Technical and Financial Overview: On-Premise Versus Cloud Installation
Most EDI systems can be installed on a Virtual Machine (VM) server or the cloud. The choice is yours alone as your EDI will function equally well in either location. The primary difference is extra time for setting connections between a cloud and the customers.
The complexity of the decision arises from two decisions:
- Technical – the site
- Financial – own or rent
| System | Technical (Site) | Financial |
| Business Application | On Premise | Buy + 20% annual maintenance (own) |
| Business Application | Cloud | Buy + 20% annual maintenance (own) |
| Business Application | Cloud | Launch Fee + user monthly (rent) |
| EDI/B2B System | On-Premise | Buy + 20% annual maintenance (own) |
| EDI/B2B System | Cloud | Buy + 20% annual maintenance (own) |
| EDI/B2B VAN Service(translation to/from intermediate file to/from X12 file) | Cloud | Launch Fee + user monthly (rent). The launch fee recovery period of the purchase price is about 36-48 months. |
ERP systems work with EDI systems in the cloud such as SAP/IBM Gentran or Oracle EnterpriseOne/GXS BizLink).
Cloud Disadvantages
- Cannot let maintenance lapse in recessions
- Forced upgrade – re-training
- Custom work in jeopardy
- The most common operational issue with cloud computing has to do with the delays making customer driven changes.
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