True Cloud ERP vs. "Fake” Cloud ERP: Know the Difference (or Pay the Price)

There is the cloud, and then there is the true cloud. With cloud technology becoming more prominent in various industries, knowing the difference is crucial.

Some hosted services have been labeled as "cloud," yet are actually private cloud solutions. These are growing in number and confuse unknowing businesses that are looking for genuine cloud solutions for their business.

They are 'fake’ cloud solutions that are far more limited in benefitting your business than true cloud ERPs. Learn how to spot the differences between a true cloud ERP and a fake one so you can drive your decision-making with confidence.

What is a true cloud ERP?

A true cloud ERP is designed from the outset as a cloud solution. The operation running the service is geared around providing a cloud-run solution, with experts trained in hosting and managing software. The ERP vendor hosts the software across hundreds of servers in multi-tenanted environments, enabling the management of data redundancy and the ability to adequately supply many thousands or millions of customers.

In contrast, ‘fake’ cloud ERPs are not true software-as-a-service (SaaS) solutions. Technically speaking, they are one of the 3 types mentioned below:

1. Private cloud - A cloud computing environment in which all hardware and software resources are dedicated exclusively to, and accessible only by, a single customer.
2. Hybrid cloud - A mixed computing environment where applications are run using a combination of computing, storage, and services in different environments
3. Hosted cloud services - Services that make applications and websites available on the internet using the cloud with infrastructure outside the customer’s location

While it's true that the application is delivered to the client via the cloud, it is merely single-tenant software, which is version-locked and not as flexible or scalable as the true cloud.

To make it easier to remember the distinction between true cloud ERPs from fake ones, try to think of onions and potatoes. Suppose that a significant aspect of your business involves managing massive bulks of files that you want to manage with a cloud solution.

Here’s how that would play out:

• True cloud solutions, such as NetSuite, enable you to manage your files seamlessly by splitting them into smaller layers like an onion. It provides only the information that you need on-demand as you use the solution, allowing you to have quick, consistent access to your data.
• Fake cloud solutions retain your files as is. Thus, when you try to access your data, you always receive them in their pure, uncut form (like a potato). In addition, fake cloud solutions are designed to run on high network speeds that are primarily found on local area networks (LANs), often in offices. However, internet speeds are typically slower outside of LANs. Altogether, your organization will always spend a lot of time when trying to access certain data because of slow internet speeds. Besides, you’ll also deal with large portions of unnecessary data.

Why use a true cloud ERP?

There are many advantages to using a true cloud ERP system that impact all areas of your organization. Here are a few benefits you need to know:

Seamless and discreet upgrades

The nature of true cloud ERP is that it is multi-tenancy. This means each customer accesses the same software application and its services. Hence, when it comes to upgrades, it is this software – the core solution – that is upgraded, not the customers' own ERP software.

An upgrade to the system means that every customer is always using the most recent version of the ERP software. Upgrades are often done at night and, in the background, so there is no need to pause business processes while the software is being improved. With NetSuite ERP, for example, upgrades are scheduled in advance, and the user is pre-notified about changes and maintenance schedules. This makes it easier for users to plan their work better.

So, when new functionality is rolled out, the customer has immediate access to the latest changes. There are no hitches like downtime or unavailable services.

With the fake cloud, while the software originator may have provided an update, it is down to the vendor to supply that to its customers. This often means being at the mercy of the vendor's timeline for rolling out updates for each of their customers, which can be in conflict with your organization’s timeline.

Complete customization

Even though all users access the same platform, a true cloud ERP solution like NetSuite allows clients to customize their own copies of it. Equally, these customizations will continue to work the same way any time an upgrade is made.

Customizations are configured on a central platform for that particular client, so there is no locally-held software or application. Customizations allow a business to tailor the software to their business processes, improve their productivity, and gain better insights from their data. These modifications can easily be done in-house or with the help of an implementation partner.

Security, uptime, and disaster recovery

Organizations need to keep their data secure. With NetSuite, for instance, although each customer is using the same software, the system is configured in 'layers' so customers can only access their own data based on editing/viewing rights, which are pre-approved by their organization.

Additionally, NetSuite operates rigorous 24/7 monitoring tools and has controls and policies in place that ensure robust security for customers. In addition, NetSuite also has backup processes in place to protect customer data.

For providers of true cloud applications, their uptime levels are their priority. And for ERP applications, how well customers can continue to run their businesses depends on this uptime performance. Companies like Oracle offer contractual uptime guarantees, assuring their customers that they can operate without interruption.

With true cloud, data management is a key consideration. For disaster recovery and risk management, companies need to employ strict backup and recovery processes. With NetSuite, this is all done centrally. NetSuite has strong data management processes and infrastructure that give companies complete peace of mind. All data is entirely replicated, backed up, and available whenever needed.

Discover the real benefits of the true cloud

True cloud ERPs are the key to successful large-scale data management and security for the long term. Knowing how to identify true cloud ERPs from fake ones allows you to avoid costly mistakes that can set your business back significantly.

If you’re in the hunt for a true cloud ERP, look no further than Oracle NetSuite. It is a tried-and-true ERP system that has serviced numerous companies across various industries.

Implementing NetSuite requires expertise not only in this system but also industry-specific knowledge that enables in-depth utilization of NetSuite in numerous business processes. At Softype, we strive to be the go-to business partner of every company and organization by making NetSuite implementation a breeze.

Contact us to start now!