What’s the Difference between “True Cloud” and “Hosted Cloud” ERP Solutions?

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As organizations of all sizes transition to cloud-based infrastructuresthere are more options than ever for moving your ERP and business applications off-premises. One thing that can be confusing is that not all “clouds” are created equal and it’s important to know what you are getting before you sign up. 

So what’s the difference between “true cloud” vs. “hosted cloud” solutions?

What is a true cloud solution?


True cloud-based solutions  

True cloud-based solutions called SaaS (software as a service) are multi-tenant solutions that were built for the cloud from the start. The software vendor gives you remote access to the software and stores your data in data centers with connected servers. Your data is kept private, but the data centers allow the workload to be spread out so resources can be shared. This reduces the cost of hosting the data because the cost is spread among many users.  

In summary, with true cloud ERP solutions, the server infrastructure, software maintenance, security, updates, and backups are all managed by the vendor. 



True cloud solutions offer a variety of advantages:  

  • The infrastructure is more resilient and offers more elasticity to handle spikes in traffic. 
  • Data centers can devote a lot of resources to maintaining high security. 
  • True cloud solutions are easier to scale and integrate with other solutions or add-ons. 
  • Automatic updates mean avoiding expenses related to traditional upgrades. 
  • Your organization reduces IT infrastructure and maintenance costs with a more predictable subscription-based licensing model. 



For some organizations, the multi-tenant structure of true cloud solutions may not fit their needs: 

  • Less direct control over the software may offer problems for certain businesses 
  • Security for data centers is top-notch, but may not meet certain industry requirements  


Hosted Cloud Solutions 

True cloud solutions are multi-tenant with data stored in shared data centers. By contrast, a hosted cloud solution is single tenant and your data is stored in a dedicated, private cloud. For ERP software, this means that a business using a hosted cloud solution owns their software, but chooses to pay a hosting provider in order to run the application from off-premises servers. This offers some of the advantages of the cloud, such as better remote access and disaster recovery, but allows businesses to have more control over their software solution and security.  



The advantages of hosted cloud are mostly for businesses with very specific needs: 

  • For businesses that handle a lot of sensitive data or with very stringent security requirements, privately hosted cloud provides more control over security. 
  • Industries with complex regulatory compliance may benefit from having more direct control over the software itself. 



Privately hosted cloud brings some significant disadvantages over true cloud software: 

  • Businesses are still responsible for owning, maintaining, and upgrading their own software, and won’t benefit from the automatic updates offered by true cloud solutions. 
  • Because the infrastructure cost isn’t shared by other users, hosting a solution can be far more expensive than subscribing to true cloud-based solutions. 
  • The business is still responsible for much of the security, the virtual infrastructure, and other costs.  
  • Integrations and customizations can be more expensive and complex compared to true cloud software. 


Which one is right for your business? 

Every business has unique needs, so the choice of subscribing to true cloud-based solutions vs. privately hosting your solutions depends on the organization. If you’d like expert advice, we recommend contacting our Western Computer solutions experts who are focused on listening to your needs, helping you assess your business, and providing strategic guidance for long-term value.  


By Western Computer www.westerncomputer.com  


2 thoughts on “What’s the Difference between “True Cloud” and “Hosted Cloud” ERP Solutions?”

  1. Without question, there are upsides and downsides to both true and hosted cloud solutions. Both are beneficial for businesses, though it's important for them to determine which option is best for their long-term needs, especially with more and more people working remotely.

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