Niche Reports for our Niche Clients

A report into the future of ERP Part 1 of 3: ERP goes to the clouds

Different Clouds of ERP:

Why Business has gone to the cloud ?

Quicker deployments leading to faster time to value and freeing up resources for more strategic initiatives

More flexible and scalable solutions to provide long-term support for growth and expansion

…

By moving ERP systems to

the cloud, companies can gain

an assortment of

technological and business

benefits. Enterprise IT is

embracing cloud-based ERP

for many reasons, including:

Ease of deployment

Pay for only what you use

Companies today are under pressure from the economy; changing technology; changing customer, employee, and partner

expectations; and the need to compete in an increasingly complex connected global economy. To adequately respond to

these pressures, businesses are looking to use technology as the lever for and the underpinning of new, innovative

approaches to business. The cloud is a critical part of that strategy for most businesses and supports other key

technologies like mobility, decision support systems, and collaboration/social systems.

The choice of public, private, or hybrid cloud is a strategic business decision and should be examined closely. There are

benefits, costs, and risks with each model as well as regulatory and compliance issues that vary by industry.

When companies look at the cloud, there are many factors that influence the decision to move all or some of their

applications to the public cloud.

Highlights the top 5 drivers in terms of choice

DIFFERENT Shades of Cloud

Software as a Service

Platform as a Service

Infrastructure as a Service

ERP in the Cloud and the Modern Business

*Software as a Service (SaaS) and cloud-based business application services will grow from $13.4 billion in 2011 to $32.2 billion in 2016, a five-

year CAGR of 19.1%

*Public and private cloud computing will be strong catalysts of server growth through 2015. IDC reports that $5.2B in worldwide server

revenue was generated in 2011 or 885,000 units sold. IDC is forecasting a $9.4B global market by 2015, resulting in 1.8 million servers sold.

* IDC reports that enterprise cloud application revenues reached $22.9B in 2011 and is projected reach $67.3B by 2016, attaining a CAGR of

24%. IDC also predicts that by 2106, $1 of every $5 will be spent on cloud-based software and infrastructure. Report, Worldwide SaaS and

Cloud Software 2012–2016 Forecast and 2011 Vendor Shares.

SaaS & Open Source ERP

Increasingly in today’s marketplace companies are turning to web-based and SaaS services in which a third party hosts

the application. The underlying software driving the SaaS solution can be either commercial or open source.

Salesforce is an example of a commercial solution that supplies both software and services and supports itself by

charging for software, services, configuration, training, and customizations.

In the case of open-source software, a SaaS solution is only available through service providers who charge for the

providing services that can range from simple hosting to full application support.

SaaS and the Cloud

SaaS ERP and Open Source

Open source is estimated to account for

approximately 1.5% of the total ERP

market. For a long time companies that

wanted ERP could only choose from

among various proprietary commercial

solutions. Recently, however, more open

source ERP solutions have matured.

Gartner is predicting Infrastructure-as-a-Service (IaaS), cloud management & security devices, and Platform-as-

a-Service (PaaS) are growing from $7.6B in 2011 to $35.5B in 2016, a CAGR of 36%.

The three most popular net-

new SaaS solutions deployed

are CRM (49%), Enterprise

Content Management (ECM)

(37%) and Digital Content

Creation (35%).

The three most-replaced on-

premise applications are

Supply Chain Management

(SCM) (35%), Web

Conferencing, teaming

platforms and social software

suites (34%) and Project &

Portfolio Management (PPM

(33%). The following graphic

shows the full distribution of

responses.

SAAS

PAAS

The global Platform-as-a-Service (PaaS) market is growing from $900M in 2011 to $2.9B in 2016, achieving a 26.6%

CAGR. At this projected rate, PaaS will generate an average of $360M a year in revenue between 2011 and 2016.

Gartner projects that the largest segments will be Application Platform Services (aPaaS) which generated 35% of total

PaaS spending in 2011, followed by cloud application lifecycle services (12.5).

In 2011, the worldwide enterprise application software market generated $115.1B in revenue, and is

projected to grow to $157.6B by 2016, attaining a 6.5% CAGR in the forecast period. Gartner reports

that 38% of worldwide enterprise software revenue is from maintenance and technical support; 17% from

subscription payments; and 56% from on-going revenue including new purchases

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