Cloud vs On-Premise for SAP Business One

In a world where most software products are now being written for the cloud, hosting SAP Business One in the cloud is a logical next step for forward-thinking businesses that want to future proof their essential business systems. There are many benefits to deploying software in the cloud, such as increased security, reduced infrastructure costs and decreased carbon footprint. In this blog we will look at the 8 key benefits of cloud deployment for SAP Business One versus on-premise, when considering various key business concerns.

• Cost
• Deployment
• Control
• Security & Compliance
• Backup & Recovery
• Flexibility, Adaptability & Responsiveness
• Sustainability

Cost

On-Premise - "It is very challenging to design an on-prem system that fits the needs of the company exactly and resources are often over-provisioned."

SAP Business One is targeted at SMEs across all industries but it is particularly strong in the manufacturing and wholesale distribution sectors. These are traditionally industries with tight margins and large overheads. Infrastructure costs contribute a significant amount towards business overheads, with companies having to bear the full costs of installation as capital expenditure, along with the ongoing costs of power consumption, maintenance and personnel costs, when they choose to host their infrastructure on premise. Dedicated on-site servers, and the environment to house them in, are expensive and often require multiple purchases; these resources are often over-provisioned as businesses have to plan their resources for future consumption, which means expensive hardware can be sitting idle waiting for spikes in resource demand to occur.

Cloud - "Budgeting is a simpler process and importantly, you only pay for the resources you need now, not for what you need in a few years’ time."

One of the primary benefits of hosting SAP Business One in the cloud is that companies bear the costs of the resources they use as an operational expense. Cloud costs are straightforward, predictable and easy to track, making budgeting easier. Overheads are significantly reduced by not having to maintain on-premise infrastructure and the personnel to support this. It also means that businesses only need to pay for the resources they need now, rather than what they might need in a few years’ time.

Deployment

On-Premise – "On-premise hardware needs to be installed in suitable environments as its lifespan can be significantly reduced if conditions aren’t suitable. It is essential that the environment supports the software solutions to be deployed, or it could affect the performance of the software."

Companies that choose to host SAP Business One on premise need to use their own servers and infrastructure. This may require the purchase of additional hardware, which needs to be ordered and delivered, and then the infrastructure needs to be physically installed on-site. It is also essential that on-site hardware is installed in suitable environments. If infrastructure isn’t installed in suitable conditions, it can greatly reduce its lifespan, adding costs to fix or replace hardware before you expected to. In addition, installation and deployment require expertise in the form of qualified staff and/or external contractors. Additionally, changes or upgrades to infrastructure may result in additional delays for similar reasons. 

Cloud – "Resources are housed in optimum conditions and can be deployed and scaled rapidly and cost-effectively to meet business needs."

The AWS cloud provides rapid access to compute resources to host SAP Business One, which can easily scale to match their company requirements. With numerous services and configuration options available on AWS, Ascarii’s pedigree and expertise as a cloud-first company ensures that the most cost-effective and secure deployment is built. As and when an upgrade is required, as use of the solution increases, our technical team can switch on the additional resource almost immediately, reducing downtime and keeping your employees’ productivity high.

Control

On-Premise – "Many business leaders believe they have greater control over their solutions if they are hosted on-premise, but this relies on a suitable environment to house those resources and sufficient qualified staff to support them."

One of the key reasons companies choose to host SAP Business One on-premise is that they believe it enables them to maintain complete control over their data and resources. The proximity of on-premise servers gives companies a sense of confidence that they have additional control over their solutions, assuming they have sufficient IT support to maintain their on-premise servers.

Cloud – "AWS guarantees uptime of 99.995%, which on-premise infrastructure will never compete with, while removing on-prem maintenance and support overheads."

AWS Cloud offers similar access and control as on-premise infrastructure without the inconvenience of having to maintain on-premise servers. Companies that choose AWS to host SAP Business One maintain complete control over their computing resources, but the guaranteed uptime of 99.995% from AWS is a level of reliability that on-premise servers simply can’t compete with.

Security & Compliance

On-Premise – "Poorly built or poorly managed on-premise servers can be vulnerable to modern cyber-attacks, creating a serious risk to the business."

Security is one of the key concerns for modern-day enterprises and is especially important for highly regulated sectors such as healthcare and finance where enterprises need to ensure that they are meeting security and compliance standards. Poorly built or poorly managed on-premise servers can be vulnerable to complex modern cyber-attacks and the physical proximity of the servers to the company often makes them an easier target.

Cloud – "AWS invests heavily to offer industry-leading security measures, such as end-to-end encryption, identity management, and continuous monitoring, to protect businesses against potential threats."

Data stored on the AWS cloud is hosted in secure data centres on servers that are not localised to the users themselves, therefore making the possibility of a physical breach less likely. Additionally, AWS invests heavily in security. For example, all data flowing across the AWS global network is encrypted at the physical layer before leaving AWS facilities.

AWS has a Shared Responsibility Model with its customers for security and compliance. AWS states that it bears “the burden of operating, managing, and controlling the components from the host operating system and virtualisation layer down to the physical security of the facilities in which it operates.” As a cloud-first SAP partner, Ascarii assumes responsibility for the guest OS, application software, firewall configuration, and choice of services and ensures that they align with security and compliance requirements. With cyber criminality on the rise, the move to cloud over an on-premise configuration is growing at an exponential rate. Companies used to worry about their data alone but are now having to be concerned about access to their business systems overall. Hosting SAP Business One in the cloud with Ascarii reduces risk and can further enhance your system security.

Scalability

On-Premise – "Scaling on-premise servers requires the purchase of new servers; if demands are low, physical resources sit idle and overall system efficiency is reduced."

On-premise servers are scalable, but the scalability comes at a cost. Scaling with on-premise servers requires the purchase of new servers and may even require the purchase of property on which to host the servers. On premise scaling usually only goes in one direction - up. It is very difficult to scale down when demands for resources are low, leaving physical resources to sit idle and diminishes the overall system efficiency.  

Cloud – "Scaling cloud resources is quick and easy, requiring only a subscription adjustment to access additional resources and meaning the scaling can go up, or down, according to business needs."

Scaling on the AWS cloud is effortless and requires nothing more than an adjustment of the subscription to gain access to additional resources. This scaling can go up or down depending on system needs. This is why we partner with AWS, the leading hyperscaler available. This ability to scale with your business requirements is a big reason why companies are moving away from on-premise set-ups and embracing the AWS cloud.

Backups & Data Recovery

On-Premise – "Companies relying on on-premise infrastructure face significant risks of data loss in the event of hardware failures, cyberattacks or natural disasters, which can result in lengthy and costly data recovery processes and can be crippling for companies without effective backup processes in place."

Many business leaders still gain peace of mind from having data backups on-site or being taken away with a key member of staff every evening, but this poses a significant risk to the business. The risk of loss in the event of a physical issue is real – hardware failure, fire, flood or other natural disaster, and losing information and dealing with data recovery can be crippling for companies with on-premise infrastructure. Backup data storage is not only expensive, but recovery takes time, energy, and expertise. Ascarii has known customers who have been crippled for months after their systems have been compromised following cyber-attacks, which has had a massive impact on their ability to continue operating without access to their systems.

Cloud - "AWS cloud deployment provides secure, automated backups and fast data recovery, ensuring business continuity and protection against data loss."

Conversely, data back-ups on the AWS cloud are simple and straightforward. Once businesses get used to the concept that their data is hosted in the cloud, it gives them extra reassurance that the level of security and data back-ups provided as standard means that their essential business systems are safe and secure. Ascarii has numerous options for Disaster Recovery (DR) of varying degrees of complexity. Companies choose between cost-effective approaches such as simple backups and more complex strategies such as the usage of multiple active Regions, plus the use of state of the art ‘Disaster as a Recovery’ services to minimise downtime.

Flexibility, Adaptability, & Responsiveness

On-Premise – "On-premise infrastructure can be very restrictive and businesses are bound by the limitations of resources available to them."

Companies reliant on software solutions that are hosted on-premise are bound by the limitations of the resources that are available to them and may not be able to adapt to sudden and unforeseen changes in market conditions such as the COVID-19 pandemic. Companies that had already embraced cloud-based software solutions, and had the ability to access their systems remotely, were the ones that experienced the least disruption to their business operations when the country went into lockdown overnight.

Cloud – "The cloud offers flexibility and responsiveness to adapt to changing market conditions and business requirements, while supporting business continuity cost-effectively."

The cloud provides companies with the flexibility and responsiveness they need to adapt to ever-changing market conditions. Flexible resource provisioning enables companies to scale up or down based on their current requirements, and the ability to access essential software solutions from anywhere facilitates modern-day flexible working practices, enabling collaboration between employees wherever they are.

Sustainability

On-premise – "On-premise infrastructure is counterproductive to today’s sustainability goals, contributing to increased CO2 emissions caused by energy usage, staff travel and disposal of waste IT equipment when its useful lifespan has passed."

Traditional on-premise infrastructure has a set lifespan and needs replacing when that timeframe has passed, which causes issues with disposal and recycling of waste IT equipment. On-premise hardware also requires a cool environment, which increases energy consumption to power air-conditioning, and which can have a significant impact on CO2 emissions, particularly in older and poorly insulated buildings. The nature of on-premise deployment means that it’s likely that most employees will be commuting to the workplace, which also has an impact on CO2 emissions if they are mostly travelling by car.

Cloud - "AWS has committed to using renewable energy sources for their energy-efficient datacentres, investing in renewable energy projects, and offering tools for businesses to optimise their resource usage and reduce carbon footprints."

AWS has committed to using renewable energy sources for their datacentres, which reduces their carbon emissions and environmental impact. In 2022, 90% of the electricity consumed by Amazon was attributable to renewable energy sources and they have committed to powering their operations with 100% renewable energy by 2025 as part of their commitment to reaching net-zero carbon emissions by 2040. Multiple studies carried out by 451 Research have found that by moving on-premise workloads to AWS can reduce customers’ workload carbon footprints by nearly 80%, and up to 96% once AWS is powered by 100% renewable energy. Consolidating computing resources and high utilisation rates enables large cloud datacentres to achieve greater energy efficiency and reduce their environmental impact. The adoption of cloud technology facilitates remote work, as employees can work from anywhere, reducing the need for commuting, which results in lower fuel consumption and reduced vehicle emissions. This then contributes to improved air quality and decreased traffic congestion.

The global drive towards sustainability is not going to slow down and with large companies increasingly having to report on their emissions and meet sustainability targets, which we fully expect will be rolled out to smaller companies over time, migrating to the cloud will only help this. Using a global hyperscaler, such as AWS, gives companies confidence in the knowledge that they are striving towards a more sustainable and eco-friendly future as a direct benefit of the investment that they put into sustainability.

Conclusion

There are many compelling reasons why companies should consider cloud deployment for SAP Business One and other essential business systems. These benefits include reduced infrastructure overheads, increased security, compliance, and decreased risk of data loss, as well as contributing to longer-term sustainability goals. As a cloud-first company, Ascarii has over ten years’ experience of hosting SAP Business One on our purpose-built AWS cloud platform, enabling customers to reap the many benefits of cloud deployment. To find out more about cloud hosting for SAP Business One, please contact our friendly team.