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Cloud Solutions Are Not Created Equal

Cloud based solutions are very popular and becoming even more so every day. Estimates are that companies will continue to drive double digit growth in adoption of cloud based solutions well into the future.  The benefits of cloud based solutions, both financial and operational, are well documented and fairly well established at this point.  Solutions like vendor portal and supplier portal, vendor onboarding and supplier onboaring, accounts payable automation (AP), dynamic discounting, workflow management, data capture and many other applications utilize the cloud to deliver functionality. What is not yet common knowledge among users and buyers of cloud based solutions are the different types of cloud infrastructures and implementations which could have a big impact on the availability, performance, and security of your application and data.

First, lets take a look at the two main types of infrastructures for cloud based solutions, Private Clouds and Public Clouds.

Private Clouds: Private clouds are clouds that are hosted on servers that your organization controls and may be housed on your intranet or a third party data center or cloud service provider.  Your IT team team is responsible for management and maintenance of both the infrastructure as well as the application.  Access to the applications and data is limited to assigned members of your company.  The benefits of a private cloud is that performance, especially when dealing with large volumes of data, is generally better and security of the data is generally thought to be greater, although many would dispute that.  The drawbacks of a private cloud is it can come with large capital expenditures to stand up the cloud and the ongoing responsibility to support and upgrade the infrastructure and applications fall on your internal IT department. 

Public Clouds: Public clouds are the most common and widely used.  The infrastructure is stood up, housed and maintained by the cloud service provider at one of their data centers.  Two of the more common and widely used cloud service providers are Amazon Web Services (AWS) and Microsoft’s Azure, although there are many more.  The cloud service provider is responsible for the management and maintenance of the cloud infrastructure.  In public clouds multiple applications may be housed on the same servers and access to those applications may be shared among many different companies and users, although that is not necessary.  Public clouds are proving to be very secure despite some early concerns.

This leads us into the next point you should consider when selecting a cloud based solutions: Multi-tenant vs. Single-tenant. 

Multi-tenant:  In a multi-tenant, public cloud based solution or application, the applications are designed for use by multiple users from different companies.  While each companies data is segregated and available only to its owners, the application functionality is shared among many users.  The benefit to this approach is it is less expensive for the application provider and in theory for the users also since each users shares the same base application.  The downside for many is that multi-tenancy limits the functionality to what is there and users have to redesign their process to fit the application or pay for very expensive and risky customizations..

Single-tenant:  Single-tenancy can provide some of the benefits of a private cloud and public cloud.  The infrastructure is still maintained by the cloud service provider and the application by the solution provider, but the major difference is the application is designed for your company, to meet the needs of your individual process.  Multiple applications may still be housed on shared servers but the individual applications are not shared among multiple companies.  The benefit of single-tenancy is the ability to customize your application to fit your process in a quick and inexpensive manner while still taking advantage of the cost benefits of cloud solutions. 

So as you evaluate different cloud based alternatives for your business applications consider the infrastructure, tenancy, cost, and flexibility of each option so that you make an informed decision for your organization. Contact ICG today to learn more about our suite of cloud-hosted solutions or to schedule a demonstration for your team.


Posted on May 12, 2020