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The 5 Points to Consider When Evaluating Cloud Vendor Partnerships

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Cloud computing is increasingly being embraced by enterprises of all sizes for application delivery with CEOs and CFOs taking on a new comfort level with the cloud based on their own personal usage, however many value added solution providers are taking note that their product portfolios may have gaps when it comes to cloud-based solutions. 

The fact is, for the past several years, information technology has been undergoing a shift from computing resources and services-based on premises systems in businesses to the cloud where users can access those same services and resources from anywhere, at any time, via the Internet.

We’ve found that cloud computing enables companies to rapidly roll out new solutions and stay current with the latest software application versions, many times at a lower cost than to do so on site. While the notion of “the cloud” still remains obscure for some organizations, cloud computing has gained momentum thanks in part to such applications as Office 365 with its robust communications and collaboration functionality, and Microsoft Dynamics CRM Online.

At our firm, we quickly took note of the fact that there was one gaping hole when it came to our cloud product portfolio – accounting and enterprise resource planning software.  As a result, we took to evaluating a host of potentially viable cloud-based ERP solutions in order to bring our clients a mature, feature-rich cloud-based ERP solution.

During our evaluation of potential cloud vendor partners, we considered five key points in evaluating the vendor field and our own entry into becoming a cloud product partner:

A Strategic View of Offering a Cloud-Based Solution. Making the jump to offering a cloud-based solution is one that involves careful strategic considerations.  For instance, how will you balance the workload between existing solutions in your product portfolio and new, cloud-based solutions? Do you have a team with the right development skillsets? What’s your comfort level with the timeline for return on investment? 

Industry Focus. The software world is home to hundreds of vendors offering software packages with thousands of features.  Since each industry has its own unique set of needs, you want a cloud partner who is focused on the complex needs of the specific industries your organization focuses on. 

Financial Stability. After you’ve determined which vendors are industry leaders, evaluate each vendor’s financial stability, including its available cash, its ability and desire to continue product investments and upgrades, its outstanding obligations, and company profile and credit ratings.  Review annual reports.  Read industry analyst opinions.  Ask for company statistics.  The more information you have available, the more informed decision you can make.   When we compared our cloud-ERP solution provider to some of the other contenders, their industry focus, product specialization and continued flexibility made the decision an easy choice.

Reliability. We know that downtime is not an option. With cloud-based solutions, clients benefit from uptime guarantees so that the application is there when you need it. This gives users greater reliability while eliminating the need for on-site hardware and software.

Security. From our experience, we’ve found that most organizations don’t invest enough in ongoing routine maintenance of their systems which leaves them vulnerable to security threats. With a cloud-based solution, users no longer have to worry about whether they are adhering to routine maintenance schedules. Look for high levels of security when evaluating potential cloud partners, ranging from secure data center facilities and data management practices, to product security such as role-level access and operations security practices including 128-bit data encryption and system monitoring.  They should also meet security standards including SAS 70 Type II audit, PCI-DSS and the US-EU Safe Harbor framework.

At our firm we didn’t just evaluate product offerings; we were equally interested in the character, business focus, and practices of the vendors we considered.  We wanted a partner that would be viable over the long-term, that was focused on the ongoing development of its product and that understood and was in sync with our expectations of a partner in terms of support, channel management, margin structure, and flexibility to help us close deals.

Cloud services offer a complimentary opportunity for solution providers who already run hosted services as well as the support and management for their customers. Once your clients implement a cloud-based solution, that doesn’t mean there is no longer a need for your services and expertise. 

We are now able to offer solutions based on our clients’ business needs, specializing in both cloud and on-premise solutions, as well as hybrid solutions that merge the best of both worlds to manage, store and protect your business-critical information.

Mark Goodson is president of BCG Systems, an Akron, Ohio-based value added solution provider which represents Microsoft Dynamics GP, AX; Sage 500 ERP; and NetSuite.

1 Comment

Great article. Security is the biggest concern when moving to the cloud vendors who continually improve systems to meet standards generally provide secure solutions, read a great whitepaper on cloud computing and cloud security in particular that readers might find interesting @ 'Cloud risks Striking a balance between savings and security ' it talks a great deal about securing the cloud and importance of cloud security http://bit.ly/ZFPu1l

Posted by: Sw@ll | May 30, 2013 5:41 AM

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