One difficulty of planning to move your ERP to the cloud: The term is largely a marketing creation. Depending on who's doing the talking, cloud can mean many different things. No wonder there is still a lot of confusion about the different types of cloud computing.
"Cloud is more of a branding and marketing apparatus for the industry to package services in a consumable way," than it is a term with concrete meaning, said Stephen Moss, senior vice president of managed technologies at PCM, an IT services provider.
Chris LeBeau, director of IT at Advanced Technology Services chimed in, "Many people are still confused, and sometimes fooled, by deployment options that vendors slap the cloud buzzword on, but [which] are really the old hosting model that simply takes what might have been on-premises and puts it in the vendor's data center."
This arrangement describes classic IT outsourcing or managed services, and it has existed for decades.
Cloud, on the other hand, carries the connotation of services and software being delivered and maintained by a provider, along with an IT infrastructure.
"The cloud to me is more based on next-generation services and the ability to continue to innovate and enhance your processes," Moss said. Cloud is, by nature, more dynamic than IT outsourcing.
Sorting through the different types of cloud computing is an important task before proceeding with migration planning for ERP. The selection of platforms and types of cloud computing services can affect your costs, degree of flexibility and security, as well as the amount of customization that is possible.
The provider is key in different types of cloud computing
When most people talk about cloud today, they are referring to the shifting of IT infrastructure from running on-premises to running in a cloud provider's environment. The software, platforms or IT infrastructures are maintained by a services provider in the public cloud (such as Amazon Web Services or Microsoft Azure) or the private cloud (one operated by a services provider).
With public cloud, the deployment may be multi-tenant, where infrastructure is shared by more than one company, thereby reducing costs, or private -- also called single tenant -- where the customer has its own dedicated database and code base, resulting in comparatively higher costs. A software as a service (SaaS) ERP system is a type of public cloud application that can be either single or multi-tenant.
Today, most manufacturers that have migrated to the cloud have hybrid cloud environments, meaning they use a mix of different types of cloud computing and on-premises deployments of IT resources for the optimal balance of agility and cost. Hybrid environments are often necessary, as cloud ERP vendors do not always have every capability a manufacturer might need. Functions such as distribution and warehousing are easily carved off to reside either on-premises or with a different cloud service provider.
Private cloud allows a much greater degree of customization than public -- where there is little to no customization -- but at a price. This offering is designed for higher security, as the environment is not shared.
The key when sorting through the different types of cloud computing is to understand, at a high level, what flavor of cloud the ERP vendor provides -- some offer multiple types of cloud computing -- while not getting bogged down in the technicalities.
"Don't get hung up on the type of cloud offering," said Linsey Ryan, principal in the enterprise solutions practice at consulting firm KPMG. "If I were a buyer, I would look at capabilities and how much they cost. Those things are the most important to me."
Start planning a move to cloud ERP
Know what you're getting in a SaaS ERP upgrade
Understand hybrid ERP business processes