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May 13, 2014

Cloud ‘could make ERP software cheaper for SMBs’

ERP no longer the preserve of big business with cloud computing, claims Sage.

By Joe Curtis

SMBs are on "the brink of a new era" as cloud makes enterprise resource planning (ERP) software more affordable for smaller companies, according to accounting software firm Sage.

Traditionally, ERP systems have been seen as too costly for many SMBs that lack the budgets of enterprises, but a Sage-sponsored survey found that many financial directors believe cloud computing will change that.

The YouGov survey of 154 financial directors found that 31% of respondents believe cloud computing is set to make ERP more viable for businesses, while another 30% said it would make it cheaper.

However, 35% believe it is still the preserve of big business.

Steve Attwell, MD of Sage UKI’s SMB division, said: ""We are on the brink of a new era for ERP. [It] is seen as the domain for big business. Yet cloud technology has changed that and what this study shows is that the cloud is breaking down barriers and making ERP a more accessible, viable option for small and growing firms."

The survey comes after SAP declared its intentions to become the biggest enterprise cloud provider on the market, pushing its operating margin deadline back two years to invest more in its HANA cloud platform.

It has also parted ways with its cloud sales head, which some analysts have interpreted as a sign that it no longer seeks to define cloud as ancillary to its larger on-premise core.

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The global ERP market grew 3.8% in 2013, up from 2.2% growth the year before, according to a Gartner update yesterday.

It is now valued at $25.4bn worldwide.

Attwell added: "Some firms have faced difficulty in the past from costly and cumbersome ERP projects, but it’s positive to see that firms are quick to recognise the cloud’s potential to revolutionise ERP.

"While online solutions may not be right for everyone, we can anticipate many firms considering cloud ERP as a potential replacement for aging core systems as they look to unlock the power of the web."

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