Published on: July 25, 2017
Comparing the cost of cloud applications versus on premises software can be tricky. At first glance, cloud applications seem to cost more than an on premises, site-wide user license. Considering only the price of the license, however, leaves out many other factors that demonstrates how cloud software costs less overall.
Remembering Life Before Cloud Applications
Do you remember what it was like to run company-wide software applications 10, 15, or even 20 years ago? You had to purchase an expensive network server to get started. Many companies kept the server in a special room, cooled to keep the equipment from overheating since it had to run 24/7.
All of the computers in the office had to be the same. When you needed to upgrade hardware, an entire company-wide upgrade necessitated expensive purchases. If software had to be upgraded, the network IT staff had to bring the disk around to each work station and manually update it. Talk about time-consuming!
If your company had anyone traveling for business purposes, there were other expenses. Most companies installed a desktop unit at each employee’s work station. Employees who traveled frequently were issued a second laptop. Laptops might be plugged into a docking station, but they weren’t as powerful (back in the olden days) as desktops.
All of this added up to an expensive, time-consuming scenario that required an investment in hardware that would soon become outdated, staff to maintain the equipment, and space to house it.
Life With Cloud Computing
Now consider cloud applications. Software that operates in the cloud uses an internet browser, so any computer or electronic device that can connect to the internet can run cloud applications. There’s no need for all employees to have the same equipment; the graphic design and web design departments can use Macs and the accounting staff can use a PC. It’s all the same to cloud software.
No need to have IT staff walk around and update software manually. Instead, updates are pushed out automatically through the web-based interface. There’s no downtime, no manual updates, and a seamless transition into new software releases.
Cloud applications save time and money. Cloud ERP, HCM, BI and other systems can save:
- Upfront costs: Cloud applications eliminate many upfront costs. On-premises ERP systems can be expensive, but cloud applications typically have lower implementation costs. The cost savings can be channeled into other initiatives while the company can begin using the ERP system immediately.
- Space: Because you do not need to create an extensive onsite infrastructure, you do not need the space of older systems to house hardware and network servers.
- Personnel: IT personnel can use their time on other tasks rather than babysitting software updates.
- Costs: No special equipment is needed to run cloud applications. Any internet-connected device can be used to access and manage cloud ERP, BI, HCM and other systems required for your business.
- Custom integration: Companies that create cloud applications typically create different types of software that can be integrated easily with one another. Unless you’re integrating cloud applications with specialized software, there’s no longer a need for custom integrations or build-outs to accomplish many business goals and tasks.
When it comes to cutting costs long-term, cloud applications are the clear winner. They’re easier to implement, easier to manage, and easier to use. It’s time to move to the cloud.
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