Cloud computing

ERP on cloud getting closer to reality

Send payroll processing to cloud and keep all mission critical applications on premise.’  This line of thought, popular with packaged software vendors, is coming in for a slow challenge.

Even ERP vendors, arguably the most sticky on-premise firms, have begun to move towards the cloud. They are under pressure to shed fat and become nimble, and cloud offers them a way to transform.

Starting from May 2010 Lawson Enterprise Management Systems and Lawson Talent Management suite will be available as solutions hosted by Amazon Elastic Compute Cloud (Amazon EC2) infrastructure.

Lawson software says its External Cloud Services are targeted at midsize companies seeking affordable and agile deployment of enterprise software. What makes this possible, according to Lawson, is Amazon EC2’s secure, reliable, massive yet affordable infrastructure.

Lawson External Cloud Services can automate the provisioning of additional software instances. A subscription pricing option is also available for customers who choose to run Lawson External Cloud Services offerings on AWS.

Jeff Comport, Lawson senior vice president of product management, says “This should be great news for CFOs and CIOs who worry about lengthy and complex on-premise installations, the cost and inefficiency of their data centers, the best way to allocate IT staff, and the complexity and difficulty of maintaining software versions and upgrades.”

 A few days ahead of Lawson’s announcement, open source ERP vendor Compiere put its on-premise enterprise software on Amazon's EC2. It assured customers, who are wary of running ERP from cloud, that they would not be sharing a hosted instance and database with other customers, but get their own private and secure instance of software. ERP may be moving to cloud, but multi-tenancy still sounds futuristic.

 The compromise could well make cloud-based ERP more appealing for customers. ERP becomes easier to consume as cloud eliminates the need for datacenters and large teams. 

Analysts have voted in favour of running ERP from cloud. Commenting on Compiere-Amazon pairing AMR Research analyst Bruce Richardson says ‘…the two are completely changing the cost structure of deploying ERP.’

An enterprise can subscribe to Compiere Cloud Edition for $795 per month and rent Amazon capacity for as little as $2,000 per year. As he points out, this translates into about $10,000 for 10 users and $80,000 for 100 users.

Arun Mysore

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