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The Cloud

Cloud, hosted or on-premise? This choice still exists, but for ordinary medium-sized companies it is now no longer a choice, whether the ERP system is Dynamics 365 Business Central or something else.

Quite fundamentally, companies are choosing IT solutions in the cloud in order to be ‘connected’ and change-ready. It’s a matter of keeping all options open, because you don’t know what customers will do or want tomorrow.

It is a kind of non-strategy, because you don’t choose your own direction. To be quite honest, many people have no possibility at all of choosing the company’s direction for themselves, because the market is evolving so rapidly. You cannot decide for yourself whether your product and your industry will suddenly be caught up in a wave of digitization (or disruption).

Should you pretend to yourself, then, that you are pursuing a long-term IT strategy? Or should you make sure that you are change-ready, agile and able to react quickly to changed market conditions and consumer trends?

You should start by recognizing that, as a business manager, you yourself cannot tell what the ERP system will need to be capable of a month or a year from now.

Business leaders must trust the ERP producers (such as Microsoft) to lead you in the best possible direction. You must choose the supplier for your company that you trust the most to be change-ready, support your changing needs, and keep up with developments in your industry.

You do not have to select a solution once and for all. It is OK to select a small solution that can meet your needs here and now. You no not need to be covered for the future, because you cannot foresee it anyway. But you should ensure that the system prepares you for change, transformation and collaboration when the future hits you and your needs and options change.

This is precisely what cloud solutions offer: readiness. And that is why many companies are opting to locate their solutions in the cloud.

Definition
Let’s define what to understand by these three concepts:

On-premise: an ERP system running on a server located at the company itself, with hardware and servers maintained by the company.
Hosted: an ERP system running at a hosting centre, perhaps on a server dedicated to your application. Licence and hosting may possibly be purchased separately.
Cloud: an ERP system running in a data centre, where you have user access to a shared installation. It is not your own application on your own server, and you purchase the software ‘as a service’ (SaaS).

The arrow is very much pointing towards the cloud. That is the way all ERP producers would like their customers to go, and it is the option that offers customers most flexibility. This is now the norm within Microsoft Dynamics.

Security

Of course, there are still companies that need to have their server in the basement on-site in view of their internal security policy.

Most people, though, think it is safer to let Microsoft (or another hosting centre) handle security than to take care of everything themselves. Properly securing your own on-premise solution against attack is in fact a very onerous business.

Although your solution is running at Microsoft, if your company’s internal policies do not allow data to be held by a large corporation or an American-owned company, though, you will of course have to bring everything in-house. The issue probably depends mainly on what you see as the biggest threat and what your internal policies dictate.

Subscription

In recent years, the market has moved an incredibly long way towards hosted and subscription based software. Most companies are choosing hosted or cloud solutions, because it is easier, security is taken care of by others and it goes hand in hand with a subscription model.

The new ERP solutions are now subscriptions, too. You can no longer purchase a licence to have and to hold in perpetuity.

However, there are many IT decision-makers who feel tied (cheated) by subscription plans.

After all, you can’t cancel an ERP subscription just like that. Sure, you can easily cancel the subscription itself, but you can’t just change ERP systems, so the decision to take out an ERP subscription is just as much of a commitment as if you had forked out a huge amount up front for a licence.

There is greater complexity in an ERP system than in other things you buy on subscription, and this is where the challenge arises.

Why do you have to pay every month to have access to the same solution? What do you get for your money?

Microsoft would answer that you get updates and new functionality on an ongoing basis. But how much do you get? There is no answer to that, because of course it depends on what Microsoft comes up with in the future. You have to trust that they will develop something good and move in the right direction (and not impose swingeing price rises) – and of course this is impossible to assess in advance. This is a justified concern.

You have to submit and trust the ERP producer to lead you in the best possible direction. You must choose the producer you find it easiest to trust.

That said, companies see only the tip of the cloud iceberg. There are an incredible number of services that modern consumers expect to be included in a subscription. You don’t give it a thought ordinarily – the solution just runs, after all – but your subscription charge goes to cover a great many services in the cloud.

The solution has to be operated, of course, but the cloud supplier also has to keep the data centre constantly updated and secured against external threats. All these services go on behind the scenes nowadays, and they are easily forgotten when you look at what you get for your money.

Many of the IT department’s functions are also being taken over by the cloud provider. Something as simple as user administration: it used to be something the IT department took care of; nowadays, you type into an interface, and then a whole lot of things happen in the cloud.

You might say that expenditure on the IT department has moved into the cloud and become part of your cloud solution subscription fee.

Subscription plans tie you just as much as a big licence purchase used to, but you certainly don’t get cheated.

Performance

Performance is another topic that often comes up in discussions about the choice between cloud and on-premise.

On your own server, of course, you control performance. If the solution is running too slowly, you can add more horsepower – but, if seasonal loads are involved, it is difficult to raise capacity and lower it again later.

With a cloud solution, you are in the supplier’s hands. You may have the option of buying different performance levels. Cloud solutions are located in big data centres that do have the option of scaling up and down according to the load, and peak loads are much easier to manage.

It is rare for someone to complain about the performance of an on-premise solution, because they are of course well aware that it is their own server that isn’t fast enough. It is more natural to complain about the performance of a cloud solution, because you feel that you are at somebody else’s mercy.

Sometimes, poor cloud performance is down to too little capacity having been purchased.

However, by far the most performance problems with Dynamics solutions in hosted and cloud environments are due to badly set-up or poorly maintained software – not the environment.

If the database is not set up correctly, if there are memory leaks or if something is getting full up and causing bottlenecks, it will affect performance – and this can happen both in the cloud and on-premise.

Examples of poor set-up might be a company with a big BI solution in place to read accounting data directly in real time, or one that has activated a full change log to record all transactions in the system down to the tiniest detail. Both of these can demand a great deal of processor capacity.

Cloud solutions generally have no performance problems, but you should take note of how much capacity you are buying and how your installation needs to be set up and maintained in order to optimize performance – whether you are opting for cloud-based or on-premise.

Availability

The Business Central solution, along with the entire Dynamics 365 platform is available for businesses in a range of countries and regions. You can subscribe through partners offering consulting services for the Microsoft platform in your region. You may see the availability country by country here.

Business Central is currently available in the following countries, with localization done by Microsoft: Australia, Austria, Belgium, Canada, Czechia, Denmark, Faroe Islands, Finland, France, Germany, Greenland, Iceland, India, Italy, Mexico, Netherlands, New Zealand, Norway, Russia (on-premises only), Spain, Sweden, Switzerland, United Kingdom, and United States.

And in the following countries with localization done by a partner: Albania, Algeria, Angola, Argentina, Bahrain, Bangladesh, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Chile, Colombia, Costa Rica, Croatia, Cyprus, Dominican Republic, Ecuador, Egypt, El Salvador, Estonia, Georgia, Greece, Guatemala, Honduras, Hong Kong SAR, Hungary, Indonesia, Ireland, Israel (English), Jamaica, Japan, Jordan, Kenya, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Malaysia, Maldives, Malta, Mauritius, Monaco, Mongolia, Montenegro, Morocco, Nicaragua, Nigeria, North Macedonia, Oman, Pakistan, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Puerto Rico, Qatar, Romania, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, South Korea, Sri Lanka, Taiwan, Thailand, Trinidad and Tobago, Tunisia, Türkiye, Ukraine, United Arab Emirates, Uruguay, Vietnam, and Zimbabwe.

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