With the introduction of the App-V technology for Dynamics NAV 2009 R2 (Navision 6.0), it really introduces the concept of putting Navision into the Cloud. In case you haven’t heard of App-V, you can download the white paper here describing it in detail:
https://mbs.microsoft.com/partnersource/deployment/documentation/whitepapers/msd_nav2009applicationvirtualization.htm
What is the Cloud?
Simply put, Cloud is software applications that people can use over the internet. There are a lot of IT documents out there will give you some complex definition or a diagram of what a cloud is. Don’t get caught up in tech speak! It’s a battle you’ll never win.
The advantage of the cloud is that you don’t need to invest in expensive hardware to use powerful software. In theory, it may also reduce your need for full time IT staff since there are less hardware to maintain (However, from my experience, this is usually not the case).
The cloud is great for softwares that you can use “as is”. Software such as e-mail and CRM, yes, there are some places where you need to personalize, but it’s usually not too intensive. Even with CRM, you usually need an ERP software to keep track of information that your CRM solution cannot.
Why the Cloud model Doesn’t Work in for your ERP?
Technically, it could. The cloud software model essentially has to be everything to everybody (I will repeat this phrase quite often). The cloud software is not able to be customized because it has to be everything to everybody. Every functionality the cloud software has written has to address the needs of the mass public that are using it, not just you.
In addition, even if the cloud ERP vendor says that you are able to customize their product, you’re request is subject to be routed in many other millions of queries about modifications for their company. And likely to be handed to a developer that doesn’t know what the intent was and may not create the function you need. Why? Because the cloud software model essentially has to be everything to everybody.
Another draw back is the ability to retrieve data. When you sign your cloud software agreeement, most likely, you’ve consented in that the cloud software company owns your data. So when it comes to a time where your company outgrew the cloud model, you may have a hard time trying to get your data out. Even if you can get your data out, it may just be the data from some master tables, and not the transactional data.
As I wrote in my previous entries, every business is unique, or I should say, HAS to be unique in order to have a competitive advantage. If your business is the same as everybody else, you shouldn’t be reading this blog, you should be seriously look into your company and identify what your competitive advantages are and leveraging that competitive advantage. So if your business is unique, why are you trusting the heart of your business that has to be everything to everybody?
How does App-V (Application Virtualization) Change the Game?
App-V allows your software, in our case Dynamics NAV or Navision solution, to be published over the internet. The App-V is an framework that allows you to create a private cloud that is controlled by your company. If you like the idea of not having expensive hardware inhouse, it also allows hosting companies to host NAV for you and publishing YOUR version of Dynamics NAV (Navision) software for you.
The advantage of this private cloud model is that the software is still under your control, this means you’re able to any customizations that is unique to your business. This model takes the best part of the cloud model and leaving out the everything to everybody part.
Conclusion
If your business is pretty simple and you don’t mind keep track of any information that’s not available externally, and you don’t mind waiting a long time for a support/modification request, and you’re comfortable having your financial data stored somewhere, then the straight cloud model may be right for you.
The cloud technology is always changing. What my concerns are now may not be relevant 5 or 10 years down the line. But as it stands right now, I’m having a hard time justifying any company to go straight into the cloud ERP model. The ability of App-V is a good starting point to eventually move into the complete cloud.
Thanks for another interesting post. I mostly agree with what you are saying about ERP and the cloud. But there are some cases, where it makes sense, in my opinion.
We have a lot of small retail stores as customers, where we provide the POS Systems and the Back-Office to handle the Maindata Management and some reporting (e.g. daily revenue, Margins). The differentiator for these stores is not in IT (most of the store owners are not very IT-Knowldedgable), but in Service (Home Delivery, customer contact, …), Location and/or price. Nowadays we supply them with a small Management Software, that is installed on premise. There are a couple of problems like Updates (you have to build a service to deliver these updates and install them, but sometimes you still have to update manually), viruses, Backups etc. A NAV installation in the cloud could solve many of our problems today, and would probably enable us to give our clients better services. In the end, it depends on the price tag (can we deliver the same for less $ or more for the same amount as today).
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Yes, there are and always will be certain situations that make sense for a company to go complete cloud ERP. I just can’t justify it for any companies that I’ve encountered so far in my career.
The private cloud with App-V would’ve made the implementation you did a lot easier. With the availability of 3G, 4G, WiMax, etc. It’s a lot easier for remote workforce to have access to the internet.
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Let’s get to basics. 9/11, drop of internet providers, Hackers, IP down time, Burned out Routers and switches are just the beginning. If the end-user has not way to access the cloud, what is the VAR suppose to do if he promised them all the bells and whisles of NAV Clouds App-V.
Yep, you just described the problems with the cloud. I wouldn’t recommend any clients to be cloud based for the ERP, only if the client insists or some other special reasons. Putting your financial data somewhere else always makes me very nervous. In addition, if your hosting partner is hacked or down for whatever reason, you can’t get a good timeframe on when your users can take order again.
All in all, the company considering the cloud ERP has to take those costs into account.
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