The cloud is continually growing, not only do most people now know what cloud computing is but most enterprises are making bold steps to becoming cloud based. Be it a fully unified system like NetSuite or gradually migrating their current business systems one department at a time, the cloud continues to develop and is showing no signs of slowing.
Over the last 5-10 years the capabilities of cloud computing has drastically changed the way businesses operate. Now on-premise solutions are no longer the best way to manage HR and payroll, stock management, distribution chains or most day to day business operations, in fact cloud based business solutions are becoming the norm when enterprises look to upgrade.
So why is the cloud growing at the expense of on-premise business solutions?
The cloud is cost effective
One of the many reasons SME’s choose the cloud over on-premise solutions is the ability to scale up operations as the business grows. This allows for new systems to be implemented at a growing rate, lowering the initial investment needed to get them off the ground where that investment could be better placed.
Cloud based business solutions also tend to work on a subscription model where most offer a pay-as-you-go service. The ability to pay monthly (or occasionally yearly at a discounted rate) allows for business to keep hold of their capital and minimises risk. When a new user is needed to be added to the system or a new service is, the process to implement this is usually instant and merely added onto a monthly bill.
On-premise solutions work very differently, large amounts of expensive hardware is needed to host software, then there is the actual cost of the software as well as the cost of an engineer to implement it. All of this tied together means the investment to get started is dramatically higher and more planning is needed to accommodate future business developments.
One of the most overlooked costs with on-premise software is the cost to maintain and upgrade. Hardware can deteriorate over time, software can become outdated and all of this costs money to be fixed. As well as the space hardware takes up, the constant flow of electricity needed to keep systems online and the time it takes implement, on-premises solutions more often than not cost a lot more than originally budgeted for.
Upgrades become something to look forward to
Upgrades should be something to look forward to, it’s a sign of something getting better or a common bug being fixed so it doesn’t hassle you again. With cloud based software upgrades are instant, often going unnoticed by it’s users. Sometimes it’s a big update that rolls out others it’s a little patch to fix a minor issue, regardless of the size of the update they both take the same time and incur no extra costs.
NetSuite roll out at least 2 major upgrades a year which lead to no downtime and goes live to all it’s users simultaneously. With a host of new features added to it’s system, new graphical designs and usability improvements, upgrades become a stress-free process many look forward to.
However joyful cloud upgrades can be, the same cannot be said about on-premise upgrades. More often than not on-premise upgrades require additional costs and downtime can be inevitable which leads to a disruption in the way a business runs.
A lot of businesses who use on-premise software have to plan ahead for upgrades and ask themselves dreaded questions like “can we afford to upgrade?” and “Is the upgrade vital enough to incur downtime addition support for staff?”
Security and reliability
It’s often quite easy to forget just how important security is when handling sensitive data. A leak of customer data such as banking information, address details or anything is sure to scare off potential customers as well as infuriating existing ones.
In recent studies, the cloud is now more secure and reliable than on-premise systems. When working with a cloud based product one of the services you pay for is the security of the solution where the company would have dedicated staff maintaining their systems for all forms of possible breaches.
With on-premise systems security needs to be much more than locking the door to the server room and ensuring all passwords are randomly generated. Security is a crucial point to consider when choosing between cloud and on-premise, you need vast knowledge of advanced security and need to know your system is safe all year round.
As well as being more secure, the cloud is more reliable with less downtime on average per year in comparison to on-premise software. Because of planned and unplanned maintenance, power outages and other occurrences, moving your business management software to the cloud can now mean less downtime.
NetSuite has an uptime of 99.98% on average, higher than the average on-premise solution. As all on-premise solutions are different, it’s difficult to produce a figure of average uptime but betanews.com show exchange on-premise uptime at 99.65% which a year would be a difference of 28 hours and 54 minutes. When you calculate how much one hour of downtime can cost your business, nearly 29 extra hours of it can become very expensive.
Freedom to work anywhere
As cloud based business solutions are accessible over the internet, staff can access their CRM, ERP, accounts or pretty much anything, anywhere. The ability to quickly login over a secure connection and update records, view important information or just check real time statistics is something that only cloud based solutions offer.
With NetSuite not only can you access information from anywhere, there are even mobile applications to make using the system easier on the go. This becomes a massive advantage for an active sales teams, collaborating with users in other countries or just for those who want to work from home.
As you can imagine, on-premise means exactly that. Hardware is stored on site and it’s data can only be accessed when on site making it difficult to work from other locations. Overall on-premise solutions make things more difficult and can be counter productive, updating a record which would take a couple of minutes with a cloud solution can be a long process and important information can become lost in translation.
All in all there is a lot to consider when deciding which direction would be best to go and these are only a handful of reasons as to why cloud computing is ever growing at the expense of on-premise software.
If you would like to discuss how our cloud based business solution can benefit your business, please get in touch. Please share your thoughts on this article in the comments below.