What is a Cloud ERP Software?

Cloud-based computing lets users access software applications operating on a shared computing resource. Examples of this are processing power, disk storage, and memory via the Internet. This kind of computing resource is maintained in remote data centers and is dedicated to hosting various multiple platforms and applications.

Cloud ERP

Cloud ERP refers to the software as a Service that provides users with access to ERP or Enterprise Resource Planning software on the Internet. It has generally reduced upfront costs due to the leased computer resources by the month than purchased and maintained outright on-premises. Also, cloud ERP provides companies with convenient access to business-critical applications regardless of time and day.

The only technical difference between an on-premise ERP and Cloud ERP is the place of software. Given that, below are some of the key advantages and characteristics of Cloud ERP Software.

The small and mid-sized businesses are the main focus of the Cloud. This is because of Cloud’s capability to give access to full-function applications at a fair price and without a software or hardware substantial upfront expenditure. After all, choosing and using the compatible cloud provider can make the company scale the business productivity software rapidly as it grows or if there is a new additional company.

Cloud piggy bank

Benefits of Cloud Computing

1. Reduced Costs

Cloud computing has helped to avoid upfront costs for the infrastructures such as data servers and hardware. It reduced the support services of IT since it is provided by the data center. It also eliminated the upfront payment for application software licenses as favored for a monthly fee. Another thing, cloud computing helped to shrink costs of supporting and maintaining applications after the updates and upgrades were given in the hands of a cloud vendor.

2. Cost-Saving

Cloud computing helped go beyond cost-saving, which includes:

  • Needed computing resources are the only paid services.

  • There is a fixed monthly rate to enable the companies to use cash on different business initiatives.

  • Since the data is stored in the Cloud and not locally, it helped the company server be safe from malicious attacks.

  • There must be fluctuation in the storage and computing of the company due to adjustment in the ability and amount of cloud service.

  • Cloud ERP applications must be taken advantage of since the installation of software and hardware on users and servers is not required.

  • The data confidence is enjoyed after being backed up, as well as there is a prepared disaster recovery plan.

  • It makes it easier for companies to access systems anywhere to geographically expand since everywhere, the Internet is found. Also, remote locations are no longer needed to be implemented with software and hardware.

Cloud computing

3. Clarifying the confusion from Buzzwords surrounding the Cloud

When Cloud computing is the topic, cloud buzzwords often enter the process and conversation that leads to confusion or misunderstandings. Given that, here is a brief discussion about it. Let’s take a look at the common terms.

Licensing Options: Subscription or Purchase

  • Subscription: Here, the company needs to pay a monthly or annual charge to be used as a software license. The subscription price usually includes software upgrades.

  • Purchase: This is also called Perpetual, and it refers to when there is buying of a software license done by the company. Then, the company now owns the license wherein it needs to pay for annual maintenance fees for certain upgrades.

Options for Deployment: Hosted, On-Premises, or SaaS

  • Hosted: The hosting provider or company buys the license for the software. Then, it is managed by the hosting provider, if not all, of the software deployment and infrastructure, as described previously. There can be an independent company for the hosting provider or, if not, a division of it. Outsourcing IT operations can be done by hosting.

  • On-Premises: This is also called In House, wherein the company is put into responsibility for the infrastructure, including communication hardware, system software, hardware, software on user devices, and other else. Also, it includes the application software’s deployment, such as support, implementation, upgrading, and other else.

  • Software as a Service (SaaS): This is the method of deployment wherein the combination of a delivery model and software licensing takes place. The software is licensed based on a subscription and is hosted by the provider of software. These are all for a single price or typically a fixed amount. To do hosting, the Public Cloud is used by a software provider.

Public Cloud and Private Cloud

  • Public Cloud: This is owned by service companies such as IBM, Amazon, or Microsoft. The provided services are all load balancing, hardware, backup, and security.

  • Private Cloud: This is maintained and owned by a hosting provider or a company. This is the only option, sometimes based on regulations or business requirements.

  • Hybrid Cloud: This is the blended approach having a mix of private cloud, public cloud services, on-premises, and third-party.

Single Tenancy and Multi-Tenancy

  • Single Tenancy: This is where each customer is provided with their database and application.

  • Multi-Tenancy: This is where the provider of Cloud software has a single version of software on a server and simultaneously serves multiple tenants or customers.

Cost savings are strongly believed that multi-tenancy reduces software provider’s cost, which is absolutely for cloud apps. These apps are quickly downloaded and purchased like Facebook, Pandora, and other else.

The cost savings for Cloud ERP are insignificant once compared to providing the operating system, database, and server hardware, sales and marketing required, development of sophisticated ERP programs, and on-going support. Also, there is reduced flexibility when sharing programs with others happen. The result can be lost control over upgrading schedules and customization and tailoring.

Web Services and Thin Client

  • Web Services: These are the application components designed and used for the web. The usual examples are applications installed on a mobile phone, like a weather app. On the other hand, business applications include sales tax calculation, zip code lookup, and other sophisticated applications.

  • Thin Client: This refers to any device such as phone, tablet, or PC in cloud terms that do not require communication or application software to be downloaded. Here, the thin clients are provided with access to applications anytime and anywhere, the same to a web page.


You should adopt cloud ERP yesterday.  It’s a must do, given the benefits.


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