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What is Cloud ERP Software?

Cloud-based computing (also called Software as a Service, or SaaS) allows users access to software applications that run on shared computing resources (for example, processing power, memory, and disk storage) via the Internet. These computing resources are maintained in remote data centers dedicated to hosting various applications on multiple platforms.

Cloud ERP is Software as a Service that allows users to access Enterprise Resource Planning (ERP) software over the Internet. Cloud ERP generally has much lower upfront costs, because computing resources are leased by the month rather than purchased outright and maintained on premises. Cloud ERP also gives companies access to their business-critical applications at any time from any location.

While technically the only difference between Cloud ERP and on-premises ERP is where the software is physically located, there are other significant differences. Here we explain some of the key characteristics and advantages of Cloud ERP software.

The Cloud is particularly valuable to small and medium-size businesses (SMB’s) because it provides access to full-function applications at a reasonable price without a substantial upfront expenditure for hardware and software. Using the right cloud provider, a company can rapidly scale their business productivity software as their business grows or a new company is added.

Take Control of Your Costs with Acumatica Cloud ERP
Acumatica provides a complete solution for your company at one affordable price. Priced for unlimited users, so you are free to grow. Choose how you want to pay: subscription or license. With the freedom to switch between both at any time.
The Benefits of Cloud Computing

Cloud ERP has been proven to reduce costs in many ways because it:

  • Avoids upfront costs for all computing infrastructure such as hardware and data servers
  • Reduces IT support services because IT support is provided by the data center
  • Eliminates paying upfront for application software licenses in favor of a monthly fee
  • Shrinks the cost of maintaining and supporting those applications since the cloud vendor handles the updates and upgrades

The most important benefits of Cloud ERP go beyond cost-savings and include:

  • Paying only for the computing resources needed
  • A fixed monthly rate so companies can use their cash on other business initiatives
  • Taking advantage of Cloud ERP applications faster since installation of hardware and software on servers or user devices is not required
  • The ability to adjust the amount of cloud service as a company’s computing or storage needs fluctuate
  • Enjoying the confidence that the data has been backed up and there is a disaster recovery plan
  • Avoiding attacks on the company’s server because the data in not stored locally, but in the cloud
  • Accessing the system from anywhere makes it easy for a company to expand geographically since the Internet is everywhere and there is no need to implement hardware and software at remote locations

Learn more about the benefits of cloud computing by reading this report from the Aberdeen Group, a highly respected industry analyst firm, entitled “Improve Your Midmarket Business Operations with Cloud Applications”. It provides statistics on improvements that have been achieved by using the Cloud.

Read how others have realized significant results with Cloud Computing.

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A new wave of technology has made Cloud computing possible

At its most basic, cloud computing is all about renting processing resources and storage rather than buying and maintaining them in-house (on premises). It may come as a surprise to some, but this is not a new concept. In the 1970’s, service firms used large mainframes to run applications and provide data storage for other companies that would rent those computer resources and storage space. This was called “time-sharing”.

Time-sharing was expensive and fell out of favor once the price of computers dropped and companies could afford to buy and maintain their own systems. For the last few decades, companies have been buying, installing and maintaining their hardware and software in their own facilities.

Fortunately, new technologies have been introduced, such as widespread Internet availability, low cost of mobile devices, expansion of computing power, and massive storage availability. Technology has improved to the point that very high functioning applications can safely and securely run remotely on computer hardware hosted remotely. This eliminates the need for individual companies to deal with hardware issues and allows their employees to work anywhere at any time.

IDC, a premier global provider of market intelligence, recent wrote about the “IT Industry’s 3rd Platform for Innovation and Growth”. In their eBook, “True Cloud Applications for Agile and Fast-Growing Businesses”, IDC discusses the “explosion of innovation” that we are witnessing.

Download the eBook to see what is in store for IT.

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Clearing the confusion from buzzwords around the cloud

Talk about the Cloud is everywhere, and so are cloud buzzwords, which can result in confusion and misconceptions. Here is a brief discussion of the more common terms:

Licensing options: Purchase or Subscription

  • Purchase (or Perpetual): These terms refer to when a company BUYS a software license. The company pays to owns the license and also pays an annual maintenance fee for upgrades.
  • Subscription: The company pays an annual or monthly charge to use the software license. Upgrades to the software is usually included in the subscription price.

Deployment options: On Premises, Hosted, or SaaS

  • On Premises (or In House): The company is responsible for the infrastructure (hardware, system software, communication hardware, software on user devices, etc.) and the deployment of the application software (implementation, support, upgrading, etc.)
  • Hosted: The company or hosting provider buys a license for the software. The hosting provider manages most, if not all, of the infrastructure and software deployment as described above. The hosting provider can be an independent company or a division of the company itself. Hosting is one way to outsource IT operations.
  • Software as a Service (SaaS): This method of deployment is a combined software licensing and delivery model in which software is licensed on a subscription basis and hosted by the software provider, all for a single price that is typically a fixed amount. In many cases the software provider uses a Public Cloud for the hosting.

Private Cloud and Public Cloud

  • Private cloud is privately owned and maintained by the company or a hosting provider. Based on business requirements or regulations, sometimes this may be the only option (view datasheet).
  • Public cloud is owned by a service company, such as Microsoft, IBM or Amazon. The service provides all the hardware, load balancing, backup and security.
  • Hybrid cloud is a blended approach with a mix of on-premises, private cloud and third-party, public cloud services.

Multi-Tenancy and Single-Tenancy

  • Multi-tenancy is where the Cloud software provider has single instance (version) of software on a server and serves multiple tenants (customers) simultaneously.
  • Single-tenancy is where each customer has their own application and data base.
  • Cost Savings
    • It is believed that multi-tenancy reduces the cost for the software provider, which is absolutely true for cloud apps that are quickly purchased and downloaded like Pandora, Facebook, etc.
    • For Cloud ERP, the cost savings are insignificant when compared to providing the server hardware, operating system, and database; development of the very sophisticated ERP programs; sales and marketing required; and on-going support.
  • Flexibility is reduced when you share the same program with many others. The impact may be loss of control in:
    • Customization and tailoring
    • Upgrading schedules

Thin Client and Web Services

  • A Thin Client, in cloud terms, is any device (PC, tablet or phone) that requires NO application or communication software to be downloaded. Any thin client can access the application from anywhere, similar to a web page.
  • Web Services are simply application components. They are designed for and used on the Web. Common examples are apps on a mobile phone, such a weather app. Business applications may include zip code look up, sales tax calculation, or much more sophisticated applications.

Note: Acumatica can run either as multi-tenant or single-tenant, be deployed in the cloud or on premises, and can be licensed either by subscription or purchase, depending on each customer’s needs.

To help in clarifying all the confusion the SMB group has created an eBook called “Clearing the ERP Clouds”.

Use this eBook to help guide you (enhanced for 2017).

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Not all "Clouds" are equal

Beware of “cloud washing” and “faux cloud” adaptations of older applications that purport to be re-engineered for cloud deployment. Most legacy applications have been retrofitted to run on the web.

When vendors place legacy software on a hosted virtual server, they claim to have a “cloud-based ERP solution”. But without software that was architected to maximize the capabilities of the cloud-computing, customers receive very few of the benefits described above. The presence of a thick client (a full-featured computer that requires software installed on the device) often requires longer installation times, dispersed data, client upgrades, and complicated remote access software.

When looking for cloud ERP software, make sure that it is web-based and True Cloud!

You can identify a “faux cloud” product because they will require software to be installed on the client (PC or device). Others add a special web server between the application and the user to interpret the application and serve up web pages to the client. Neither approach delivers the speed and responsiveness of a True Cloud design. True Cloud applications have no application code on the client device except a browser. Moreover, True Cloud applications are designed and built for the web and mobile devices so displays are responsive and automatically reflow content according to the screen size and orientation of the device.

To help clarify the confusion, the SMB group has created an eBook called “Clearing the ERP Clouds”.

Use this eBook to help guide you.

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The Benefits of Acumatica's Cloud ERP

Acumatica Cloud ERP is a flexible and cost-effective option for small and medium-sized businesses.

It is designed to respond to and overcome the inflexibility of many existing ERP solutions. This is done by allowing CHOICE of:

  • Functionality you wish to license with the Acumatica standard suites as well as optional add-on features
  • Computing power and data storage size needed now and when the business changes
  • Deployment options ranging from SaaS, hosted in a private cloud, or on premises, which can be switched as needs change
  • Licensing models of annual subscription or perpetual license
  • Access to your data so you can copy or move the data at any time, unlike many systems
  • Device independence so you can easily switch between any device, including Apple iPads or iPhone, Google Android, or Windows, Mac, or Linux desktop computer.

Acumatica ERP offers all the flexibility above, plus the safety and security of a hosting provider such as Amazon Web Services and Microsoft Azure public clouds.

Acumatica was founded in 2009 when our founders saw the opportunity to do things differently. From the ground up, Acumatica was built for the cloud. This is written into the company’s DNA and gives our customers the benefit of having a True Cloud solution.

Watch a short video (1:16 min) from John Howell, one of our founders, recorded in 2011. It speaks to the original vision of the company.

Acumatica 6 available on-premises or in the Cloud. This release includes enhancements that further our goal of providing a solution that boosts your productivity, delivers easy-to-use insights into your business, is easy to implement, and connects to other cloud applications to provide an overall increase in productivity.

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