Tuesday, February 2, 2010

What are The Problems with Cloud-Based computing?

Executives considering adopting an ERP application on the cloud are concerns about some of these things.
There are several problems with cloud-based computing as follows:

1. Functionality – As a general observation, cloud erp is not ready for prime time yet. It is a good option if your functional requirements are limited, you are likely not to change your business requirements AND you plan to use the system for only 2-3 years before evaluating ERP again. It is usually an entry level type of application that is on the cloud with vanilla flavor as is basis. The business model falls apart when you need to customize and/or interface other software products. So vanilla flavor Quickbook, Salesforce, Netsuite and a host of entry level systems is for you?

2. Speed - Dial up access to the internet is not enough. It takes cable, DSL, or business class high-speed internet access to make web-based erp work at acceptable levels of performance. If you have dial-up access, don't even bother. What about your Streamyx broad band in some area like Sri Kenbangan and Subang it is fast enough? And if you are using dial up, don’t even bother.

3. Reliability - Web-based computing relies 100% on the internet being up and running and available. I can assure you, the internet is not always up and running and available. Ask yourself, how many times has your internet access been down this year? If the internet is down - you are down, and most likely your business is down as well. Ouch! The weakest link is its ULTIMATE SINGLE POINT OF FAILURE and you can’t do anything about it. This is a valid concern and there really is no answer other than employing a local on premised solution.

4. Viruses - because of rampant viruses and media attention, many people fear that they might be at a higher risk to contract a virus if they run their operation on a web-based system. There is little basis for this. Yes, viruses are a serious threat. You should be running virus protection software and a firewall device anyway. Theoretically, you are at the same risk level of contracting a virus whether your accounting system is on line or stored locally. The threat of viruses is not a very valid concern in my opinion.

5. Security - Most companies are very concerned about sending their data over the internet. They fear that their data will either be viewed or compromised. The reality is that with 128 bit encryption, sending you data over the internet is as safe as it can be. If you currently keep your data on a file server at the office, the thieves could steal the computer, unauthorized employees might access the system at night, backup tapes could be left in non-secure environments, etc. While nothing in this world is 100% safe, it boils down to managing your systems. Security is not a very valid concern in my opinion.

I have said it often; don’t be too hung-up on technology. Have a reality check. Don’t be clouded by the buzzword that is ringing around in the IT world. Ask the question how does this application help me to solve my inventory control problems, my operational issue? Careware is not against Cloud computing as our principals Sage also has its software available via SaaS for years already in US/Canada and someone is offering Sage Line50 in Ireland as well. This concept has being around for a long time.

Do some checking and you will find that just as fast as new customer signed-up the equal amount of customers sign-off and revert to the traditional model of running their ERP. But the biggest real obstacles for Malaysia and some South East Asia end users are those stated in point 1, 2 and 3.

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