ERP Battle for the Cloud

April 13, 2010
By manchester

ERP software vendors have taken the battle to the clouds. As analysts talk about the cloud and businesses embrace the cloud, vendors have deployed their armies and marketing dollars to the cloud. This article will document some past battles and document some new ones.

NetSuite versus Microsoft

The battle of words between NetSuite and Microsoft Dynamics has been well documented. There are many articles that describe the battle for VARs and customers. NetSuite started the fight with their 100% discount offer and Microsoft responded with a promotion of its own (documented by Rick Whiting in ChannelWeb and also by Seth Fineberg in WebCPA).

Newcomer Acumatica has also entered the promotion battle by targeting NetSuite customers with a fixed-price guarantee promotion. Acumatica utilizes the Microsoft Windows Azure platform and sells through VARs.

SAP versus Oracle

SAP and Oracle have also moved their ongoing battle to the cloud as documented by Brandon Bailey in SAP makes on-demand move in the Mercury News. The article discusses the SAP strategy of software with hardware choice versus the Oracle strategy of a complete bundled on-demand offering.

The battle of platform choices is not limited to SAP and Oracle …

Platform Battles

Several providers have used the cloud to create SaaS offerings while others are using the cloud to create hosted ERP software offerings. Each vendor takes a slighly different tactic to offer their solution and sometimes these have reprocussions for the amount of control that the customer has on his software and data. For example, a hosted offering gives maximum control (and potentially the maximum hassles), while a fully managed multi-tenant provides turnkey operations with less control.

Some vendors, such as NetSuite, buy colocation space and built their own cloud platform. Others such as Lawson (Amazon EC2) and Acumatica (Microsoft Windows Azure) use cloud platforms provided by third parties.

From a technical perspective, analysts and editors have argued about the impact of multi-tenant, single-tenant, hosting, and other deployment algorithms have on vendor costs. There is a lot to be learned from these discussions if you are building a cloud platform, however, as a customer all you need to worry about is price. Dennis Howett summarized this well in his article, Lawson teams with Amazon for cloud ERP on ZDnet. Phil Wainewright also makes a similiar point in the opening paragraph of his article Is SaaS the same as Cloud? in ZDnet.

ERP Cloud News Bottom Line

The battle for the cloud will deliver more customer options for on-demand ERP software. ERP buyers will benefit from the opportunity to select software based on their level of IT expertise, customization requirements, short term budget, long term budget, and more. On-premise and hosted ERP deployments will not disappear, because they will represent the best solution for some customers (but perhaps a declining number). Saavy customers will select a solution that offers both cloud and on-premise options so they can select the model that works for them – now and in the future.

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3 Responses to “ ERP Battle for the Cloud ”

  1. Gerald Park on April 13, 2010 at 3:05 pm

    I might object to including Oracle and SAP in the “cloud wars”. In my humble opinion, the battle for the cloud will be won by smaller, more nimble competitors.

  2. Gabriel Michaud on April 14, 2010 at 2:20 pm

    To win the ERP battle for the Cloud, you must have some allies and a good ERP solution.

    Some vendors think that by locking up their customers to their solutions by using the Cloud, they will win this battle. Customers will not become allies to this vendor if it increases its fees inconsiderably.

    Moreover, competing the VAR channel by selling directly to customers will not bring VARs as allies either.

    Furthermore, the ERP solution itself must not only be a good one but must also meet the specific requirements needed by the mid-sized businesses market throughout the offering of strong customization capabilities.

    Again, the use of proprietary customization tools, may limit the possibilities or the number of competent people to do customization, increasing the prices of those projects.

    Who will win the ERP Battle for the Cloud ? The vendor that offers win-win ERP solutions for everyone, including customers and VARs.

  3. Pushpinder on October 11, 2010 at 8:07 pm

    Well said Gerald.

    Cloud is for SME’s Only.

    Albeit biggies might come in once a foolproof hybrid cloud method is implemented.

    Atleast companies like SAP, Oracle, SUN, and Microsoft have no threat from any ABC in the next 5 years for cloud computing…

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