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Until recently there has been no choice in the world of ERP. Businesses had to buy perpetual software licenses upfront and they had to make the best use of their IT resources – if they had any.

Fortunately, this is now starting to change with the emergence and mainstream adoption of software-as-a-service, or SaaS.

“Choice”, in the context of Microsoft Dynamics ERP, means to empower our customers to achieve even more – whether that is selling more products, providing better service, or running their business more efficiently. With Software-plus-Services we enable companies and organizations to achieve even greater success. Our customers can choose the deployment option that works best for them. The power to choose how they run their software – whether as a wholly-owned on-site solution, via online services, all or partly- hosted, or in combination – allows them to take advantage of the business model that best fits their needs.

Today’s organizations are increasingly looking for more flexible and cost-effective ways to run their businesses and newer, more efficient ways to deploy critical IT resources while maintaining their competitive edge in the marketplace.

To address this challenge and embrace the opportunities today’s business environment brings, many organizations are moving to adopt hosted ERP solutions as an alternative to traditional, onsite systems. Hosted ERP solutions shift much of the ongoing software management from the customer to the solution provider.

In the coming weeks I’ll  share some business benefits of hosted ERP, address common misconceptions associated with ERP hosting, and outline some of the factors organizations must take into account when considering a hosted ERP system. But let’s make sure that we are all thinking about the same thing when we talk about ERP hosting. So here is how I look at ERP hosting:

Hosting is a software deployment and subscription model in which an application resides on a software provider’s or customer’s remote servers, rather than the customer’s onsite servers. The application is delivered via the Internet, and end users access it at their office or remotely using a Citrix or Terminal Server. With a hosted delivery model, the solution provider assumes responsibility for configuring, upgrading, maintaining, and supporting the application.

Because the solution is purchased as a service, hosting replaces large upfront expenditures and long, often complex implementations with predictable, regular monthly pricing for the customer—usually calculated on a per-user, per-month basis. Using hosted ERP systems, today’s organizations are often able to achieve a rapid return on their software investment, a lower total cost of ownership, and the many business benefits associated with using a software solution previously available only to large enterprises with more substantial IT budgets. This allows smaller organizations benefit from a level playing field and often neutralizes the technological advantage that their larger competitors have enjoyed for years.

Since its inception, hosting been referred to by many different names, including application service provider (ASP) solutions, software on demand, and, most recently, software-as-a-service (SaaS). Although there may be some minor variations among these terms, the underlying principle is largely the same: under a hosted ERP delivery model, applications are housed in a remote location and delivered directly to end users as a service via the Internet.

Stay tuned to The Edge for more posts on ERP hosting.

Jesper Termansen

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