Where SaaS ERP will fail

ERP applications delivered as a SaaS (software as a service) will struggle against on-premise products while the danger of a service interruption is still regarded as likely.

The major cloud computing services (Amazon, Google) have recently had problems, preventing people from using their applications. It isn’t too serious when those applications are word processing and email, but try saying that to a financial director whose company’s business relies on the ERP transactions going through.

Two other recent articles (Nick Carr, Business Week) make the same point, and go into more detail.


5 thoughts on “Where SaaS ERP will fail

  1. The point is well taken. However the question remains… Is Amazon et al more reliable than in in-house architecture or not? And can they recover more quickly than an in-house (or even outsourced) IT Infrastructure department? I’ve lived through 40+ hour outages at large companies that took out core or critical to operations. That’s the real comparison, I think.

  2. It may a developed vs. developing world issue. The telco infrastructure and responsiveness in S.Africa doesn’t have a good reputation, except perhaps the mobile operators. A CEO here would probably place greater trust in the in-house infrastructure and skills.

  3. SaaS is obviously referred for only a Software Product (you said rightly – shrink-wrapped in a CD) being given as a service.

    There is no Rocket science in SaaS. To make it simpler, instead constructing 1 Villa or Bungalow in 1000 SQ. Yard area it is like constructing 30 – 50 Apartments with no customization.

    The very purpose of SaaS is to:

    1. Bring per user usage cost down (drastically down).
    2. This can only be achieved by deploying a standard software product in a common IT infrastructure. (World class datacenter, no maintenance by the users, uptime 24X7, complete security)
    3. Being used by 100s, 1000s and millions of users at the same time. (Like in E-mails Yahoo Mail, GMail,Hotmail, Rediffmail etc., and in CRM SugarCRM, Salesforce.com, Sales babu)
    4. No on-site Training and Implementation support.

    Unfortunately, when it comes to ERP, most of the ERPs even though the vendors claim, it is not available in this model. Because all the big ticket ERPs were built like Villas and Bungalows. So it can not be replicated in SaaS model. Software application deployed through virtualization can not be considered as SaaS, because of support and upgrades to be done individually.

    Here is the ERP product Syscon Cronus from Syscon Solutions (12 year-young), truly offered in SaaS model for discrete manufacturing companies at Rs.2300/- or USD 58/- (per user per month).


    S Vijay Venkatesh

  4. Your concernt is correct, but there are lot of advantages of using SAAS application. I have been using SalesBabu CRM for past 2 years and have no issue for maintaining the hardware or software or intalling updates and patched like in regular premise enterprise s/w. There is no capital investment with SalesBabu on demand CRM and we upgrade to more users as we increase our sales people. I am satisfied and have saved lot.

  5. Pingback: My top posts « The Manticore blog

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