ERP databases on clouds

Question

Hi All,
I am currently in process of writing my dissertation on "Strategy for migrating ERP databases on clouds".
I did some research on traditional ERP vendors like SAP and cloud erp vendors Compiere, As a simple conclusion I can see that majority of ERP vendors use relational DBMS for storing ERP data. I have the following questions on which I would like to hear your views on. Following are the questions:
1.     What could be the possible reasons that companies implementing ERP/SAP mostly store their database in internal data centre and not on clouds?
2.     Will there be any performance issues (like latency, access speed) if the ERP databases are stored on clouds?
3.     How much secured would the ERP data be on cloud compared to internal data centre?
4.     Could the companies rely on the clouds as they would not be having the complete ownership of the data then?
5.     Could hosting ERP database on cloud help companies save enough money and would it be worth?
6.     Big ERP vendors like SAP are well established in providing on-premise ERP solutions. Would it be a big risk for these vendors (in terms of data security, database compatibility, less revenue) to move their client databases on clouds rather than using the traditional internal data centre storage?
7.     Are non relational databases a better solution for ERP data storage on the cloud compared to traditionally used relational DBMS?
If you can give your views on any of these queries, it would be highly appreciated
Your views will help me in my dissertation.
Many Thanks in Advance,
Dinesh

Answer 1

Hi,
Some thoughts for your queries:
1.     What could be the possible reasons that companies implementing ERP/SAP mostly
store their database in internal data centre and not on clouds?
- Cloud computing as a technology is relatively new (comparing to the others in its class) & is
developing. So a firm implementing ERP/SAP would prefer a stable or a technology which is in-place
for a while, so the devils & demons of it are known. Also there will be a perennial question of security
& in some industries a legal requirement to be met etc. etc.
2.     Will there be any performance issues (like latency, access speed) if the ERP databases
are stored on clouds?
- It depends on how the network is setup & to arrive at a definitive answer, a network specialist needs
to carry out a series of tests to provide the results. But as a heuristic, you can take that in-house server
is better than a cloud server.
3.     How much secured would the ERP data be on cloud compared to internal data centre?
- It depends on who is providing the cloud service & what security procedures they have in place.
A detailed external audit is required in the initial stage & a regular follow-up is required to ensure they
are following up. But this is easier said than done, if you're a small fish for the giant cloud service providers.
So an in-house center would be easier to manage, monitor & audit.
4.     Could the companies rely on the clouds as they would not be having the complete
ownership of the data then?
- The previous qns would play a big role for this. The doubt would persist, the moment the data is
not stored in an in-house server, so a firm running its entire operations & storing key business
information might not be willing to rely on clouds.
5.     Could hosting ERP database on cloud help companies save enough money and would it be worth?
- As seen from previous qns, the cost for cloud does not just include the cost charged for the hosting,
but will require additional costs in terms of audit, maintenance, etc. etc. Furthermore a firm which invests
in SAP, can be taken as a firm which is not low on resources, but assigns highest priority to security,
reliability etc. But a true analysis can be made only by an expert who has an in-depth know-how of both
technologies, as the costs may appear favoring a particular technology in near term, but ERP investments
are not short term.
6.     Big ERP vendors like SAP are well established in providing on-premise ERP solutions.
Would it be a big risk for these vendors (in terms of data security, database compatibility, less
revenue) to move their client databases on clouds rather than using the traditional internal data centre
storage?
- For sure there will be risks, as seen from previous qns, it would take a lot of research, effort on part
of any ERP service provider to ensure the data is secure. Maybe for the small & medium segment,
it would be relatively easier to think of moving towards Clouds, but not so much for the large enterprises.
7.     Are non relational databases a better solution for ERP data storage on the cloud compared
to traditionally used relational DBMS?
- Cant think of something which could decisively say one is better than the other & would have
to go with... 'Depends'
Good luck with your dissertation.
Regards,
Vivek