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“Cloud ERP can be quicker, cheaper and easier than on-premises – or not” by Denis Torii

by Debbie Wilson  |  November 19, 2018  |  Comments Off on “Cloud ERP can be quicker, cheaper and easier than on-premises – or not” by Denis Torii

In the very early days of SaaS (including ERP) apps, end customers would hear vendors compare cloud apps with traditional on-premises deployments:

  • Cloud applications are quicker to implement
  • Cloud applications are cheaper to sustain
  • Cloud applications are easier to adopt


Gartner has been for years telling our customers that these are too simple, and in many cases, naive statements. There are many reasons for that positioning, including:

  • Functional scope requirements between the new (cloud) ERP initiative may not be comparable to the on-premises suite. So, not an “apples for apples” kind of comparison.
  • Cloud ERP relates to a new application code line – so, even when the there is a cloud ERP solution provided by the vendor supplying the on-premises ERP application, migration requires some level of fit/gap analysis.
  • While upfront investment tends to be lower in terms of licensing and hardware investments, TCO analysis show eventually a higher long-run investment.
  • Integration strategies are now even more important, even when cloud-first is an approach that most would pursue in the long run.

During the process to create our recently published Magic Quadrant for Cloud ERP for product-centric midmarket companies, we ran an online survey with a set of reference customers from the vendors portrayed in the research (if you, as a Gartner client, have not yet seen this new MQ, I strongly advise you to do it) and gathered some interesting insights.

As expected, these insights show that references are positive in general about their cloud ERP adoption journeys. We captured data points that show that implementation risk acceptance and enterprise support for the initiative were common characteristics for these companies.

So, if cloud ERP, cloud-first, digital business transformation or all of those are part of your short- and long-term application strategy, I recommend Gartner clients to drop us a call so we can chat about this – soon, you will be seeing a research note with the findings, analysis and recommendations that we believe will help you understand early adopters perceptions and biggest challenges around that.

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Deborah R Wilson
Managing Vice President, ERP Strategy Team
12 years at Gartner
20 years IT industry

Deborah Wilson, a recovering Gartner research analyst, leads the Gartner ERP strategy research team. Read Full Bio

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