You have probably heard some new industry terms such as “moving to the cloud,” “SaaS” and “on-demand”.

What does this all mean to you and your business? First, let's understand what some of these terms are all about.

The cloud, or cloud computing, means sharing multiple computers over a network, allowing resources to be better utilized by allocating idle or underutilized computing capacity to applications needing them. There are many different types of clouds. One business can have their own private cloud, or businesses can share resources with other companies through the public cloud. You are essentially outsourcing some of your IT infrastructure to the cloud.

SaaS stands for Software as a Service. This allows the software provider to install the software at a remote location and then allow access by users via their “client,” be it a laptop, desktop PC, or mobile device. On-demand is synonymous with SaaS.  You only use the resources as needed. This allows you to access the software through the Internet and never have to download it to your computer.

These concepts are the current trend in IT and for good reason. There are numerous advantages to cloud computing and SaaS applications. Cloud computing advantages include:

• Reduced capital expenditures as your organization does not need as much hardware
• Reduced power consumption and climate control needs
• Internal IT staffing requirements can be reduced with less hardware to support
• Hardware capacity is nearly instantly scalable, and you don't pay for hardware you don't need
• Shared servers place the responsibility of backups on the entity that is providing the computing capacity
• Cash flow requirements are spread out and predictable as Cloud computing typically follows a pay-as-you-go model

Benefits of the SaaS model include:

• Software installation and upgrades are done by someone else
• Upgrades typically occur at least twice a year and usually don't require a great deal of effort, depending on the level of customization that was done to the software
• Implementation time is reduced
• Implementation costs are reduced
• Most or all of the implementation work can be done off premises if outside expertise is required
• Applications can be accessed from anywhere without compromising functionality
• SaaS usually follows a pay-as-you go model as well

According to IDC, SaaS based applications will overtake traditional applications by 2014.

SAP®'s latest offering, Business ByDesign™, is a cloud based end-to-end solution ideal for SMB's needing to replace their current systems. For more information on Business ByDesign and how AdvenTech can help your business, visit our SAP page.