We are looking to move one of ERP applications from on premises to SaaS. What are you all seeing in terms of cost percentage increases to move to a cloud based ERP solution with the same vendor as the on premises system?
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One way to get a sense for expected cost increases is to check out investor calls for the SaaS provider. If the SaaS provider, say SAP, Oracle, Workday, Salesforce etc. is telling its investors that moving from on premises to SaaS brings in x% more revenue then you likely have your answer.
The cost percentage increases for moving from an on-premises ERP application to a SaaS solution with the same vendor can vary widely based on several factors, including the vendor's pricing model, the specific features and functionalities utilized, and any potential hidden costs such as data migration, training, or integration.
Generally, organizations may see an increase of 30% to 50% in ongoing operational costs when moving to a cloud-based solution, as they transition from upfront CapEx to ongoing OpEx. It's essential to conduct a thorough cost analysis, considering both short-term and long-term implications of the overall financial impact.
I can comment on SAP Public cloud only. You will notice four major impacts:
1. You have substantially less control over your environments. As of this writing you are stuck with three system landscape only - Dev, QA, and Prod.
2. Your projects should fit into twice a year mandatory upgrade cycles either you like it or not.
3. Your functional capabilities and abilities to connect to other systems will be limited.
4. Cost structure will be comparable to on prem with you having less control over the infrastructure.
Our initial estimates of lower deployment and run costs for public cloud haven’t materialized.