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Cloud ERP Best Practice: Forced Upgrades vs. Flexible Upgrades

Posted by Michael MacDonald

Feb 10, 2015

474510529There is no doubt that Cloud ERP is taking off and becoming more common place than ever before for the emergent business as well as the established enterprise. This movement has forced several technology providers to rush into adapting to these demands, and as we all know, the inevitable short-cut is taken. Today we'll walk you through the short-cut of forced upgrades vs. allowing you, the customer the flexibility of when, why and what to upgrade.

Upgrading your software and technology is without a doubt a very important aspect of staying competitive and impacts your overall productivity and growth. Before the concept of Cloud, the process of upgrading required your productivity to slow, and in some cases halt altogether so you could test and train on the new version.

The question is begged, “Why is that still the case?" The reasons are not that much of a mystery, and most of them lay in the root of your provider not being able to break old habits, and or having designed their Cloud offering in a more economical fashion (saving money for them, not you). Here are the top 3 reasons:

1.  Your provider is only hosting your application, and it’s not a true cloud subscription offering.

Many providers have merely forged a partnership with a hosting partner, leased some space in their data center so they could deploy your application license in that remote environment. This technically is “Cloud ERP”, but when the application management tools are missing for the provider (a.k.a. Managed Services Capability) then the ability to properly manage your application (including performing upgrades) is greatly compromised, inefficient, support is usually lacking and YOU end up paying additional for it. This is not a real Cloud ERP Subscription.

2.  Your provider only offers a “Multi-tenant” environment.

When talking about “Cloud”, there are essentially (3) different types of cloud environments,

  1. Multi-Tenant: Your application(s) are shared by multiple tenants, and there may also be shared databases, but your company’s data and application environment is set up for your specific needs/ data.

  2. Dedicated: You have your own application resources, and sometimes your own server environment where none of the resources are shared.

  3. Hybrid: Essentially a combination of the above where some resources are shared and others are not, and the ones that are not could be in the same cloud environment but exclusive to your company, or the unshared resources could be deployed on premise, but integrate with the cloud resources.

When you have a multi-tenant environment you can’t upgrade one user/ company, without upgrading all the rest. It’s not so much the provider doesn’t want to, it’s more inherent to the design prohibiting it.

This means that upgrades are forced upon you, and you must be ready to test, and train on the features and other intricacies of the new version. Whether you’re ready to or not, or if you will truly benefit from them or not. Upgrades don’t always mean “better” for everyone. NetSuite is a common example of a provider that offers a multi-tenant environment and forced upgrades. NetSuite pricing includes these upgrades which is good, but the flexibility and control the Customer has is lost. If you’re business is seasonal, operates lean, or you’d simply rather reserve the control and flexibility, the hybrid or dedicated cloud model is best

3.  It costs your provider too much time to set up and manage.

Another common reason Cloud ERP providers force upgrades and don’t take the time to develop and structure a more flexible way is simply because it costs more, and takes more time to set up and manage. However, once the initial heavy lifting is done on the front end, it pays off for both the customer and the provider.

Not to say that all Cloud ERP providers are “stingy”. The main reason may be that the “Cloud Movement” drove many software services companies and product companies to rush in and hastily go to market with a cloud offering. How they’d adequately manage and support their Cloud customers was over-looked, and those customers and providers are starting to feel the pain manifest through poor reviews.

In conclusion, if you're in this boat today or thinking about moving to the Cloud, make sure you spend time evaluating how your provider manages and supports the environment your business critical data will be stored, and applications will be hosted. This  includes how upgrades are managed, data is backed up, and align that with your own business to gauge the potential impact.

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Topics: cloud ERP