The root of cloud computing is ICS (Internet Consumer Services) and it is about creating a delivery and utilization model of ERP-enabled services that is all about the end user experience, end user control, and end user self-management. It has been seen that typical deployments of ERP systems on dedicated servers do not achieve more the 20-percent of average CPU consumption while at peak times they may be 100-percent memory or capacity. Cloud computing, on the other hand, leverages a pooled resources environment that uses virtualization in order for the physical assets to support multiple workloads.
Cloud computing is a paradigm shift in achieving optimization of:
- User self-service
- Cost reduction
- Economies of scale
- Utilization of resources
- ERP agility, flexibility and delivery of value
- Workload optimization
- Service management and delivery
In order to drive efficiency of the delivery to enable the self-service, self-management of cloud computing requires standardization of the hardware and software assets as well as automation. This is what delivers a responsive end user experience. So from the end user’s point of view it is scalable, accessible from any device, and delivers cost advantages. From a ERP vendor’s perspective, it’s about an environment of highly virtualized resources that are location independent and have automated service management to handle provisioning, de-provisioning, change management, security and overall environment controls.
The economic factors driving cloud are the combination of existing technologies (with a focus on the end user) and the enablement of the end user experience. Virtualization drives higher utilization which lowers capital expenses. Standardization also reduces capital and labor costs, while automation reduces management costs, drives an enhanced user experience, reduces errors and reduces the costs associated with managing an environment.