What is CLOUD
A cloud service is a computational system where the end-user pays periodically for the privilege of having access to a service that is hosted remotely. When a hosting provider offers an application as a service, users subscribe to that unmetered service. In many cases, the firm that developed the service hosts the service.
How do CLOUD SOLUTIONS WORK?
A cloud service rarely allows customizations for users – it offers the same functionality to all. In general, the customers have no knowledge of hardware, operating systems, technical stack, application versions, hosting locations for the service they subscribe to.
Customers don’t install, upgrade, patch, maintain the software and they don’t back up the data either. A development organization develops the software, and the hosting provider rolls out that software for customer access. Authorization, authentication, security, availability, performance are all handled by the hosting provider.
Advantages of CLOUD SOLUTIONS
When customers subscribe to the cloud services, there is no capital expenditure (no licensing & associated costs) but only operational expenditure (monthly subscriptions) Cloud Enterprise applications are a huge worldwide market across the customer segments.
Large customers have the resources to evaluate, reorganize, test and subscribe to services. In many cases, simplicity is the key reason that attracts these customers; they concentrate on their core business and IT is handled by someone else (hosting provider). Customization is lost (or way restricted) but the benefits are far greater.
The large customers are migrating their enterprise IT systems to the cloud at a very high speed. Small customers don’t have the resources to license the software and manage their life cycle. Cloud services are faster to adapt, easily scalable and are way low cost compared to licensed software.
It is fair to say, all startups in the US in the last few years have gone completely with cloud models (no software on edge device except Browser, OS & utilities). The cloud adoption rate for startups, small companies is 100%. Mid-market customers haven’t embraced the cloud solutions completely yet – their cost benefits are not great and cloud solutions are risk for them; they are migrating but are cautious in their approach.
What to look for in CLOUD APPLICATIONS
The cloud applications that are hugely successful in the market are those which are designed ground up for the cloud.
They support multi-tenancy.
are customer self-serviceable, can be deployed across multiple platforms without code changes.
architected to allow on-the-fly no service impact upgrades.
allow easy termination.
support multiple levels of security.
The development of these applications requires different management thinking and technical skill sets. The hosting providers (or the operations people) need to run their business super efficiently to be successful – pretty much as ops as no code. Innovation, efficiency and customer focus are key areas of hosting providers. Also, customers prefer to run their businesses on services subscribed from a very few software development firms – the cloud solutions developed by an organization need to be comprehensive for a customer segment.
The roles of the third party integrators for cloud applications are completely different than those integrating the licensed applications.
In the cloud, the integrators on-board the customers, train the staff, develop integration across other cloud or on-premise applications, set-up the batch processes, support the cloud service and act as a liaison to the hosting providers.
Integrators can’t modify the service to suit the specific needs of their customers
Overall, integrators have nominal staff at the customer site and do the rest of the stuff from remote locations.
The application infrastructure supports it very well as the application itself is on the cloud (running remotely).
In the next article, we shall look at how cloud ERP solutions address the challenges faced by manufacturers today