Challenges for migration of ERP to Public Cloud

Ever since cloud computing has burst into the technology scene, there is a mad rush by almost all forward organizations to move their applications to cloud partially due to potential benefits showcased  by the service providers and cloud solution providers. Public cloud has been there at the forefront of cloud movement generally whether as Infrastructure as a Service, Platform as a Service or Software as a Service as it reduces the cost of operations and is extremely scalable at a fast pace. The applications ranging from websites to portals to best of breed business solutions to mail-messaging apps – all started moving to public cloud amid security and some other concerns – but somehow the movement is happening and at a fast pace.
While public cloud providers have almost all the case studies by now showcasing examples of payloads moved by different industries to cloud, but ERP Production Systems are still rare on public cloud, especially in emerging markets like China and India. We will particularly talk about India in this article, about challenges that are faced by organizations in all industry verticals in hosting their ERP Production (and even DR) application on public cloud (Infra as a Service).
In India, though every major public Cloud service provider has started selling their services long back, they have still not ironed out few gaps and these are:
  • None of the major players like Microsoft Azure, Amazon Web Services, Google, IBM etc. have their own data centres in India till now (Though there were couple of announcements made last month but these are still not visible yet). Due to this, the bandwidth expenses to connect to these international data centres are huge by any standards since ERP will need secure international MPLS line and IPSEC internet line will not be enough to take high load/ low latency requirement. This drives up the cost of moving ERP to public cloud to an extent that bandwidth cost is almost equal to the every other cost of hosting the ERP load there
  • Since major ERP players (like Oracle, SAP, Microsoft etc.) are also coming with their own Software as a Service models (and IaaS models also), they have a conflict with IaaS providers in terms of support. These ERP players do not say this openly but their executives will tell you in the discussions (with a disclaimer of not to quote them) that they will not support their ERP hosted on any other vendor’s platform or infrastructure
  • Software incompatibility is another issue which comes when trying to move to IaaS as most public cloud providers would like to open standard operating systems as well as virtualization software whereas ERP players will push for their own versions of these software or will not support in case of any product bug etc.
  • License calculation has come out as another area of conflict between the open standard public cloud providers and the ERP Product companies especially if the licenses you have, are processor based (maximum user base is like this) and not user based. The method of calculating cores/processors based on what virtualization software you are using and which hardware technology you are using, is different and is quite complex to understand
  • Another pain in ERP movement to cloud is that you will need to keep your test and development loads also with the same provider (or at least at the same location), otherwise you will need to shell out more money while you copy production data to the test instance. Normally, the ERP data does not move incrementally to test instance and it needs to be copied completely every-time and large organizations have their database size ranging from 2 TB to 10 TB which will not only take more time while moving through cloud but will also consume lot of bandwidth – so more cost
There are a few smaller problems (and security ofcourse – which is well known) that organizations in India face while moving their ERPs to public cloud but I will talk about those as they are more of irritants. I generally am a proponent of moving to cloud have actually migrated quite a few applications to cloud already but talking about ERP movement everytime gives me jitters. Yes, if the datacentres of these large public cloud providers are established in India fast (as they are promising for quite a long time now), then lot of problems will be taken care of. The other major one will be resolved when the tug of (cold) war between public cloud providers and ERP Product organizations is over – let’s see what direction these giants take in near future. 

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