First, it doesn’t matter how you define “The Cloud”. People have defined the cloud in 3 different ways that I’ve heard recently. First, some think that SaaS (Software as a Service) is the cloud. Second, some think that anything running in a browser whether on premise or off-site is the cloud. Third, some think that the cloud is simply moving any legacy program to having it hosted elsewhere-regardless of how this is deployed.
Does it matter for small to medium sized businesses how the cloud is defined? I used to think that it does matter. But does it? Why?
Most of us are in business to solve the problems that clients have. When I probe further with clients and prospective clients about why they want to move to a potential cloud offering-no one offers a technical reason.
Most simply don’t want to keep buying hardware that becomes obsolete in 3 years along with operating systems and databases that do the same thing but at different, and often inconvenient intervals. Most don’t want to pay for upgrades that can be lumpy cash wise and inconvenient from an interruption standpoint.
Few businesses that I’ve spoken to are looking to the cloud because it’s the trendy thing to do or because they’ve read that smart business people are doing this. If anything, our clients have shared that they are worried about having their data locked somewhere else that they can’t control it and integrate with it.
Fortunately web services are becoming more and more prevalent. These web services, used for seamless and convenient integration, however are becoming more and more available to legacy systems. For example both Dynamics GP and Dynamics SL (NAV too) have an impressive array of either existing web services available or tools to create your own web services. Web Services can even be created for integration to custom screens you created years ago-and which work just fine still.
I’ve also spoken to people that want to move to the cloud for other reasons. One non-ERP SaaS-only software vendor based in state far from us said to me that they prefer their new ERP solution to be on-premise because they are SaaS providers, have a data center, and know how costly a SaaS solution can be over time. That was a surprise!
I could see his point. If you have to have the data center anyway to host your own SaaS solution for the product you are selling-why pay someone else to run the solution off-site. An important part of what you are paying for with SaaS is the infrastructure and responsibility for keeping the environment up-to-date.
Many small non-profits are considering moving their existing Dynamics SL and Dynamics GP implementations to a hosting center to save on IT payroll. Obviously these types of conversations have to stay anonymous-but they are taking place. There IS an economy of scale to moving your small Dynamics implementation to a hosting center if you can free up an IT resource or two for other purposes. Consider what one IT person costs and you realize quickly the potential savings.
So my conclusion 6 months ago, that people would want to flock to the cloud because the solution could scale better, offered better IT resources, and was more convenient to access from multiple remote locations, was wrong.
People are considering moving to hosting their solution somewhere else, but the flock to the cloud (however defined) is something not yet happening. ERP and accounting software clients don’t like disruption when what they have works well. Even if the software is free-there is a cost in moving data, retraining staff, configuring, and replacing the people that can’t make the transition.
So the cloud keeps coming at us although the hype is slowing down. Hopefully this Minnesota experience and analysis is helpful to you too in your thoughts about what to do next.