What everybody ought to know about the differences between cloud and on-premise

Most new ERP projects start in the cloud. Cloud is the future, it is the natural evolution of technology and companies are adopting to it. Organizations want to transform their businesses and realize that cloud is the gateway to modernization. There are many compelling aspects that speak for the cloud.

Ownership

Own the data​. You most valuable asset is you data, because your insights and knowledge is set you apart from the competition. That’s why you want to focus on turning data into value. Cloud services support you with that. On the contrary, on-premise requires you to own the hardware, software, infrastructure, maintenance as well​. This causes a lot of distraction and ties resources to useless activities. If you want to focus on your core business and on making a difference for your customers, then owning the data is all you care about. You don’t want to waste your staff and resources on keeping the lights on.

Payment structure

Cloud services are scalable. You pay storage and computing as used. Thus, you pay as you go and the subscription fee is tied to your actual needs. Cloud’s rent-versus-buy payment schedule means that you pay as you use the service. No big up-front purchase. On premise-licenses and required hardware are one-off capital purchases which you may or may not use​. You have to make a big investment up-front, then write off this one-off purchase over a certain time. Financially cloud can be very attractive.

Innovation

Get access to the latest innovations in software. Because cloud is centralized, you get automatic upgrades. You use a service that keeps on improving, which means that it is a gift that keeps on giving. All the time, at your own pace​ – you decide which innovations you want to use. Just like with your smartphone, you don’t have to use every new feature. With on-premise, upgrades are a project in itself. You have to buy every upgrade and its implementation. These expensive upgrades slow you down and prevent innovation.​

Security

SaaS providers have best-in-class security​ measures in place. They know that security is their customers #1 concern and they can’t afford to have a security breach, which would damage their reputation in the industry and ultimately their trust with their customers. That’s why they invest heavily in IT security. Companies with on-premise systems rely heavily on their corporate IT. Recent hacks suggest that on-premise security measures fall victim to inadequate cyberattack prevention while hackers fail to get into the clouds of the big hyperscalers like AWS.

Implementation

Software projects can be long, and daunting, and costly. Every CIO know this. There are many stories about projects that took much longer and were much costlier than initially planned. Some even failed and never went live. In the on-premise world, the mantra is “Do it all yourself”, from hardware installation to software implementation. Cloud takes a different approach. Since you only own the data, the main focus is on migrating the data and get it running. Pre-configured suites offer integrated industry functionalities out of the box​. It is even possible to have a cloud environment up-and-running during the sales cycle, because the IT infrastructure is already set-up.

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