As supply chain management emerges as one of the next killer cloud computing applications, a familiar debate is starting to emerge over whether single-tenant private clouds are going to be preferable to multi-tenant cloud environments.
As a provider of a single-tenant supply chain management application that can be deployed in a private cloud, the folks at E2open are making the case that the information in a supply chain is too sensitive to risk being deployed in a multi-tenant environment. What's most significant about that stance is it serves to highlight the tensions between security and collaboration in the cloud. In theory at least, organizations that were sharing the same cloud computing service in the cloud to manage their supply chain might be able to better collaborate.
But Sean Rollings, vice president of product marketing for E2open, notes that supply chains are major competitive differentiators for organizations. As such, many of them would be more comfortable setting up their own supply chain system on top of a single-tenant private cloud platform that they can manage and control directly.
Ultimately, this debate may come down to the size of the companies involved. There's no doubt that many large companies already have a lot invested in on-premise supply chain applications from SAP and Oracle that would make them more inclined to consider private cloud alternatives. But as supply chains become more robust in the cloud, it will be interesting to see in what direction small-to-medium (SMB) organizations move in.
The whole point of being in the cloud is not only to reduce costs, but also to create a more agile business environment. In fact, a recent survey of 374 supply chain professionals conducted by E2open in conjunction with SCM World found that collaborative supply chain environments improve operational metrics, such as inventory days, total landed cost and cash-to-cash cycles by as much as 50 percent. The issue that many organizations have is trying to balance those gains against security and compliance issues that, while largely theoretical, still create concerns.
Of course, it's only a matter of time before the data residing in various instances of cloud computing platforms winds up becoming more federated, which ultimately may render moot the debate over where any particular application is running in the sense that data will need to be secured wherever it happens to be at any given time.
In the meantime, however, IT organizations are going to have to contend with supply chain systems that for better or worse are about to be transformed in the age of the cloud.