CLOUD VS. ON-PREMISES: BENEFITS AND DRAWBACKS OF A “LOCAL CLOUD”
Two of the most substantial cost benefits of cloud software are:
1. It is available via subscription pricing, so there’s no huge purchase investment. You can just “rent” it.
2. It is hosted on a remote server. Others pay for the electricity, air conditioning, equipment repairs and operating costs.
But you can benefit from these advantages using many of the on-premises ERP or CRM systems offered today. Most of the on-premises publishers like Sage Software allow you access to their software on a subscription basis. And, if you use a hosting center, you can locate your on-premises ERP or CRM package remotely in a “local cloud”, receiving many of the benefits of true cloud software.
So which option is better – cloud or on-premises? The answer to this question rests squarely on each of the package’s functionality. In other words, how capably will each package solve your critical business needs? If it’s a true cloud product, but it’s more expensive than an on-premises solution, then it may still be more than worth the additional outlay. Incremental revenues and profits, borne out of the more capable system’s ability to properly and reliably solve all your business needs, usually dwarf any savings that you may realize by selecting a cheaper alternative.
Pick the least expensive package that meets all your critical business needs, then work on deploying it in the most cost-effective way.
IMPORTANT: If the least expensive package is still more than your budget can handle, then maybe the addition of one or more critical features to one of the lesser expensive packages is the way to go, via custom programming. This is an area that requires great care, and we’ll talk about it in a future blog.
DSD Business Systems sells cloud and on-premises ERP and CRM solutions by Sage Software and NetSuite. Check us out at www.dsdinc.com.
Doug Deane is President of DSD Business Systems, a national provider of on-demand (cloud) and on-premises ERP and CRM software, specializing in wholesale distribution, manufacturing, warehouse management, inventory, business intelligence and eCommerce software. DSD offers Sage 100 (formerly MAS 90), Sage 300 (formerly Accpac), Sage 500 (formerly MAS 500), NetSuite, Sage FAS, Sage HRMS (formerly Abra), Sage CRM, Sage SalesLogix, Extended Solutions, and Custom Programming.