The software-as-a-service market has ballooned in recent years, luring start-up providers with a lower cost of entry and challenging titans of the on-premises world to rethink their product roadmaps.
But pure SaaS is not the last word in cloud-based software. Many gradations exist between that option and traditional on-premises deployment. Pure SaaS thrives on multi-tenancy. Under this model, all customers access, via an Internet connection, the same instance of a software product, with some basic customization allowed at the user level. NetSuite is a good example of a SaaS ERP vendor. But the ERP world is still primarily composed of providers in the mold of SAP and Oracle, whose ERP products fall somewhere between SaaS and traditional deployments, including hosted models that take the application management burden out of the customer’s data center, but still deliver private instances of the software to individual companies.
As all manufacturers know, ERP systems dig their hooks into a company. Executives shudder at the prospect of ripping and replacing a full business software suite. So what if a company wants to move its ERP suite into the cloud so that it pays only for the servers it uses?
It’s mostly uncharted terrain, experts say, and one of the biggest question marks involves the software licensing. Since many traditional ERP deployments are billed by the number of servers needed to run the application, hosting that application in the cloud and varying its server support based on usage patterns makes application billing a challenge.