Cloud ERP vs Hosted ERP

Should You Choose a Hosted or Cloud ERP Software Solution?

When it comes to selecting the right Enterprise Resource Planning (ERP) software to manage your critical business processes, you are presented with several purchasing and access models to choose from. With the rise of cloud ERP and other solutions accessible over the internet, there are a few things you need to understand before you make your decision.

Make Your Data Instantly Accessible Over the Internet

Traditionally, ERP systems have been on premise or installed locally on servers owned by your company. In the last 15 years, however, many systems have either been designed or re-designed to keep up with the fast-paced, competitive world that requires you to make quick, accurate decisions in response to changes in the environment. This has led to a new generation of ERP solutions where your system and data are fully accessible over the Internet. When your ERP solution is available through an internet connection, your employees can access the information they need to do their jobs from any location. Whether they are at a job site managing a project, in a sales meeting showing projections to a client, or on an airplane reviewing quarterly financials, your critical business information and transaction data can be viewed, adjusted, and reported on at any time, in any place.

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Information accessibility is a big advantage that you need to consider when choosing the right solution to invest in. If this is the avenue you want to pursue, then you need to understand the difference between hosted ERP systems and cloud ERP systems. Even though they are both delivered over the Internet, they are very different from each other.

What is a Hosted ERP Software Solution?

A hosted ERP solution is a lot like the traditional on premise model, you still purchase the software licenses, but they are hosted by the software provider. In some, if not all cases, you are not sharing the server with other clients, so you have to pay for those server licenses, increasing the cost of your solution. If you are in a shared environment, you are vulnerable to issues like decreased performance, security breaches and server technical problems. This option is less scalable because of the architecture it uses, and usually requires you to install software on your computer to access the information securely (for example, a VPN). On the positive side, you can still customize the system and the data is yours, but you are not really taking advantage of all the benefits of the cloud.

What is a Cloud ERP Software Solution?

A true cloud ERP is very different. The concept is simple: your ERP vendor lets you run computer applications over the Internet, without the need for installing any special software on your computer or having to buy or “rent” servers. This is commonly known as SaaS, or Software as a Service. All you need is a browser and an Internet connection. This option offers a level of scalability that hosting solutions cannot. Information is balanced across a cluster of multiple servers, where multiple “tenants” hold their information. Because of the redundancy put in place, if one server goes down, there is no lost information or downtime. The shared architecture allows performance across all servers to be balanced, decreasing or eliminating the performance issues you will see in traditional hosting models. Furthermore, cloud ERP system enhancements are rolled out automatically by the vendor, assuring all customers are always in the latest version of the system, avoiding “version lock.”

Get Reliable Advice on Software Options

At Rand Group, we offer an unbiased approach to software selection and offer both hosted and cloud ERP options. We recently became a NetSuite partner, the pioneers of cloud computing in the ERP industry. NetSuite provides a suite of cloud-based financials/ERP and omni-channel commerce software that runs the business of more than 30,000 companies, organizations, and subsidiaries in more than 100 countries. Reach out to our NetSuite team if you are interested in learning more about NetSuite pricing and what Rand Group can do for your business.

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