| |December 20169CIOReviewwere inherently at greater risk than on-site deployments - especially if they were housed in multitenant public cloud setups where a single instance of application code serves many customers.Those areas of cloud's perceived weakness are now seen as strengths. For example, with on-site IT infrastructures, security degrades over time as upgrades are skipped and new software with additional risks is integrated. With cloud-based ERP, the latest security updates are always deployed, and it's easier to maintain the integration points to keep up with security for apps outside the core system.While IT teams might get attached to systems they know, they hate the constant update/upgrade cycles, the database maintenance, the training requirements and the customization needed to keep them running. For example, Oracle customer HSBC opted to move to the cloud when it was looking at an 18-to-20-month upgrade project for its on-premises ERP deployment. In contrast to a year-and-a-half upgrade, the cloud migration took about six months.Vendor strategies and customer optionsCloud ERP vendors generally fall into one of two categories: Cloud natives, such as Workday and NetSuite, whose systems were developed for the cloud from the start, and traditional ERP vendors like Oracle, SAP, Infor and Microsoft, which have developed cloud offerings and whose products offer continuity and familiarity to their existing on-premises customers and appeal to new users who want to deploy in the cloud. SAP has hedged its bets by acquiring cloud ERP natives SuccessFactors and Ariba, and Oracle has announced plans to buy NetSuite for USD 9.3 billion.A key difference between cloud natives and traditional vendors is in the infrastructure used to support and deliver the services. Cloud na-tives rely on third-party cloud infra-structure providers such as Amazon Web Services (AWS) or Microsoft. Traditional vendors mostly develop their own cloud infrastructures; the exception is Infor, which partnered with AWS.Enabling the businessThe deciding factor for companies evaluating cloud-based ERP systems boils down to the value added and practical considerations like cost, ease of implementation, level of support and issues related to legacy systems. Summary: More companies are likely to take cloud-first or even cloud-only approaches to ERP as the cloud become the dominant means of deploying enterprise software. In fact, businesses may find themselves without a choice in the near future. ERP vendors are pursuing their own versions of cloud-first strategies and are pouring resources into developing their cloud-based ERP offerings. Gartner predicts that 30 percent of the 100 largest software vendors will shift to cloud-only models by 2019. Companies that don't embrace the cloud may find themselves with limited options - and at a competitive disadvantage.
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