Demystifying the 4 Types of Cloud-Based ERPs

By Amy Knust

As you search for an enterprise resource planning (ERP) system that will meet your needs, part of your search should contain cloud-based ERP solutions, such as Acumatica and NetSuite. ERPs housed in the cloud offer many benefits to business owners, such as usable space that grows with your business; freedom from managing a costly, in-house IT department; affordable, subscription-based pricing; and, of course, access to your data anywhere and anytime. However, as you consider the various cloud-based ERP solutions, you’ll run across some confusing terms: public cloud, private cloud, hosted private cloud, and hybrid cloud. This guide will help you demystify those terms so that you can choose the right solution for your needs.

Public Cloud

The “public cloud” is what is usually being referred to when you hear about “the cloud.” Also known as Software-as-a-Service, or SaaS, this type of solution resides in a data center and typically utilizes a multi-tenant architecture. This means that both infrastructure and applications are being shared by multiple users. This type of architecture permits companies to share the cost of infrastructure and applications while maximizing the ability to scale solutions to their needs. Applications that support a public cloud architecture are typically web-based solutions. Both NetSuite and Acumatica offer public cloud solutions for your business.

The public cloud is like Netflix. No matter where you are in the world, and no matter what device you’re on, you can always access your favorite shows so that you stay up-to-date. You can create an account to store your information but you are sharing content and functionality with other users.

Private Cloud

There are multiple definitions of a private cloud that are commonly utilized. For purposes of this discussion, we’ll define them as internal private cloud and external private cloud.

Internal Private Cloud

An “internal private cloud” is housed within the enterprise, generally behind the firewall. This means that the organization is responsible for management of the infrastructure and the applications therein.  As a result, organizations that adopt this form of cloud architecture typically maintain an IT staff to manage the environment and are willing to assume the costs of controlling and protecting all their own data.

The private cloud is like a safe. Only people with the combination to the safe can get into it and if there’s any problem with the safe, you have to take care of it yourself. Acumatica can be licensed as an internal private cloud solution for your business. 

External Private Cloud

Sometimes called “hosted,” this form of the private cloud involves contracting with an external data center to provide infrastructure and/or applications in a dedicated environment to your organization. In this example you may be sharing infrastructure resources with organizations but they are managed in a unique virtualized or physical environment and accessible only to your organization.

Like the previous analogy, the hosted private cloud is also like a safe, and you can still only access it with the combination… but if something goes wrong with your safe, other people fix it for you. Acumatica can be licensed as a hosted private cloud solution for your business. 

Hybrid Cloud

The “hybrid cloud” is when an organization utilizes a combination of public and private cloud solutions. Many companies have elected to implement cloud computing in specific areas of their business where it makes sense. For example, certain business functions like CRM might require employees to have access to data from mobile devices or while traveling. These applications are particularly well-suited to be implemented as cloud solutions. Other business applications may be more well-suited to a private cloud environment and be internally maintained behind the firewall.

In summary, the cloud has many different meanings and applications in business today. Both NetSuite and Acumatica offer opportunities for your organization to realize the benefits of cloud solutions.

What type of cloud solution do you think will work for your business and why? Are you already on the cloud? What do you recommend for new adopters? I’d love to hear what you have to say.

SWK Technologies, Inc.