When approaching the subject of the Cloud, there is the choice between being strongly positive or enthusiastic. The wave in favor of the Cloud is so strong that views which attempt to even mildly address the need or even the relevance of the Cloud could make you look like a supporter of the past. But this has always been true with new technologies or business models – just look back to the early 2000s.
Cloud technology is not a revolution; it’s an evolution that materializes the maturity of the Internet. By definition the evolution will take time – a long time – when in contrast a revolution could change our world in weeks or months. As customers and suppliers, it has already taken us 15 years to get to where we are today with the Internet, and I would bet it will take even longer before everything runs from the Cloud.
The Cloud, in my opinion, brings many good things to the software industry. It means solutions can be developed more quickly, agile development becomes standard and seamless upgrades become a given. Software vendors are changing and the Cloud is the trigger but the change is embraced because it creates value for customers.
On a similar note, the Cloud implies a different business model that is based on usage. The ‘per month, per user’ pricing model is the first step that will evolve into fully consumption-based pricing. Once again, it’s good for our customers. The Cloud will also open the ERP world to many more users than today. Because it’s more flexible and web based, we can expect that the Cloud will provide much easier access to an ERP system. C-level executives will, at last, benefit from the mine of data that is created by their ERP system. This is particularly true in mid-sized companies today where the CEO is in the operational driving seat, yet is basically driving with his eyes closed! Casual users will also be more at ease and will be able to contribute more. This is true for occasional internal users but also for external users like partners, suppliers or customers. The 25-year-old concept of an extended enterprise now becomes a reality.
All these changes can bring great value to our customers and it’s important that we aim to deliver on these promises. The Cloud is not the means to get there but only the trigger. It has changed mindsets and offers a technical solution but we can deliver the very same value to our customers via other delivery mechanisms. If I look at the ERP world for instance, there are many examples of strong adoption of financials in the Cloud when manufacturing, which requires significant customization and close connection to shop floor control systems, looks less attractive. Does it mean that our customers should be cast to the side of the road? Today a vast majority of mid-sized companies do use their ERP systems on fat clients without web access, when such systems have been available for over ten years now. Why should we expect that adoption of full Cloud solutions will be that much faster? And does this mean that our customers shouldn’t have access to the benefits listed above?
Adoption of the Cloud is a long journey. Cloud will become a standard in one or two decades. What do we do for our customers in the meantime?
My conviction is that although the Cloud will not dominate for some time in the ERP space, it will profoundly change mindsets and drive software vendors in a new direction. Having offered web-based products like Sage ERP X3 for over ten years, Sage is not afraid of this evolution. On the contrary, we welcome this change towards flexibility and openness. This has always been our motto. Building hybrid systems and leveraging the best of the on-premise and Cloud worlds will help the transition, drive adoption and create true value for our customers. Our customers are pragmatic so we have to be inventive.
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