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When Will Cloud Surpass On-Premise as the Enterprise Status Quo?

by Dave Hannon

July 26, 2012

By Dave Hannon
@Daveatwispubs 


That's the million dollar question. It's no longer a question of IF cloud will become the standard enterprise software delivery model, it's a question of WHEN that tipping point will be tipped. I've been writing about cloud (when did we dro

The clock is ticking on cloud computing's takeover of the enterprise

p the "computing" part anyway?) since its earliest days and frankly, I had my doubts about its broad acceptance within the enterprise. There are still days when I worry that certain sectors of the market have gone cloud crazy, but mostly I'm drinking me some cloud Kool-Aid.

It's hard not to become a convert when there are so many experts not only telling you it's happening, but telling you why. For example, in a recent interview independent analyst Cindy Jutras provided me a very succinct analogy: Remember when online shopping first emerged and we were all a bit ske

ptical about plugging in our credit card info to a web site? Well, Jutras says a similar "trust factor" is happening with cloud based-ERP lately.

"Now, there’s less fear," she says in the insiderPROFILES interview. "It’s less of an emotional issue and more of a focus on the value SaaS and cloud solutions can bring. People are coming around."

A recent article in the Deloitte Review entitled "Cloud Hits the Enterprise" also predicts a continuing migration to cloud-based ERP.

"SaaS ERP will likely grow significantly as Oracle and SAP continue to pursue aggressive development and acquisition strategies. The focus will initially be on small and mid-size companies but over time will likely expand to include ever larger enterprises. However, it may be years before SaaS solutions develop the deep end-to-end capabilities necessary to compete with traditional ERP systems in the large enterprise space."

The article goes on to provide several suggestions on preparing your IT organization for the transition to cloud. It's definitely worth a look.

Research firm CompTIA is another enterprise cloud believer and presents a convincing argument as to why cloud is so attractive in the enterprise. “Advanced software for analytics, unified communications, enterprise resource planning, customer relationship management and other sophisticated technology solutions were often out of the price range or skill set of many businesses. With cloud-based solutions and delivery and either set monthly pricing or a pay-as-you-go model, these technologies come within the financial reach of even the smallest of small businesses.” 

And if you want to hear SAP's perspective on the benefits of moving to cloud-based ERP, check out Greg Chase's most recent article in SAPinsider entitled, "Why Manufacturers Are Flocking to SAP Business ByDesign."

But vendors, consultants and analysts predicting a trend are one thing. Hearing from companies that are actually doing it is another. And Bart & Associates, an IT provider to the U.S. government, recently implemented SAP Business All-in-One in the cloud and cited some benefits that are pretty difficult to argue with.

"The benefits we were looking for when choosing a solution were a completely integrated system, a single platform, real-time data, real-time analytics on the data, the ability to add more applications as needed, and certainly the functionality of a project management system," says Jonathan Evans, Vice President of Service Delivery, Bart & Associates in an insiderPROFILES article. "What the SAP software did for us was to bring all that together in a single integrated platform with business analytics, project management, and the ability to see all of this information in real time."

So, what do you think? Are we close to that tipping point where cloud is the go-to delivery method in the enterprise? Five years off? 10 years? 

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