- 9 July 2015
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What is Cloud Computing?
While no longer a foreign concept to most people, it’s helpful to level set and clarify the term ‘Cloud Computing’, used interchangeably with the term ‘software as a service’ (SaaS) in this document. In the interest of embracing industry standards we’ll refer to the National Institute of Standards and Technology’s definition of cloud computing, explaining it to be “A model for enabling convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction.” In short, it’s the ability to ‘subscribe’ to ERP (or another enterprise solution such as CRM or Payroll) in a turn-key fashion via the internet where the vendor owns, manages, monitors, and services the entire solution on your behalf.
For further refinement we’ll submit that traditional on premises deployment of business applications (where a customer buys perpetually licensed software, hardware, supporting infrastructure, and services for deployment on their own private network) differs greatly from the two most common approaches to cloud computing or software as a service, namely:
- Multi-tenant SaaS, where many customers share a single pool of computing resources across their collective organizations. In general terms, this model allows for massive scale and correspondingly compelling cost efficiency though the deployment of shared architecture across multiple ‘tenant’ customer companies. Multi-tenancy can be provisioned at the infrastructure level, platform level, or application level. (Epicor embraces multi-tenancy at the application level, generally regarded as the most cost efficient model for multi-tenant SaaS deployment.)
- Single-tenant SaaS, where a customer has computing resources dedicated to their exclusive use, and greater control over system administration and policies. This approach is most common where a customer’s business or technical priorities dictate that their SaaS deployment is entirely dedicated to their own use, and not to be shared or mingled with other tenants. Single-tenant SaaS is often provided out of the same physical location as multi-tenant SaaS to leverage data center efficiencies, but the privacy and integrity of each single-tenant SaaS deployment is kept absolutely separate from other cloud deployed customers.
It is important to remind the reader that Epicor actively supports all three deployment models (on premises, multi-tenant, and single-tenant) from the exact same Epicor ERP codebase.
There is no single best answer to the question ‘which of these models is best?’ Every customer has different needs, and brings different technical, business, and regulatory requirements to their deployment of Epicor ERP. Our solution consultants work closely with each customer to identify the right deployment model to meet their needs.
What is Motivating the Migration of ERP Systems to Cloud?
Since the earliest days of enterprise applications there has been tremendous corresponding investment in their supporting infrastructure (hardware, server systems, databases, professional services, administration tools, backup systems, staff, power, cooling, real estate, and more). As efficiency (and ease-of-use) progressed from mainframe to mini to client server to desktop to mobile, the cloud has emerged as this decade’s best answer to the question ‘how can we reduce the cost of quality in our enterprise applications?’
This pursuit of the cloud as a path to ERP agility, efficiency, and effectiveness has been validated by a number of studies and indicators in recent years3. While the financial and economic case for deploying Epicor ERP in the cloud are the subject of another paper4, the business case for Epicor ERP in the cloud is largely organized around these five pillars:
- Consistency—The ability to improve business operations by unifying and standardizing the enterprise onto a single, integrated Enterprise Resource Planning (ERP) solution at all levels.
- Efficiency—Delivering a better user experience and better user access combined with reduced time to value.
- Simplicity—The opportunity to remove complex IT infrastructure questions from the equation, and allowing the ERP selection and deployment process to be managed by line of business decision makers.
- Availability and Security—The manner by which cloud solutions offer massive scalability, improved security and reliability over on premises deployed applications.
- Agility—Being able to instantly adjust the deployment scope, scale, or modality in responses to changes in company’s business and technical needs.
In addition to these business benefits, the economic case for cloud computing is equally compelling. Reducing (and in some cases eliminating) the initial capital investment in software, hardware, and supporting infrastructure is widely seen as reducing the total cost of ownership (TCO) for customers. Indeed, one estimate reported that cloud-based ERP solutions can costs 50% less than on premises ERP solutions over a typical lifecycle.
Beyond the TCO, many Epicor ERP customers deploying in the cloud report faster time to value through rapid deployment of the application, and appreciate the predictable, regular monthly subscription pricing—typically expensed rather than capitalized as is the generally accepted practice for on premises deployments.
Epicor Software Corporation is a global leader delivering business software solutions to the manufacturing, distribution, retail, and service industries. With more than 40 years of experience, Epicor has more than 20,000 customers in over 150 countries. Epicor solutions enable companies to drive increased efficiency and improve profitability. With a history of innovation, industry expertise and passion for excellence, Epicor inspires customers to build lasting competitive advantage. Epicor provides the single point of accountability that local, regional, and global businesses demand. For more information, visit www.epicor.com.
Follow previous postings on http://www.ctnd.com/blog/ and don’t forget to check back next week, for part 2!