Choice, innovation, and quality: Three things that the craft beer industry has in common with the cloud computing market. But what if we told you the two are even more closely related than that? At MIBAR, we know a thing or two about these two seemingly unrelated trends in the market, working with a variety of food and beverage manufacturers and one of the leading providers of cloud ERP for these companies.
In fact, as we were writing our most recent whitepaper titled Signs Legacy ERP is Holding Your Food and Beverage Business Back, the similarities between craft beer and the cloud became quite clear. Nonexistent in the 80s, the two paths began to converge in the mid to late 90s before coming close to taking over the market today.
Though our whitepaper goes into much more detail, today, we’re going to discuss how these timelines ran parallel for years and explore the innovation and choice that each provides.
What do Craft Beer and the Cloud Have in Common?
Before understanding the similarities, it pays to know that the cloud isn’t an entirely new concept. In fact, many of the innovators in the 1960s predicted something similar to the cloud. The 1950s gave us time sharing, which was about as ‘cloud’ as the cloud could get at that time. By the 1960s, JCR Licklider envisioned an “intergalactic computer network” when working on ARPANET. When working on this program, Licklider envisioned “a global network connecting governments, institutions, corporations and individuals in which programs and data could be accessed from anywhere.”
Though the 80s caused a few hiccups and resulted in a few massive suppliers (SABMiller and SAP have that in common), the 90s market the dawning of a new era.
The Late 90s and Early 2000s: Cloud and Craft Beer Mainstays Enter the Market
By the late 90s, web-based accounting and business management solutions for small and medium businesses became a reality. Allowing users to access and manage their financials from a web browser rather than run on-premises, this is where the parallels come into play.
Like the formative years of the craft beer movement, where innovators like Anchor and Samuel Adams delivered new and experimental flavors only to see the average consumer pick up a macro beer, early uptake of the cloud was slow.
However, cloud providers continued to improve their offerings. Updates continued. Rather than the ten-year support schedule, companies could turn to a subscription model. As with the craft beer movement, smaller providers popped up while the originators grew. Sierra Nevada, Sam Adams, and Blue Moon started to see more shelf space, but global giants were generally unphased, testing out slightly-different iterations.
Similarly, organizations like cloud-originators NetSuite and Salesforce were entering the mind of potential buyers. By 2002, most ERP systems were “internet enabled,” allowing on-premises applications to access data from the internet to accomplish basic tasks.
Late 2000s: The Shifting Market
While still not in the mainstream—at least for business-critical applications—the cloud started to deliver more for companies who embraced it. Throughout the late aughts, companies began trusting more in the cloud, leading to an increased number of vendors setting up shop as cloud-first or cloud-only vendors.
These cloud vendors were able to poach top talent from legacy products, offering more work flexibility and creativity. As this was taking place, more and more homebrewers were refining their recipes and expanding, setting in motion a boom in innovation. New flavors, improvements to styles, and more creativity, the initial craft beer boom was upon us.
The Early 2010s: Macro and Legacy Providers Realize They Have a Problem
By 2010-2012—right around the last time the average food and beverage business last looked at ERP—the cloud was considered ‘fringe’ among late adopters. But legacy vendors knew they had a problem on their hands.
Proudly a Macro Beer, Proudly an On-Premises Vendor: Similar Campaigns, Similar Results
Much like Budweiser’s “Proudly a Macro Beer” campaign labeling craft beer drinkers as elitist hipsters, legacy vendors were making a last-ditch effort to scare decision makers and put the cloud in its place.
It was at this time that vendors pushed forward the idea that the cloud couldn’t live up to the hype, couldn’t meet the needs of major enterprises or global organizations, and couldn’t provide the security or uptime that an on-site server room could.
“Proudly a Macro Beer” worked just as well as “Proudly an on-premises product.”
Fake Cloud, Meet Fake Craft
It was at this time that both macro beer and legacy vendors knew they had a real problem. With declining market share, it was time to innovate. If you’ve heard of the term fake cloud, this is where it came from. Like early attempts from macro beers, early “cloud” offerings from legacy vendors were a slightly-repurposed version of the original.
Why the Acquisition Spree Worked for Some: Freedom vs. Control
Companies began to acquire innovators—but only some of the big-name acquisitions let their new subsidiaries do their own thing.
There’s a reason that beer drinkers still feel Lagunitas is a craft beer while they look warily at other brands. Despite being a fully-owned subsidiary of Heineken, the company was left with room to do what they wanted. Lagunitas received the support network they needed to deliver to an increasing global market, but was allowed the freedom to innovate.
Similarly, Oracle’s purchase of NetSuite made sense. Oracle gave NetSuite room to do what they wanted while taking over the delivery. This allowed not only for innovation, but also for a strong backbone—NetSuite runs on Oracle’s cloud.
2020: The Cloud’s Future is Clear
Though macro beer vendors still hold much of their respective market, in software, it’s no longer a debate—the cloud has won.Companies—both growing and global—have found that the reduced strain on internal resources, increased reliability, enhanced security, and unmatched flexibility are only a few of the reasons they made the jump.
Knowing this, the choice to continue using legacy/on-premises software—software that requires you to pay 20-30% of the initial license fee annually for maintenance and support—is not one that benefits you in this high-speed, high-stakes food and beverage businesses landscape.
How to Know if Legacy ERP is Failing to Deliver for Your Food and Beverage Business
If you’re like most companies, the last time you looked at ERP was likely six to ten years ago. Things have changed a lot since then. Think of it like this: Could you imagine using the first-generation iPhone? That’s what you’re getting from legacy ERP.
If you’re looking to learn all the other ways that legacy ERP is holding your business back, we invite you to download two free guides; the above-mentioned Signs Legacy ERP is Holding You Back and True Cloud/Fake Cloud.
Each shows you the dangers of legacy ERP and explores how the cloud stands out. After reading those, we invite you to get in contact with us for a free consultation.