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State of Cloud ERP: Small but Growing

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The State of Vertical Industry ERP

Looking at how ERP fits today's business.

Back in December I wrote a post about how SaaS was making inroads into the ERP market, citing studies from both Aberdeen Group and Forrester Research. It's hardly making huge inroads, however. As Panorama Consulting President Eric Kimberling revealed during a recent webinar, 58 percent of the companies in his company's research of 250 ERP implementations completed last year employed a traditional on-premise model for their ERP projects. (Slides from the presentation and an audio replay are available to those who become members of Panorama's website. Membership is free.)

 

Twenty-one percent of respondents used what Kimberling called a "hybrid cloud" approach, with a single-tenant instance of ERP that was hosted off-site by a third party. A perplexing 5 percent used an unexplained "other" approach, and 16 percent used a multi-tenant software-as-a-service model. The latter number was essentially flat from last year's survey. However, Panorama did not break last year's question about cloud ERP into SaaS and hybrid categories, so there has been growth, Kimberling added. "Nearly one in three ERP implementations now somehow involves cloud," he said.

 

While cloud is beginning to gain momentum with Panorama clients, Kimberling said most are more interested in a hybrid approach than in true SaaS - at least for broad ERP implementations. SaaS is more popular for point solutions and among SMBs.

 

Still, while at this point the hype about cloud-based ERP far outpaces actual deployments, Kimberling said he expects to "see the mix continue to shift over time where more companies look to the cloud in one capacity or another."

 

I got a similar story when I interviewed Computer Economics President Frank Scavo a few months ago. He told me:

As companies have pleasant experiences with cloud CRM or HRMS or expense management, people are starting to say, "Why can't we have our entire ERP system delivered in this way?" It's more popular right now among smaller companies but it's moving up market. And I think it's happening a lot more quickly than people expected.

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