In my last blog I dealt with a question that many executives are being asked in today’s ever-changing technology environment. They are trying to make the decision on which business applications to move to the Cloud and which ones to leave On-Premise.
The Cloud vs On-Premise Decision
It is clear that cloud adoption is growing, and some reports indicate that at least 80-85% of companies have some of their business application workloads already in the cloud. KTL is a certified Microsoft Dynamics ERP/CRM and Tier-1 Cloud Service Partner and we are seeing customers in increasing numbers embrace Cloud technology.
In my last blog I went through many of the reasons why customers are buying and requesting cloud solutions. There are a set of factors that we hear from all companies regardless of size but there are some different factors that surface depending on company size and whether the company has dedicated IT staff.
I am not going to detail all those factors again in this article but if you missed my previous article click here to reference why customers are requesting and buying cloud solutions. Although, in this article I will focus on one of the key factors that is critical to all companies and that is the financial/cost impact of Cloud vs On-Premise.
The Cloud vs On-Premise decision is also a CAPEX vs OPEX decision. With On-Prem you typically have a large capital outlay (CAPEX) of cash to purchase both the hardware and software. This is cash that could be utilized on other initiatives. In a cloud environment the cost is typically an operating expense (OPEX) and paid and expensed monthly.
As outlined earlier I work with new and existing customers every day that are evaluating this Cloud vs On-Premise decision.
So, in this article I wanted to provide some financial examples of some specific Dynamics GP scenario’s that we have worked on. I have provided two (2) examples for evaluation. First example is a new GP Installation and the Second example was for an existing Dynamics GP customer that already owns Dynamics GP under perpetual licensing.
Example 1 Scenario:
- New Dynamics GP Installation
- 5 GP Users
- On-Premise Installation with Perpetual Licensing
- Cloud Installation with Subscription Licensing
Example 2 Scenario:
- Existing Dynamics GP Installation
- 5 GP Users
- Client already owns Dynamics GP Perpetual Licenses
- On-Premise Installation with Pending upgrade
- Cloud Installation and maintain Perpetual Licenses
It’s evident from these two examples that the Cloud cost savings can be compelling. Even though I used Dynamics GP examples in this article, this same analysis can be used on other business application workloads.
Furthermore, do not use these examples as an automatic approval for your Cloud vs On-Premise decision. Each organization must conduct its own analysis and weigh that outcome against other business factors and goals.
If you are currently in the middle of a Cloud vs On-Premise decision please feel free to reach out to me at sreid@ktlsolutions.com and let’s go through your requirements and analysis before making this decision, or get in touch with us here.
