery
  6. Failover
  7. Environment
  8. Test

Reputation – get a customer list and call some of them up. Focus your efforts on companies your size.

Security – there’s a lot of security standards, make sure that you are comfortable with the suppliers processes and procedures.

Flexibility – look for providers that allow you to add your specific needs, plus the ability to add and take down servers ‘on the fly’.

Pricing – work out costs before you implement and ensure that there is a standardised price list.

Recovery – make sure the data recovery plan is good( minimum of a second location). Also, if the provider goes out of business or their service drops, that you have the ability to switch providers.

Failover – Cloud Platforms have built-in failover. How does the provider plans for failures on premise as well as off premise and make sure this matches to your needs.

Environment – if this is important to your business, ensure that the provider gets audited by a relevent body.

Test – test the provider on a small service before moving all your business systems across.

 

 

How mature is Cloud computing?

When cloud applications first came to market, it was mainly through small scrappy software companies. Over time, the natural advantage of cloud applications has meant that established vendors have had to respond. Today, in virtually any software application category you will have a good cloud option, that makes “Why not the cloud?” a valid question.

On our CRM-Guidebooks site, we ask the intentions of CRM purchasers on cloud versus onsite. Across the survey group of over 800, 27% intended to deploy a cloud solution compared to 16% on-site and the largest group undecided at 57%.

When we look at the data by company size it skews a little more towards cloud.  36% of SMB’s are intending to deploy a cloud solution, with only 14% preparing for an on-site system. This 9% difference indicates that SMB’s are already asking “Why not the cloud?”

This was a CRM survey, a relatively simple application – it does not need to ‘touch’ many other systems. It can be a standalone sales or support system, when it does need integration it may be simply to a website or marketing system.

More complex systems like ERP/Accounting will need to ‘touch’ many more systems and have a larger integration need. Our sister site ERP-Guidebooks asks the same question, in this case only 18% looked to deploy ERP in the cloud, and 37.5% would deploy on-site.

ERP and CRM are only two categories of an ever expanding range of cloud solutions. Below is a Forrester chart on various cloud initiaitves thoughout APEJ. Download our Cloud Guidebook for more information.

Forrester Survey

ERP Vendors – microsoft

This week in Atlanta, Microsoft are running their Convergence user conference.

The key announcement was that

the company revealed a path for its ERP customers to move to the cloud with the next major releases of Microsoft Dynamics ERP solutions, which will run on the Windows Azure platform.

This means that the next version of Dynamics SL, GP, NAV and AX will be both available as Cloud and On-premise applications.

In addition Microsoft introduced Dynamics AX 2012. This is the high end Microsoft solution that competes with the likes of SAP and Oracle.

The beta of Microsoft Dynamics AX 2012 will be released in April 2011. The final release is expected to be generally available in August 2011.

More information on this release is here.

In addition Microsoft announced that:

  1. Microsoft Dynamics SL 2011 is now generally available
  2. The On-premise version of Microsoft Dynamics CRM 2011 is now available ( you can have it on the cloud or in your own offices)
  3. Dynamics NAV 2009 R2 with improved integration with Dynamics CRM is available
  4. Dynamics GP 2010 R2 will be generally available on May 1, 2011


Cloud ERP Vendors

The Cloud/SaaS CRM market is quite a bit more mature than the Cloud/SaaS ERP vendors. Definitions in this arena are constantly getting re-hashed by vendors and a bit of qualification may help here.

Most of many of the vendors can help you move your ERP application into the Cloud – basically picking up your current hardware and software solution – and putting it into a vendor data centre.

For the purists, this is not good enough as this type of solution lacks a few things:

  1. Shared hardware – often called multi-tenant
  2. Shared resource – or virtualisation

Why are these important?

They are important for a couple of reasons, firstly shared hardware means that you pay less for the hardware than if its 100% dedicated to your ERP system needs. The second reason is that sharing hardware means that you have better flexibility – to increase the resources you need or to reduce them.

Typically, a server in your own data centre may be 15-30% utilised across the business day. You may only use it at 100% capacity once a day or even once a month. By sharing hardware you can share the costs of this expensive and underutilised resource. Similarly, if you start to grow rapidly then adding more computing resource is easier than buying and adding new hardware resources.

The knock-on benefit is that its ‘easier‘ for a vendor to offer you SaaS licence terms – that is a rental model of $x per user per month, rather than the typical licence model.

Are they important to you?

Let the vendors quarrel about the technical aspects of this. The key question is the importance of this to you and your business? If its critical then unfortunetly at this point in time it limits your choice, unlike the CRM market where there are a number of good options.

Use our ERP Checklist as a time-saving way to start comparing vendors.

If ERP you will want to look at Netsuite, Plex Systems and SAP Business ByDesign will meet the needs of the purist. Note that other SAP solutions won’t meet the strict criteria set out above and the ByDesign solution is not yet formally released in this region.

If there any other vendors who can meet this criteria – please let me know.

ERP Options for Cloud/SaaS/On-demand

I came across this good summary slide on the options available. Different vendors have different capability and positions on each – this is often because of the way they built and designed their applications.

Identify your preferences and put them into your ERP ‘must have list’. Our ERP Checklist will help as a template for your needs and to evaluate vendors.

Double Click to enlarge the table.

Technology Questions

There are many questions you may need to consider when buying an ERP. The main ones are:

  • Does it do what I need it to do?
  • Should I buy an on-site solution or a ‘Cloud” solution
  • Do I buy a standalone product or  commit to a suite

Download the FREE ERP Checklist to help you discover the features ERP solutions need, it will also help you rank and compare the vendors.

Below are some ideas to consider:

Cloud

Cloud ERP also known as on-demand or hosted  ERP, provides a simpler, faster, and more affordable way for businesses to take advantage of powerful technology tools that streamline and automate the way  interactions are managed across a business.

With Cloud ERP, all hardware and software components are purchased, installed, tested, and maintained by a third-party hosting provider at a remote site( sometimes overseas). The service provider also stores and manages all customer-related data. Companies need nothing more than a standard Web browser to access and utilise the ERP application and its features.

Cloud ERP can be known by other names:

Software as a Service(SaaS)– is a particular form of Cloud ERP where much of the hardware infrastructure is shared amongst many users rather than be dedicated to one company. These offerings are often sold on a rental basis at a Dollar/User/Month basis – some with time period contracts and some without.

Vendors in this arena include:

  • Microsoft Dynamics ERP from Microsoft resellers
  • NetSuite
  • SAP Business ByDesign

Hosted ERP

Another form of Cloud ERP is called Hosted ERP. In this case you will have a dedicated server at a datacentre that is managed by a 3rd party service provider. This is a common way for larger companies to operate and can apply for solutions such as Microsoft Dynamics, SAP and Siebel.

Note: Companies such as NetSuite only operate on a SaaS rental basis and so the On-site option is not available.

Cloud ERP Vendors: Find the Right ERP Vendor For Your Small, Medium Or Enterprise Business Here.

 

Cloud Computing

Cloud computing – a generic term for all applications that are used through a web browser and don’t hold data on the PC. Cloud ERP is one option and it can include other software categories such as Google Docs for office productivity. It should be noted that Cloud ERP has its limitations, based upon the amount of interactions with other systems. A Simple ERP can live in the Cloud, but if advanced manufacturing integration is required then an on-site solution is the more likely offering/

On-site

On-site ERP, also known as licensed, on-premise, or in-house ERP, is a customer relationship management application that is housed at a client’s location, and managed by its own employees. Internal IT personnel are responsible for installing all hardware and software components, integrating the solution with existing systems, deploying it to end-users, and storing all related data. System administration, upgrades, and other routine maintenance are also performed by IT staff.

This means that the software, servers, network, user management are managed by the IT department. This is the traditional way of implementing a system.

Options here include:

  • Microsoft Dynamics ERP
  • SAP Business One/SAP All In One
  • Sage, Attaché, MYOB

ERP Vendors: Find the Right ERP Vendor For Your Small, Medium Or Enterprise Business Here.

 

Cloud vs. Onsite

Here is a summary of the Pros and Cons of Cloud ERP and On-site ERP.

Cloud ERP Pros

  1. Faster time to value.
  2. Better accessibility from remote locations.
  3. Easy deployment.
  4. Frequent updates.
  5. Cost-effective.
  6. Often the only alternative for SMBs.

Cloud ERP Cons

  1. You need regular high-speed internet connectivity.
  2. Over time, the TCO (Total Cost of Ownership) can shoot up.
  3. Shifting to another vendor may not be easy.
  4. Data security.
  5. Customisation and integration is not always easy.
  6. Limited manufacturing and supply chain capability

On-site ERP PRos

  1. More flexibility
  2. Easier Integration
  3. Greater control of the system
  4. Tighter security
  5. Total cost of ownership of the solution
  6. Unlimited customisation potential

On-site ERP Cons

  1. Higher upfront costs
  2. Slower return on investment (ROI)
  3. Increased maintenance

 

Suite

An ERP suite will include a broad range of functionality for an entire busines all in a single package. A suite is unlikely to have a particular focus and will broad capabilities.

As suite’s become broader they also become more capable, particularly in the area of industry functionality. You will see that vendors may have created specialised capability for your industry. In addition, many of the larger suites are too large for an SMB, so a cut down and simplified version will have been developed.

The larger software vendors may also have other suites such as CRM. CRM suites can be integrated with these ERP suites.

Suite Vendors include:

  • SAP/SAP Business One
  • Siebel/Oracle
  • Netsuite
  • Microsoft Dynamics ERP

ERP Vendors: Find the Right ERP Vendor For Your Small, Medium Or Enterprise Business Here.

Standalone

Some ERP packages are specialised. They can be specialised in industries such as Mining, retail or asset management functionality. They may well call themselves “best of breed” compared to the generalised capability of a suite.

Clarify the reasons you need ERP to ensure you find a successful solution here by Downloading the free ERP Checklist that will help you safe time in defining your requirements.