ERP in the Cloud vs. On-Premise Cost Comparison

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When considering an ERP solution, there are a number of options that need to be weighed, like which solution is right for your organization, how many users you will need, what functionality you will have implemented, and more.  However, with the increasing capacity and security of cloud computing, you now have another choice to consider:  How you are going to deploy your ERP solution – whether you will maintain your own data on your own servers or if you will have it hosted in the cloud.

A major that factor that will weigh into your decision between a cloud ERP solution and a more traditional, on-premise ERP solution is cost.

A cloud ERP solution will enable you to control and predict costs by:

  • Avoiding up-front hardware acquisitions or updates
  • Paying a predictable, monthly, per-user subscription fee
  • Getting software maintenance without annual fees
  • Taking advantage of software updates without paying for additional services

Because there is very little up-front cost, the time it takes to realize a Return on Investment (ROI) on your cloud ERP solution is accelerated.

On the flip side, an on-premise ERP solution requires a larger up-front investment and longer pay-back period before an organization would benefit from a ROI.  However, since you are only paying for your users licenses once, over the long-term, an on-premise ERP solution can have a lower Total Cost of Ownership (TCO) than a cloud system.

Regardless of whether you select an on-premise or cloud ERP system, you will most likely pay for some implementation and training services when you begin use.

If the ERP solution that you are considering is Microsoft Dynamics GP, there is a quick and easy way for you to compare the costs of both the software and services associated with an on-premise or cloud deployment.  Simply submit your requirements and a Microsoft Dynamics GP Quick Quote will be emailed to you that outlines what your initial investment would be for an on-premise deployment.  You can also use our Cloud ERP calculator to determine what your costs would be for Microsoft Dynamics GP cloud and email your results to yourself to compare with the on-premise options!

By Socius, an Ohio Microsoft Dynamics ERP partner

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