Platform as a Service Appeals to Manufacturers
As tough economic conditions continue to take their toll on operations and budgets, cost-conscious companies are looking for ways to maintain or regain their footing in the marketplace. So it makes sense that a growing number of manufacturers are turning to cloud computing and software as a service (SaaS), solutions which have developed a reputation for their business benefits, not the least of which is their money-saving potential.
Cloud computing in its most basic form is a hosted computing model that works on economies of scale. While cloud computing is often thought of as a software-delivery solution, akin to SaaS, an article at TechTarget points out that cloud solutions also include a management and support layer that facilitates the deployment of applications. This aspect of cloud, known as "Platform as a Service," or PaaS, "refers to the virtual renting of servers, hardware, storage, operating systems and other data storage capacities."
At the heart of cloud adoption is its cost-savings potential. Outsourcing computational needs is cheaper than purchasing an in-house solution, and competition between cloud vendors is further driving down the cost, notes ERP industry expert Steve Phillips. And because it provides a cost-effective management layer for the delivery of software and hardware as a service, PaaS will be "the pivotal part of the market," predicts Bob Parker, group vice president at IDC Manufacturing Insights.
A recent IDC report cited in the article notes that more than 20 percent of manufacturers have already implemented cloud, and another 43 percent are in the process of implementing or evaluating cloud strategies. This figure is even more significant in light of the fact that manufacturing is generally slow to adopt new technology, explains IDC's Parker. "Manufacturers are actually adopting cloud at a faster rate than other industries," he adds.
Phillips, author of the Street Smart ERP blog, is not shy in his cloud prognostications. "10 years from now," he states, "anybody hosting software internally might be considered a dinosaur."
