Why Big Companies Delay Using the Cloud for Some Applications


Many companies have a combination of on premise and cloud based ERPs, but according to the article by The Wall Street Journal, some bigger companies don’t want to make the full jump to the cloud. Some CIO that are hesitant to do it because of the amount of complexity involved in transferring everything to the cloud. Another reason for not moving critical systems to the cloud is because they are fearful of a crash due to a failure by third parties to manage servers or an unreliable internet connection. Which, if this problem persisted long enough, could possibly cause a company to go out of business. However, on the flip side, the article also mentions the benefits of working off the cloud instead of on premise. Saying that some companies prefer the cloud because they are tired of paying for upgrades and custom programming, which in the short run costs them more money than a monthly subscription fee that allows the company to use the saved money elsewhere.

With that said, my question is do you think that companies should switch completely over to the cloud or do you think that switching over to the cloud completely depends on the company? If so, what factors do you think go into that decision? Or do you think companies should have a hybrid system of on premise and cloud ERPs?

One Response to Why Big Companies Delay Using the Cloud for Some Applications

  • Weather a company should use cloud or on-premise ERPs definitely depends on the company. I think many older and larger companies are afraid of using a cloud service for their ERP because then they are putting a lot of their operation risk in one place. If the cloud provider goes down then they would not be able to continue many of their companies functions. In reality the odds of the cloud or on-premise system going down is probably about the same. Both local IT people and the cloud company do not want the business to ever experience down time. The key difference being if an on-premise system goes down they have direct control over getting it back up. When deciding if they should use a cloud or on premise ERP they should consider their size, security needs, the level of expertise they need, current data center architecture, and how much customization of the ERP they require. I am not sure how a hybrid cloud and on-premise ERP would work. I feel like doing this would open up more security risks, as there would be more places someone could possibly get into the system. You would need to set it up so you could seamlessly transfer data between the part stored in the cloud and the part stored on premise. You would basically be paying for all of the upgrades people who are switching to the cloud are trying to avoid while also paying rent to the cloud provider.

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