The Evolution of ERP Solutions: From In-House To Cloud-Hosted, Part 2

The Evolution of ERP Solutions: From In-House To Cloud-Hosted, Part 2

177403076Traditional on-premise ERP solutions, as discussed in our previous post, are fast becoming obsolete. They’re still being used by many small and mid-sized companies, but it’s unrealistic for smart, strategic business executives to continue overlooking the huge functionality gaps in the on-premise model.

The next stage in the evolution of ERP is the hosted approach. Hosted ERP software is a popular and attractive option: Young SMBs build new business management solutions from scratch, and well-developed businesses overhaul their current systems to be more flexible, functional and accessible. Here’s what a hosted ERP system looks like:


Unlike on-premise delivery of ERP software, the hosted approach eliminates the need to purchase hardware. Your software provider is responsible for buying all of the equipment needed to build a strong infrastructure.

Equipment Maintenance

Hosted ERP software takes the responsibility of equipment repair and maintenance off of your already-full plate. You’re not shackled by break/fix solutions, and you’re not hindered by the cost of emergency repair. You simply reap the benefits of a consistently updated, diligently maintained infrastructure.


Like on-premise enterprise software, hosted ERP requires that you purchase a license upfront.

Upgrades, Updates And Maintenance

Since you’re paying for the license, you essentially own the software. That means the cost and installation of all necessary updates, upgrades and fixes is your responsibility. The continuing functionality, security and efficacy of your business management system rely on consistent upgrading.

Like traditional ERP software, hosted ERP maintenance is part of an annual enhancement fee. You pay your software vendor to keep the ERP system bug-free and to make sure you’re working with the most up-to-date versions of the software.


Aside from location, hosted ERP implementation is similar to that of on-premise models. You pay for an implementation package upfront, and are billed for out-of-scope services as they’re rendered. It costs much less time and money to set up a hosted ERP system, and the productivity downtime you endure is significantly reduced. Still, it’s a cost that fluctuates too wildly to be accurately predicted for budgeting purposes; this unpredictability makes hosted ERP implementation worrisome for businesses with tight budgets.


Since you’re not housing the servers, you don’t have to worry much about the security of hosted ERP software. As part of your subscription fee, you’re given the peace of mind of a secure, protected business management system. Datacenters have access to better security measures than average office buildings do, and the impacts of natural disasters, power outages and break-ins are minimal.

Data And Server Backup

Hosted ERP servers are maintained by your software vendor, so you don’t need to worry about server backups. Data backup, on the other hand, is entirely your responsibility. The onus is on you to keep your critical business information private.


While hosted ERP software gives you the freedom of a provider-maintained system, you’re still charged for customer support. Configuration, training and troubleshooting are all available, but for extra charges. Like traditional on-premise models, the complexity and frequency of your support needs determines the impact customer service has on your budget.

Hosted ERP software is indeed a more functional approach than traditional on-premise solutions. But even hosted ERP is a difficult and often unpredictable cost for most businesses. Stay tuned for Part 3 of this series, where we explore the last phase in the evolution of enterprise software: SaaS ERP.

Want to learn more about the advantages of hosted ERP software solutions?  Download our free guide, An Insider’s Guide To The Best Cloud-Based ERP Software.


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Steve’s been with SMB Suite since 1998 and has been involved with nearly every aspects of the Company’s business as a strategist, professional services executive, cloud solutions architect, and senior consultant. In his current role, Steve is responsible for SMB Suite’s revenue and oversees the execution of ERP, CRM and BI projects for customers across a broad range of industries. Steve combines his expertise in MS Dynamics GP, CRM and other Microsoft products with a strong foundation in accounting and business to identify gaps and streamline customers’ processes. Prior to co-founding SMB Suite, Steve was previously Corporate Controller for MEHLE Behr and, prior to that, Audit Senior for Ernst & Young. Steve holds a Bachelor of Business Administration degree from the University of Texas at Arlington.

Jeremy is responsible for SMB Suite’s technology vision, strategy and implementation and is the architect of the Company’s Dynamics Cloud Platform. Highly adept in every facet of managed services, ERP systems and e-commerce platforms, Jeremy’s expertise spans the implementation and support of business and financial software solutions, as well as the customization and integration of SMB Suite’s cloud ERP technology stack. He holds numerous Microsoft and industry-related certifications, and was primarily responsible for designing the Company’s progressive business services platform in the early days of the Cloud. Prior to SMB Suite, Jeremy served as the financial analyst, systems administrator, and information systems liaison for a $2 billion financial services corporation.

Monty is responsible for SMB Suite’s day-to-day operation and, most importantly, its customers. As a leader, motivator and mentor, Monty creates loyal high performance teams willing to “walk through walls” to accomplish their goals. Prior to SMB Suite, Monty served as President of The Bradshaw Group (TBG), a global distributor, manufacturer, and repair facility for digital printers. In this role, he was the Company’s ambassador to its most important domestic, European and Latin American customers and TBG achieved a best-in-class Net Promoter Score of 74 for its superb customer satisfaction. Prior to TBG, Monty served as the General Manager of Sam’s Clubs three highest grossing U.S. stores and was named Regional Operator of the Year in 1999. Monty holds a BBA in Marketing from Texas Tech University and is an active member of Business Navigators. He has been active in Vistage International, Executives in Action, the Dallas/Fort Worth Retail Executives Association, as well as, A.P.I.C.S., the leading professional association for supply chain and operations management. Monty also volunteers with Hunger Busters and ManeGait, a therapeutic horsemanship organization.

David is a proven financial and information technology professional with expertise in providing business accounting software and computing solutions. He began his career by starting and managing a successful independent consulting practice for several years. He then launched the local systems consulting unit of Ernst & Young’s Entrepreneurial Services Group, leading the office into the hi-tech consulting arena. After successfully developing the unit for Ernst & Young, David founded NextCorp (which became SMB Suite in 2013) to serve the business software needs of clients throughout the US. David has made SMB Suite one of the best cloud ERP providers in the industry. In addition to being a successful entrepreneur and leader, he is a software and technology specialist, holding certifications in various Microsoft and other technologies.