Partner Article

To Host or not to Host

In business and IT the cloud revolution has thrown up some interesting questions of practice - one of which fits in nicely with a quote from old Bill.

As a company looking for software solutions, the popular fork in the proverbial road appears to be whether to buy and install business software packages or to rent them utilizing cloud-based hosting packages. The analogy I am sure we can all relate to, is that of buying or renting a house. Buying your own home is an attractive prospect, and in the long run will pay off financially. However, it is the short term intial costs of this option that has lead to the boom in rental over the past few years. This trend can also be seen in the business software industry - as smaller businesses struggle with rising costs, the option to rent your business IT solutions is becoming more and more attractive.

The important questions to ask regarding this conundrum are of course the financial ones: “What will be the affect on cash flow?” and “What will be the affect on my tax liability?”. These questions are highly personal to each individual business and in some cases difficult to predict, but should always be kept at the forefront of your mind.

In the case of most business software - including Enterprise Resource Planning (ERP) - a hosted or cloud-based software package is appealing. This option may mitigate effects of software shortcomings - if a change in software is made, you can be sure that the costs and risks will be far less in hosted software models.

To consider the other side of the coin, a major stumbling block for cloud-based solutions is the uncomfort surrounding outsourcing work within business - especially poignant in large comapnies who already have systems and departments designed to handle their business processes. So is the question as simple as big or small? Small companies or start-ups without a developed IT infrastructure will clearly be attracted to an on-demand software service which can be implemented with low intial cost and hosted externally.

Perhaps the most important point to consider when choosing to host or not to host, is the state of the software market. Is there reputable cloud-based vendors avaiblable for your software package? Is the price-point significantly different to non-hosted/owned purchase options? In the ERP software market, cloud-based software vendors are well established. Many of these vendors including Plex and Netsuite are developing cloud-based versions of original to-buy software packages gifting the consumer a directly comparible choice - making the selection of ERP software a slightly less daunting task.

The key to knowing the software market is research. ERPfocus provides research and vendor databases for ERP - in the online age of the blog you can always find an impartial and indepth resource for information on the product you are interested in. Seek this out and research, research, research.

This was posted in Bdaily's Members' News section by ERPfocus .