On-Premises ERP Versus Cloud Computing: Too Late for the Sky?

August 28, 2009 from AMR Research written by Bruce Richardson– “Early last week, I spent a morning reviewing SEC filings and Seeking Alpha transcripts for the most recent earnings calls from Epicor, QAD, and NetSuite. I wanted to see how well the two on-premises vendors were doing relative to the ERP-in the-Cloud company. A quick note: Most readers think of vendors like NetSuite as a software-as-a-service (SaaS) or on-demand provider, but I’m going to use the cloud nomenclature, since the term is rapidly replacing the other descriptions in vendor presentations...

Since the start of economic downturn last September, on-premises vendors have been harder hit than their cloud brethren. This is especially true for ERP providers…”

180 View – Bruce Richardson provides useful insights as he follows the money to see how the ERP vendors are doing. He is also in direct contact with the executives of the leading enterprise vendors.

Bruce and the vendors appear to be pushing the cloud vs SaaS terminology. I only recently switched from calling it ASP (Application Service Provider) to SaaS although I thought ASP made more sense. I also prefer SaaS over cloud.

It does make some sense that it is easier for organizations to invest in SaaS as they don’t need to finance the full license and infrastructure cost. However, it may not make as much sense when using an NPV (Net Present Value) approach to cash flow over 10 years.