Silicon Valley: Where Are the ERP Cloud Solutions?
By Reed Kingston
At StrataFusion, we are big proponents of cloud infrastructure and applications for all of the obvious reasons: cost, flexibility, security, focus on the business vs. the technology, etc.
We’ve helped many clients deploy application architectures that rely extensively on cloud technology, and users can choose from a range of solutions for everything from infrastructure to applications. Everything except enterprise resource planning (ERP), that is.
In our experience, NetSuite is by far the leading cloud solution for ERP, with a broad offering of modules that can support many different types of businesses. But things get pretty thin after that. We are excited about some new offerings coming to market from Kenandy (running on the Force.com platform) and a few others, but most of these are relatively new entrants, with functionality that will be evolving. For clients seeking a true cloud ERP solution, this begs the question: “Where are all of the other big names?” And equally important: “What exactly is a ‘true’ cloud solution, and what parts of it being cloud-based create the value users are looking for?”
The pure-play cloud players differentiate themselves with multi-tenant platforms, capable of supporting multiple clients with a common code base and a shared database. And they do a great job of communicating the benefits of that approach compared to the alternative of licensing and running similar systems in-house.
Some of the big names in traditional, on-premise ERP— companies like Oracle and SAP — have had false starts at launching multi-tenant offerings. But it is possible to run those solutions through managed services providers, and by so doing tap many of same benefits that the pure play providers tout: no on-site hardware, fewer in-house technical support specialists required, access to expertise that would be hard to maintain in-house, etc. The costs may be higher than running a pure-play multi-tenant solution, but the benefits make it worthwhile for some companies.
We have done hands-on comparisons of the capabilities of the current crop of cloud solution vs. the big-name traditional ERP solutions. There is still large functionality gap between what some global companies need versus what these “pure play” cloud companies are able to provide today. The lack of options makes for a challenging decision by companies as far as which ERP to adopt that will fit their needs now, and as they grow.
It’s always good to have clear choices. The problem is, right now the choice in ERP isn’t “cloud vs. on-premise” or “subscription vs. license” or “lots of functions/features vs. not so much.” It’s all of the above.