Published on: August 08, 2017
in: Cloud Computing
There’s somewhat of a debate going on right now between companies who like traditional on-premises ERP software and those embracing cloud ERP. Where does your company stand in the debate? Do you have an existing on-premises ERP that you like or are you actively searching for cloud-based ERP? The answer may indicate in what direction your company is moving, but the facts may persuade you that cloud ERP can actually save you more money.
Are you ready to take advantage of cloud technologies to drive profitable growth? Watch our recorded webinar, “Evolution of ERP in a Connected World,” or contact Mindover Software online to talk about your options and get a plan in place.
Although a cloud ERP application may seem like a bigger investment than on-premises software, there are many reasons why cloud applications are, in the long run, less expensive than on-premises ERP. Perhaps more importantly, cloud software is both accessible and secure.
Cloud Versus On-Premises: What are the Differences?
Before diving into the cost savings of cloud applications, it’s important to understand the differences between cloud and on-premises software.
- Cloud software is delivered through networked computers via an internet connection. The application or interface on which it runs is device agnostic, meaning that as long as you have an internet connection, you can access your cloud software and data. You can use a desktop computer, laptop, tablet, or smartphone. Others using the software may access it from a different device, as well. There is no need to maintain systems to run the cloud application. The company hosting the software runs updates and maintains that equipment.
- On-premises software means you purchase a software bundle and install it from a CD or other device onto your computers. The computers running the software must be physically networked on site and must be maintained with upgraded software, updates to firewalls and security protection, and other routine maintenance tasks. New users and new equipment must have the software actually installed on their hard drive in order for programs to work. You must use specific equipment to access the software, such as computers with specific processors, software packages, etc. When the software becomes outdated, you must purchase an upgrade or a new package which then must be manually installed.
The model is shifting from a traditional on-premises solution to cloud applications. Cloud applications offer greater accessibility, better security, and more for companies.
Why Cloud Applications Cost Less to Your Company
There are several reasons why cloud applications cost your company less money. These reasons spring from the fundamental differences between cloud and on-premises software.
Cost savings from cloud applications occur in the following areas:
- Overhead: Using on-premises software means that your company is responsible for installing, maintaining, and securing your data center. With cloud applications, the cloud hosting company is responsible for these tasks.
- Time: Your IT staff will spend countless hours fixing, repairing, and updating on premises software. Cloud applications are repaired and updated by the software providers, so your IT staff can use their time on other projects instead of acting as technology repair people.
- Updates: On-premises software means that with every update, you’ll need to spend more money to purchase the updates or upgrades. Cloud applications typically include the cost of updates in the price of the software and make changes without any additional costs to you.
- Initial costs: On-premises software often comes with a large invoice at the start of the project. Cloud software spreads the costs out on a monthly basis, which frees up capital to be used for other projects.
- Scalable: On-premises software can be difficult to scale. Season employees, project-based employees, and other temporary workers may require you to buy additional software and hardware. Cloud applications are easily scaled up or down and do not require the purchase of expensive hardware.
- Integration: Cloud software integrates easily with other software packages. Many cloud applications are built to integrate with compatible software. On-premises software may need custom programs built to integrate it with other packages, and the integration may not be as seamless as you would like it to be.
Comparing on-premises and cloud-based software, it quickly becomes apparent that cloud applications save you money over time. That money can be invested back into your company to fuel growth, innovation, and improvements. Migrating to the cloud is worth every penny!
Mindover Software provides business software and solutions to companies big and small. Cloud applications from Acumatica and Sage provide companies of all sizes with powerful data management and business insights. We welcome your inquiry and can assist you with your ERP, BI, and warehouse management software needs. Contact us