Cloud computing: the next disruptive breakthrough for ERP?

[Randy Littleson]

Bruce Richardson of AMR posed the question of whether or not cloud computing would be the next disruptive breakthrough for ERP in his latest blog post entitled “The Cloud vs. SaaS: Compiere’s Don Klaiss weighs in.” I posted a comment at Bruce’s blog but have also included it here.


### My Comment ###


The two most interesting points are without a doubt the use of Amazon EC2 and the price point. While I agree with the bulk of your post, there are 2 areas where I must disagree:


You make the statement at the end of your article that Compiere will need to get “brand-name” companies to sign up in order to be taken seriously as a disruptive technology. I am willing to bet anyone $50 that none of SFDC’s first 100 customers, perhaps even none of their first 1,000 customers, was a brand-name. If Compiere can get significant traction in the SMB space, the brand-names will pay attention.


I think the much bigger barrier to broad adoption of Compiere will be the insecurity around support and maintenance with open source based solutions, not core functionality or price point. I have a personal bias against open source for these reasons so I would be interested to hear what others say about this issue.
I think open source and cloud computing are at odds. As Don Klaiss states, “And [the customer] has complete freedom to customize the solution as it sees fit and complete control over upgrade cycles and all other aspects of its IT environment.” Much of the attraction of cloud computing is the lower TCO, much of that achieved by reduced headcount in IT and reduced cost of maintaining highly customized or custom-built applications. In the current economic climate specifically, but in the long term too, I believe the TCO argument will prevail.


There are several other open source ERP companies, most of which are based in Europe. A comprehensive comparison of several of these was made by Smile in France, which is in French. (http://www.smile.fr/publications/livres-blancs/erp-open-source__1). I presume this comparison does not include Compiere Cloud. None of the ERP systems they compared has, to the best of my knowledge, gained any significant traction. One reason I believe to be the issues around support and maintenance. The other is one you bring up, namely direct sales. My experience of open source companies is that they are replete with technology people, with very little focus on sales and marketing, and somewhat short on people with deep operations knowledge and experience.


Trevor Miles is the Director, Product Marketing for Kinaxis, provider of the on-demand RapidResponse service that empowers multi-enterprise manufacturers with the collaborative and integrated demand-supply planning, monitoring, and response capabilities.