There is a general consensus that, by the mid-2020’s, most of the business systems will be cloud-based. But will they be multi-tenanted or hosted? In the early adoption of Cloud based systems, there were reasons to go cloud hosted - those reasons have been eroded over the past decade with true Cloud (multi-tenanted) rapidly overtaking Cloud hosted.
The future is . . .
In recent times, newer technologies and emerging software vendors have been working in collaboration with each other in multi-tenant environments at a price that is much less expensive than hosted alternatives. All major software organisations, Microsoft, Google, Oracle, Sage, Salesforce, ServiceNow, SAP etc have flagship solutions based on multi-tenanted Cloud ... there is no reason why that trend will not continue.
The near future at least includes a new norm, a distributed workforce for business reasons and as a response to the COVID pandemic. Work-from-home has become a feature in the not-for-profit sector, nothing supports work-from-home like Cloud computing. This eliminates the need for multi-layered remote desktop communications. The only layer now is an Internet browser. Software no longer needs to be deployed on multiple servers and/or desktops. IT management is greatly simplified, while security and scalability is far better than with in-house or legacy-hosted solutions.
Why was Cloud hosted once a valid consideration?
First of all, there certainly was a benefit to having legacy software deployed on a server off-site, compared to legacy software deployed on hardware at the customer’s site. While the customer would still pay hosting costs, the organization no longer had the expense of needing in-house IT staff to support hardware.
Secondly, legacy software was typically more functional than the newly developed Cloud software. Legacy software had been the result of years and years of upgrades supporting a rich feature list. However, that situation has reversed itself. Software developers over the past decade have concentrated on enriching their Cloud solutions, they are no longer investing in older legacy systems. Cloud based solutions are now both technically and functionally surpassing legacy systems, with that trend continuing. Cloud hosted legacy solutions suffer by having little or no development dollars being allocated to ‘dead’ technologies.
No software vendors to date have been able to convert their legacy solutions to run in a multi-tenanted Cloud environment, this simply means that older systems must be discarded as they are technically obsolete.
In a multi-tenant environment, there is only one copy of the application software, one operating system and one database supporting multiple organizations on a single bank of servers. As a result, it is easier to deploy and maintain one version of the application's software versus a hosted solution which must replicate the application software for each individual customer.
Since it is less expensive for the ERP application multi-tenant cloud software providers to support deployment of their software to their customers, this cost saving can be passed onto them. And, in those situations where there is a critical fix or system upgrade that needs to get out to hundreds, even thousands, of customers, the fix or upgrade can be done as soon as it is ready with a multi-tenant cloud ERP.
Virtually all new business application software that not-for-profit’s require is today being developed and created for the cloud, multi-tenant environment, not a hosted environment.
Work-from-home employees no longer need layers of software to link to a server, they can work anywhere, utilize mobile devices, and be productive regardless of their location.