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Why Business has gone to the cloud ?
Companies today are under pressure from the economy; changing technology; changing customer, employee, and partner
expectations; and the need to compete in an increasingly complex connected global economy. To adequately respond to
these pressures, businesses are looking to use technology as the lever for and the underpinning of new, innovative
approaches to business. The cloud is a critical part of that strategy for most businesses and supports other key
technologies like mobility, decision support systems, and collaboration/social systems.
By moving ERP systems to
the cloud, companies can gain
an assortment of
technological and business
benefits. Enterprise IT is
embracing cloud-based ERP
for many reasons, including:
Ease of deployment
Pay for only what you use
Quicker deployments leading to faster time to value and freeing up resources for more strategic initiatives
More flexible and scalable solutions to provide long-term support for growth and expansion
The choice of public, private, or hybrid cloud is a strategic business decision and should be examined closely. There are
benefits, costs, and risks with each model as well as regulatory and compliance issues that vary by industry.
When companies look at the cloud, there are many factors that influence the decision to move all or some of their
applications to the public cloud.
Highlights the top 5 drivers in terms of choice
Platform as a Service
Software as a Service
DIFFERENT Shades of Cloud
Infrastructure as a Service
ERP in the Cloud and the Modern Business
*Software as a Service (SaaS) and cloud-based business application services will grow from $13.4 billion in 2011 to $32.2 billion in 2016, a fiveyear CAGR of 19.1%
*Public and private cloud computing will be strong catalysts of server growth through 2015. IDC reports that $5.2B in worldwide server
revenue was generated in 2011 or 885,000 units sold. IDC is forecasting a $9.4B global market by 2015, resulting in 1.8 million servers sold.
* IDC reports that enterprise cloud application revenues reached $22.9B in 2011 and is projected reach $67.3B by 2016, attaining a CAGR of
24%. IDC also predicts that by 2106, $1 of every $5 will be spent on cloud-based software and infrastructure. Report, Worldwide SaaS and
Cloud Software 2012–2016 Forecast and 2011 Vendor Shares.
SaaS & Open Source ERP
Increasingly in today’s marketplace companies are turning to web-based and SaaS services in which a third party hosts
the application. The underlying software driving the SaaS solution can be either commercial or open source.
Salesforce is an example of a commercial solution that supplies both software and services and supports itself by
charging for software, services, configuration, training, and customizations.
In the case of open-source software, a SaaS solution is only available through service providers who charge for the
providing services that can range from simple hosting to full application support.
SaaS and the Cloud
SaaS ERP and Open Source
Open source is estimated to account for
approximately 1.5% of the total ERP
market. For a long time companies that
wanted ERP could only choose from
among various proprietary commercial
solutions. Recently, however, more open
source ERP solutions have matured.
The three most popular netnew SaaS solutions deployed
are CRM (49%), Enterprise
Content Management (ECM)
(37%) and Digital Content
The three most-replaced onpremise
Supply Chain Management
platforms and social software
suites (34%) and Project &
Portfolio Management (PPM
(33%). The following graphic
shows the full distribution of
Gartner is predicting Infrastructure-as-a-Service (IaaS), cloud management & security devices, and Platform-asa-Service (PaaS) are growing from $7.6B in 2011 to $35.5B in 2016, a CAGR of 36%.
The global Platform-as-a-Service (PaaS) market is growing from $900M in 2011 to $2.9B in 2016, achieving a 26.6%
CAGR. At this projected rate, PaaS will generate an average of $360M a year in revenue between 2011 and 2016.
Gartner projects that the largest segments will be Application Platform Services (aPaaS) which generated 35% of total
PaaS spending in 2011, followed by cloud application lifecycle services (12.5).
In 2011, the worldwide enterprise application software market generated $115.1B in revenue, and is
projected to grow to $157.6B by 2016, attaining a 6.5% CAGR in the forecast period. Gartner reports
that 38% of worldwide enterprise software revenue is from maintenance and technical support; 17% from
subscription payments; and 56% from on-going revenue including new purchases
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