Some ERP software vendors are sending solutions into the ring that aren’t true contenders in the cloud marketplace. Thanks to savvy marketing, they look like “true cloud” solutions and promise to deliver the distinct advantages of “true cloud” solutions, but…they’re not. We have seen too many businesses make the mistake of signing on with an ERP software vendor claiming to run their hosted offerings in the cloud, only to discover their cloud isn’t really a cloud at all.

Need help making sense of it all? Keep reading as we explore the realities of true cloud computing.

Business Software Faceoff: Real Cloud vs. Fake Cloud

The cloud software marketplace has been exploding for several years now, as more companies catch on to the distinct advantages of migrating their business processes, applications, and data off-premise and into the cloud. It’s no wonder that some legacy software vendors—in an effort to stay relevant in a changing marketplace—have made a few tweaks to their service models and marketing strategies to appear “cloudier” than they are.

A word to the wise: “cloud” doesn’t always mean “cloud” and “off-premise” isn’t synonymous with “cloud-based”—unless you’re working with a true, multi-tenant, single-code software-as-a-service (SaaS) provider such as Acumatica, Dynamics 365, or NetSuite.

Here’s what holds true for real cloud solutions:

  • They’re built from the ground-up for the cloud. They’re coded to work as fully hosted solutions—accessible through the web on any connected computer or device—and managed across hundreds of servers and multiple levels of data redundancy.
  • They’re multi-tenant, single code. The beauty of a true cloud solution is that it leverages shared resources, wherein development and service costs are spread across multiple customers who access the same solution (the same version of the same code) from the same cloud. This means any time there’s a software enhancement or bug fix, everyone is brought up-to-date automatically, at the same time, with minimal (if any) downtime. And there’s no such thing as “version lock” in true cloud solutions because even customizations upgrade seamlessly.
  • They’re inherently scalable. Due to their architecture and shared tenancy delivery model, cloud solutions can be scaled up and down (although usually up!) to accommodate growth and innovation, as processing capacity and business requirements change. Adding new functionality and users is relatively simple, affordable, and quick, in keeping with the promise of agility.
  • They’re innately flexible. They’re customizable and easily integrated with other on-premises and cloud-based applications so businesses can configure their systems to work they way they need them to work—and to deliver the data they need for 360-degree operational and financial insights. What’s more, customizations and integrations don’t have to be re-configured after software updates, creating a seamless and consistent user experience.

Find more insights in Checklist: What to Expect in a Cloud-Based ERP System.

On the other hand, the cloudiness of fake cloud solutions are distinctly hazy. Here’s what makes them not-quite-true-cloud contenders:

  • They’re built as on-premise systems. Their software was likely created before the cloud was born, and therefore meant to live on customers’ hardware and servers. To make it more accessible and cloudlike, however, vendors and/or infrastructure services companies will remotely host the software on their customers’ behalf in third-party data centers. But it’s still, by and large, the same legacy software—it just lives off-premise.
  • They’re single-tenant, multiple code. While customers on a true cloud solution use the same version of software that’s automatically updated en masse, fake cloud customers continue to access their own, independent version of the software that needs to be maintained and supported independently by their vendor or third-party. Keeping everyone’s custom code up-to-date and working properly isn’t a scalable process for either party, resulting in the potential for increased costs, extra system downtime, and less frequent updates.
  • They’re not built for scalability. Legacy systems—even in their fake clud iterations—require the up-front license, hardware, and software fees that are virtually eliminated by the true cloud delivery model, so adding new functionality and users isn’t as easy as adjusting their SaaS package. Additionally, since architecture wasn’t built for the swift evolution of today’s business, so they can’t deliver the swift upgrades customers tend to expect from a modern (true) cloud ERP solution.
  • They’re innately inflexible. Fake cloud solutions are built on legacy code that tends to require costly and labor-intensive re-writes for customizations and integrations. As expressed in the other points, there’s nothing particularly flexible about software that wasn’t built in and for cloud computing—so any comparison is really just “apples and oranges.”

If you’re moving your company’s data out of a legacy environment or starting fresh with an ERP system, make sure you know what you’re getting into—and don’t make assumptions about the “cloud” offerings being considered. Contact us for help assessing your existing IT environment and choosing the right ERP solution to meet your needs.

Additional Cloud Resources:

How Strategy Can Ensure a Secure and Efficient Move to the Cloud

3 Reasons To Put Your ERP System in the Cloud

5 Tips for Preparing Your Employees For a First-Time Cloud ERP System Implementation