After reading a lot about cloud computing over the past few months, I came to the conclusion that there was a lot of misinformation surrounding cloud computing, especially as it relates to Enterprise Resource Planning (ERP). In an attempt to help others better understand “the cloud” I thought I would try and dispel five of the most common beliefs (er…myths) about cloud computing. I’m sure there are others, but these are what I saw as the most common. Without further adieu…
1. Cloud Computing Is Cheap
While the cloud can save companies money, especially in terms of upfront capital payments, reduced server expenses and a smaller IT staff, it can still raise costs in areas like training, software configuration and data migration.
Sure, many companies will still benefit financially overtime by using the cloud, but this is dependent on each company’s specific circumstances. Generally, SaaS tends to be cheaper in the long run for smaller companies that do not have the IT resources to manage and install applications. But for a mid- to large-sized company who can afford the IT infrastructure, in the long run a cloud system may actually end up costing them more than an on-premise solution. That’s because the recurring costs of a cloud system, combined with the ongoing costs of internal IT resources will cost more than the costs associated with an on-premise system.
2. Cloud ERP Cannot Be Customized
Typically this depends on whether you are dealing with a single-tenant or multi-tenant system. If your cloud system is single-tenant then it is very customizable. You essentially have the flexibility to scale your system as you grown and as you see fit.
Many platforms, such as Microsoft Dynamics AX are fully customizable, including offering, customizable reporting, Business Intelligence and KPIs.
3. If the Internet Goes Down, Your Business Goes Down
Cloud ERP contracts include SLA provisions with minimum uptimes, with guarantees included. World class cloud providers will have daily data backups and advanced disaster recovery procedures to ensure that even if the Internet goes down, your data will still be safe, secure and accessible.
4. Cloud Computing Is Only useful for small businesses and consumers
Unlike smaller companies which have smaller systems to migrate, larger companies usually have larger legacy systems that require migration. This often gives the notion that it is not economical or feasible for larger businesses to transition to the cloud and therefore only smaller companies should consider using SaaS. However, there are lots of examples of companies that have successfully implemented a two-tier ERP model and have been successful on a global scale doing so.
5. Our Data Isn’t As Secure in the Cloud
Arguably the most common concern for any business considering a move to the cloud is that of privacy and security. So what’s the difference between an on-premise system and a cloud system in terms of security?
With an on-premise system your IT infrastructure is housed in house, within your company headquarters. Usually it is within a secure, windowless room, with reinforced cement or steel. And if you are a big enough organization there should be around the clock security.
With a cloud system, data centers are housed by large organizations in state-of-the-art facilities with building fortifications that can typically withstand high magnitude earthquakes and other disasters. Often these facilities will be housed underground and have the kind of security to that of Fort Knox.
In terms of physical location, there is nothing to worry about with the cloud.
The other side of the coin is transmission and access security. With transmission, the cloud provider is as much concerned with a security breach as you are. If they get breached and important client data is compromised, this isn’t going to bold well for their organization. For this reason most will perform rigorous vulnerability scans, log threats and be audited for specific security-related compliance. Data is fully secured, during transmission and at rest. Regarding access, in a single tenant environment there is no risk of data being exposed to users who are not authorized to access that data.
There you have it, a few of the top myths of the cloud dispelled once and for all. Did I miss any? Let me know in the comments.