Cloud or Cloud? That is the question

Christophe Letellier CEO for Sage ERP X3 says: “Cloud technology is not a revolution; it’s an evolution that materialises the maturity of the Internet.”

March 27, 2013

“When approaching the subject of the Cloud, there is a choice between being strongly positive or enthusiastic. The wave in favour of the Cloud is so strong that views which attempt to even mildly address the need or even the relevance of the Cloud could make you look like a supporter of the past,” says Christophe Letellier CEO for Sage ERP X3. “However this has always been true with new technologies or business models; just look back to the early 2000s.”

Letellier says: “Cloud technology is not a revolution; it’s an evolution that materialises the maturity of the Internet. By definition the evolution will take time, a long time, when in contrast a revolution could change our world in weeks or months. As customers and suppliers, it has already taken us 15 years to get to where we are today with the Internet and it will probably take even longer before everything runs from the Cloud. The Cloud brings many good things to the software industry. It means solutions can be developed more quickly, agile development becomes standard and seamless upgrades are a given. Software vendors are changing and the Cloud is the trigger, but the change is embraced because it creates value for customers.”

According to Letellier the Cloud implies a different business model that is based on usage. The ‘per month, per user’ pricing model is the first step that will evolve into fully consumption-based pricing, which is good for customers. The Cloud will also open the ERP (Enterprise Resource Planning) world to many more users than today. Because it’s more flexible and web based, the Cloud will provide much easier access to an ERP system. Executives from especially mid-sized companies will, at last, benefit from the mine of data that is created by their ERP system.

Letellier says: ”The Cloud has changed mindsets and offers a technical solution, but one can deliver the very same value to your customers via other delivery mechanisms. In the ERP world for instance, there are many examples of strong adoption of financials in the Cloud when manufacturing, which requires significant customisation and close connection to shop floor control systems. Does it mean your customers should be put on the side of the road? Today a vast majority of mid-sized companies do use their ERP systems on big clients without web access, when such systems have been available for over 10 years now. Why should we expect that adoption of full cloud solutions will be that much faster? And does this mean that our customers shouldn’t have access to its benefits?”

“Adoption of the Cloud is a long journey. Cloud will become a standard in one or two decades. The challenge though is what do you do for your customers in the meantime? The Cloud will not dominate for some time in the ERP space but it will profoundly change mindsets and drive software vendors in a new direction. Having sold web-based products like Sage ERP X3 for over 10 years, Sage is not afraid of this evolution. On the contrary, we welcome this change towards flexibility and openness. This has always been our motto. Building hybrid systems and leveraging the best of the on-premise and cloud worlds will help the transition, drive adoption, and create true value for our customers. Our customers are pragmatic so we have to be inventive,” concludes Lettellier.