Public vs Private Cloud ERP: What You Need to Know

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Private vs Public cloud ERP software

If you’re evaluating cloud-based ERP software to leverage the many benefits of cloud ERP, one thing to keep in mind is that there is more than one type of cloud, which provides different capabilities based on your business needs. The main types of cloud computing include the public cloud and the private cloud. Then there is also the hybrid cloud, which like the name suggests is a combination of the two. This post will help you make sense of the different types and help you decide which one is right for your company.  

What is public cloud ERP?

Public cloud is a computing model where all the resources used to run the infrastructure are owned, operated, and managed by a third-party cloud provider. This type is typically known as SaaS ERP or software-as-a-service and means that the infrastructure is being shared by multiple users. However, while each company uses the same software and is hosted on the same servers, your company’s data is yours alone and remains inaccessible to others. This is a popular cloud ERP model and when people refer to ‘true cloud ERP’, this is what they mean. You access the ERP software through a web browser.  

The shared resources make this type of cloud computing very cost-effective and uses the pay-as-you-go model, where you only pay for the services you need. It also offers on demand scalability and no maintenance, as that is handled by the provider. As cloud providers must commit to Service Level Agreements, this type of cloud ERP is also very reliable, as they must legally guarantee a monthly uptime percentage as well as meet compliance standards.  

What is private cloud ERP?

Private cloud ERP solutions are typically owned and used by a single company. This means a single version of the ERP software and associated infrastructure only serves one company. They can either be physically located onsite in the organization's data centers (an internal private cloud) or hosted by a third-party provider (external private cloud). This model offers strong visibility and complete control over the infrastructure, which is often preferred by highly regulated industries or government agencies. With complete control, you can enforce high levels of compliance rules that your industry may require.  

One thing to keep in mind is that a private cloud is an expensive solution and has a much higher total cost of ownership compared to the other cloud ERP types. It may also have limitations in scalability, especially if the data center is limited to on-premises computing resources.  

What is a hybrid cloud?

As the name suggests, a hybrid cloud is a hybrid ERP approach which is a combination of the private and public cloud elements. It typically is a combination of on-premises software with private or public cloud for services, storage, and computing. This type of cloud ERP offers advantages such as different deployment options, more control over compliance, and flexibility.  

Which cloud model is right for you?

Deciding which cloud ERP model is right for your organization depends on what your business needs and priorities are. Considering factors such as performance, scalability, control over infrastructure and costs, including the total cost of ownership, will help you decide which model best suits your needs. You can also grab a copy of our free resource for more relevant information around this topic: “Hosting Data in the Cloud vs On-Premises: Which Is Better?” 

Kwixand Solutions can help!

If you have future questions or require help with your cloud migration, Kwixand Solutions can help. We are an ERP consultancy and Microsoft Partner based in Vancouver, Canada, and we help companies across US and Canada to digitally transform, optimize processes, and achieve their business goals. 

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