Traditionally, software has been purchased and installed on computers in your business (On Premise) and managed by you (upgrades, system requirements, etc).  In the past few years, SaaS (Software as a Service) or Cloud Computing has become more pervasive in various aspects of business.

The advantage of Cloud/SaaS options include not having to deal with internal IT requirements, backup, upgrades, fixes, etc that have long been issues with ongoing costs related to On Premise solutions.

Many of the traditional players in the ERP market have been moving to offering not only On Premise solutions but Cloud based solutions as well.  Some Cloud only solutions from NetSuite, Intacct, Acumatica and SAP have been doing very well in the financials only arena but are making great strides in the distribution and manufacturing sectors.

Another option is for you to have someone else host your software on their computers.  You still own the software, are responsible for the upgrades, updates, etc. But someone else has the IT infrastructure to manage and backup your software and eliminate the internal IT needed to support an On Premise solution.

So, what’s right for you? No simple answer here as it depends on your needs, culture, IT infrastructure, etc. From a cost perspective, Cloud based solutions may be initially less expensive as you pay per month per user verses paying for the software up front plus annual maintenance for On Premise solutions, but the cost analysis often changes after a few years when Cloud may be more expensive than On Premise, depending on how you factor in IT infrastructure costs.

Cloud solutions are not a fad and after years of belief they will dominate the marketplace, they are finally starting to gain greater percentages of the market and should be evaluated carefully.