When cloud applications first arrived, it was mainly through small scrappy software companies. Over time, established vendors have responded which means in any software application category you’ll have a good cloud option, making “why not the cloud?” a valid question.
In days gone by, when deciding on business software the question usually came down to Buy or Build – Buy a software package or Build your own system from scratch. As packaged software became more robust, feature rich and flexible then it became the question became “Why not buy?” – and reasons for building became fewer and fewer.
Software is going through a similar phase at the moment, given the choice between cloud applications and on-site applications; the question “Why not cloud?” is a valid one.
On our CRM-Guidebooks site, we ask the intentions of CRM purchasers on cloud versus onsite. Across the survey group of over 800, 27 percent intended to deploy a cloud solution compared to 16 percent on-site and the largest group undecided at 57 percent.
When we look at the data by company size it skews a little more towards cloud, some 36 percent of SMB’s are intending to deploy a cloud solution, with only 14 percent preparing for an on-site system. This 9 percent difference indicates that SMB’s are already asking “Why not the cloud?”
So why has this happened? I think that there are three reasons:
- Benefits of cloud applications
- Application type and integration needs
- Vendor support of Cloud
The primary reason for adopting cloud is flexibility and cost reductions. You don’t need to buy a dedicated server to sit in your office to run applications. This means you don’t need to buy hardware and software, run backups or maintain the systems.
Many of your favourite systems like Hotmail, Gmail, or Dropbox are already cloud applications.
Instead of buying a software licence at a large upfront fee, you buy software on a monthly basis. The inherent flexibility of the application and the licensing model means that initial costs can be low and helps with cash flow.
This was a CRM survey, a relatively simple application – it does not need to ‘touch’ many other systems. It can be a standalone sales or support system, when it does need integration it may be simply to a website or marketing system.
More complex systems like ERP/Accounting will need to ‘touch’ many more systems and have a larger integration need. Our sister site on ERP asks the same question, in this case only 18 percent looked to deploy ERP in the cloud, and 37.5 percent would deploy on-site.
The poster child for business applications in the cloud is Salesforce.com. They are no longer on their own with most vendors now committed to the cloud and making serious business investments.
Microsoft has rolled out its Dynamics CRM as a cloud application, and announced that the ERP packages will soon follow. At the same time Microsoft has released Office 365, a cloud-based version of Word, Excel and PowerPoint. Office 365 is available through Telstra in the Australian market.
SAP which is typically associated with big businesses has rolled out a ‘small business’ package called SAP ByDesign and has recently bought a cloud human resources software business. In response, Oracle has bought a competing HR cloud solution.
When cloud applications first came to market, it was mainly through small scrappy software companies. Over time, the natural advantage of cloud applications has meant that established vendors have had to respond. Today, in virtually any software application category you will have a good cloud option, that makes “Why not the cloud?” a valid question.