Cloud has progressed a long way from being a hype to being a necessity. Cloud-based ERP may not be as mature as the Cloud itself. There are a variety of reasons for this, but a lot of this is situational rather than being the problem itself.
“Cloud” – the concept is over seven years old. Early adopters had to establish why cloud is helpful and what problem it tries to solve. Predominantly cloud has been an infrastructure sale because that’s where the big bucks lie. But, has cloud solved the local datacenter problem, or has it just shifted the problem from the local Systems Operations Group to a Cloud Operator who provides servers on the cloud?
As the saying goes, “If all you have is a hammer, every problem will look like a nail.” Yes, the common pitch by IaaS (Infrastructure as a Service) providers is that you can reduce your datacenter costs heavily, and reduce your manpower costs if you put your servers on the cloud. This is true, but needn’t necessarily be! What you shift to the cloud could also determine how effective the whole transition is. CAPEX to OPEX is the biggest benefit of adopting IaaS. Here again, how long you need and the associated costs determine if it is beneficial.
In addition to the Cost per Instance on the Cloud, the most significant cost is the Bandwidth cost and its associated latency. Bandwidth is cheap, but it has not become so cheap that it can replace the cost of LAN which is just a onetime cost of a few routers and the power it requires.
So, what should be shifted to the Cloud?
- Any hardware requirement that is just needed for a small amount of time (say a few weeks or months)
- Any hardware that is required occasionally (say once in 15 days for a day)
- Any hardware infrastructure that is extremely over provisioned to address that once in a season surge in requirement for computing power
- Any hardware (the solution that it contains), that is not highly dependent on other related solutions in the enterprise
And, what should possibly not be shifted to Cloud?
- Proprietary Hardware and the solutions that depend heavily on the local infrastructure and the devices which already run on a low footprint infrastructure
- High network intensive solutions, which were designed with existence of LAN as non-negotiable
- Infrastructure for solutions that by law require data to be stored for long period of time, because storage is a fixed cost in IaaS and its charged, whether used or not
With all this, system operators are still required, as they still need to administer the servers, just that the servers are not physically near, and is more fault tolerant, resident and highly scalable.
IaaS is highly cost efficient if the right choice is made. A right tool to the right problem will definitely be valuable. The choice of the tool depends on us. If something goes wrong, in most of the situations it is not because of the tool, but because of the choice made.
To reap the benefits of IaaS, the software solutions in the enterprise have to be Architected for the Cloud, and that means significant investments and its associated maintenance overheads. Technology obsolescence adds another dimension to this problem. A solution is only as good as the underlying operating system, the software version, the drivers, the database, and so on. All these have their own refresh cycles and maintaining them in sync always, is a dedicated effort.
SaaS (Software as a Service) addresses all these problems, and enables the business to move to a pure OPEX mode, irrespective of the complexity of the underlying solution.
Imagine a solution that is evergreen, keeps on evolving as the industry progresses, is available on the latest platform, maintained and supported at a single monthly subscription. This is the reality offered by best-of-breed SaaS Solutions.
While Solutions address a variety of business verticals, for simplicity, lets name them ERP, and the offering as Cloud ERP for this discussion.
Is having an ERP on an IaaS called Cloud ERP? Definitely not! A cloud ERP is supposed to address a variety of business challenges.
Ask your Cloud ERP vendor a few of these questions:
- Will a server be provisioned exclusively for me?
- Will I have to pay for a new version that gets released next year?
- Will the software improve if I do not ask for a change?
- If there is a change done specifically for me, will it be redone when the next version of the software arrives on the cloud?
- Will what I see today, be the way I see it, for the years to come?
If the answers are Yes, then possibly you have a solution that is earmarked for you and is just a solution deployed in an IaaS and possibly not a solution that is architected for the cloud.
A Cloud Architected ERP should:
- Be transparently scalable, address your growing business
- Be multi-tenant with the ability to handle multiple tenants with the highest level of data security
- Constantly evolve without affecting any of the refinements made specifically for you
- Be able to keep pace with the changing usage patterns in the user community
- Be context aware responding to usage patterns, geographic locations, multiple devices..
With Internet of Things (IoT), the landscape of solution offerings has started to change. Key business decisions are being done on wearable devices. Solutions have moved on from tablets and mobile devices to the watch on your wrist, the Glass you wear, the dashboard on your car, the shoes you wear, the drones that deliver your merchandise at your door steps, and so on…
An agile solution that is constantly evolving and keeps pace with the rapid changes in technology and usage patterns of the users, is what the current business needs.
Going forward, “We should not be using the solutions, but, they should be talking to us, suggesting us what is relevant in the current context”.
Cloud ERP is here to make this a reality!
Srinivasan Ramaswamy is Vice President of Technology at Ramco Systems.