Some ERP software vendors are completely cloud-based and only offer their applications over the web. While they were, at one time, rivals to Microsoft's traditional on-premise software model, Microsoft now offers cloud solutions as well. The main difference is that Microsoft still maintains on-premise options. In many cases, they encourage customers to operate in a hybrid environment, with both cloud and on-premise software. Microsoft Dynamics GP, for example, is an on-premise solution that has the capability of connecting and integrating with cloud applications.
The primary benefit of the public cloud is that businesses with little or no network infrastructure and IT staff can still have fully functioning business software solutions that their employees can access from the Web anywhere they happen to be.
A private cloud essentially uses the same tools and technology as public cloud computing but operates from within local data centers. While "cloud computing" that refers to the public cloud is a technological term, "private cloud" is a marketing term, and businesses should understand that before choosing one over the other.
The benefit of the public cloud is mostly economical. You can potentially save money, time, and physical space by using the hardware, infrastructure, and software of a third-party provider. The benefit of the private cloud is that you can use the same tools and software within your own datacenter, under your own control.
Microsoft will soon start offering Windows Azure Platform appliances that provide all of the benefits of a public cloud shipped to you in a datacenter storage container. Customers will have the flexibility to use prepackaged software and also develop their own applications using the development tools that come with the platform.
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