Over the past decade, the Software as a Service (SaaS) delivery model has become the new standard when it comes to business applications and systems. In fact, today it is common for organizations of all sizes and sectors to enjoy the benefits of cloud-based office applications, CRM, and ERP , to name just a few examples.
According to Gartner forecasts , the global public cloud market is expected to grow by more than 20% in 2022, totaling US$494,7 billion. As in previous years, SaaS continues to be the segment with the largest investment and is expected to reach an impressive US$176,6 billion.
However, a word of caution: not all SaaS is a truly cloud-based solution. Many companies sell business solutions and applications that are merely hosted in the cloud. This is, therefore, a "fake cloud".
Next, you'll discover how native and cloud-hosted solutions differ from each other and how this can impact your business operations. Check it out!
Cloud or fake cloud: understand the difference.
Milind Govekar, vice president of Gartner, said that "there is no business strategy without a cloud strategy." This makes it clear that the cloud is not something so simple and standardized, and therefore its solutions, platforms, infrastructure, etc., must be chosen carefully, considering all its characteristics.
In this sense, it is crucial to differentiate between cloud-native solutions and those hosted in the cloud.
Consider, for example, that you adopt a cloud-based ERP. This means that it was natively developed to operate in that environment, in an instance that serves your company and all customers simultaneously, on a shared infrastructure.
The controls in the underlying code keep each company contracting the system in unique and secure logical "units." This pooling of resources, known as multi-tenancy, is what ensures the true agility and scalability of the cloud.
In the case of updates, for example, there is only one instance to be updated, and all clients will enjoy the new features simultaneously.
In turn, a cloud-hosted ERP is built on a multi-instance platform. In this case, each client or tenant receives their own server.
To scale, new servers must be added manually, which is expensive, time-consuming, and difficult to maintain.
In the case of an upgrade, the latest software must be installed separately for each instance, significantly delaying its ability to benefit from new features.
Advantages of a true cloud-based ERP solution
Now that you understand the basic difference between "true cloud" and "fake cloud," it's time to understand the practical implications of adopting these types of solutions in your company. To do this, consider the following aspects:
Updates and maintenance
A true cloud-based ERP solution ensures free, automatic, and frequent updates that do not result in downtime or interruption of operations.
A fake cloud solution, however, does not offer these advantages. This is because, generally, the hosting provider is not responsible for software updates.
Therefore, suppliers generally do not make small corrections or frequent updates and wait until there are significant improvements to be made.
As a result, updates are time-consuming, which can lead to significant operational downtime. Additionally, users have to deal with numerous sudden changes, negatively impacting the user experience.
Furthermore, as already mentioned, fake cloud solutions have different instances, which means that each one needs to be updated individually.
Safety
A true cloud-based ERP is continuously updated with new features and bug fixes. All this without any downtime.
Furthermore, cloud-native solutions generally utilize leading global cloud computing providers, where security is their top priority.
In a fake cloud, you'll have several large and potentially risky updates occurring a few times a year. Until your provider schedules updates for your environment, your company will have to live with occasional bugs, which can leave it exposed to security risks.
Adding to this is the fact that this SaaS model uses multiple instances, which means that providers need to defend hundreds of fortresses at the same time, instead of just one.
Performance
With a true cloud-based ERP, you can be sure your company has a solution designed to handle rapid changes transparently. This means you can quickly expand your system as needed, while easily meeting the needs of a highly mobile and global workforce.
On the other hand, with a "fake cloud" solution, the provider must have the necessary staff and hardware available to manually increase capacity or deploy new features.
Depending on the provider, this can be a problem and may lead to downtime, service delays, and reduced speed.
Integration and customization
A true cloud-based ERP can be easily integrated with other cloud and on-premises solutions.
Learn how Oracle NetSuite banking integration works.
Furthermore, cloud-native solutions provide the flexibility to meet your unique business needs, offering a high level of customization.
In a fake cloud, integration and customization become expensive hassles that can be unstable.
Hosted cloud solutions are not inherently designed for easy integration and can also be expensive to implement and maintain.
NetSuite: a 100% cloud-based ERP solution
If you're looking for a true cloud-based ERP system, you need to know about NetSuite, a complete and 100% cloud-based solution.
NetSuite was developed to simplify mission-critical processes, improving results, strengthening controls, enabling effective management, among many other benefits.
For more information about this solution or to learn how to implement it in your company, contact one of our specialists!
