Sage ERP Hosting, Part I: What Are the Options?

There is a sanctimony about cloud computing, with some ERP vendors eager to declare themselves “More Cloudy than Thou.” NetSuite is proudly 100 percent cloud, SAP is accused by rivals of being slow to the cloud, and the Sage cloud strategy might best be described as unfinished according to the company’s partners and customers. That cloud strategy will become far more clear in coming months, promises Sage CEO Stephen Kelly. And, Sage’s commitment to the Salesforce1 development platform seems a powerful change in course. Kelly envisions a future of subscription-based Sage products with thousands of apps available in a Salesforce.com-style app store.

Still, new on-premise ERP installations represent the majority at 56 percent in 2015, found the researchers at Panorama Consulting Solutions in their 2015 ERP Report (download required). But that is down from 85 percent in 2014. So the market for cloud-based ERP appears to be growing rapidly, and perhaps by the end of 2015 or in 2016 it will account for the majority of new implementations.

But software-as-a-service (SaaS), with its subscription pricing and its limited customization options, isn’t for everyone. Panorama found that manufacturers in particular are wary of the cloud. Some customers want to own their software outright and own their data without question.

For those organizations that have ruled out SaaS, there is hosting: The user still owns the software, but the installation sits elsewhere on user-owned or rented servers and is accessed via a secure connection. Let’s examine the cloud ERP options available from Sage and its partners.

What does Sage offer already?

Sage offers three conspicuous ERP-in-the-cloud options, with more in development:

Sage 100 ERP Online Sage 300 ERP Online, hosted at a Sage datacenter. Connectivity provided via Citrix

technologies. Sage 300 Online – this lives on Microsoft Azure and customers can connect via an

Internet browser

Numerous Sage 100 ERP partners also host Sage 100 ERP online, which is a better fit for Sage 100 ERP customers that have modified or enhanced their systems with integrated third party solutions (Sage’s online offering doesn’t provide integration to those solutions).

Three types of hosting providers.

There are a number of third parties that host Sage products. Gary Feldman, CEO of hosting provider and Sage Software Authorized Partner I-Business Network (I-BN) categorizes those third parties as follows:

Partners who offer hosting from their own offices, “But those that host for their own customers tend to use a dedicated hosting service from a generic provider such as Rackspace,” says Feldman.

Smaller hosting companies that also list ERP hosting and Sage 50 and Sage 100 on their sites. Feldman describes these as “Generic hosters… similar to Rackspace in that they have limited ERP application expertise, but primarily offer an infrastructure service.”

Partners certified in Sage software, whom Feldman says offer “The highest form of hosting. There are several of us that have ERP specific hosting acumen along with infrastructure expertise.”

What does that third class of hosting provider offer beyond the others?

Application-defined data centers were designed with the application in mind. For example, I-BN specifically sizes the infrastructure, selects the hardware and configures its cloud for the profile of the software.

The support staff speaks the language of the customer and the partner. “In Sage 100, Error 11 or Error 47 means something to an application aware technician,” says Feldman.

In-depth knowledge from a “One-Stop Shop”

Yes, some customers simply want rented rack space, but others want more from their hosting providers.

“We have more Sage partners and customers hosted with us than anyone else, and our guys are certified on the products we host,” says Stanley Kania of the Sage VAR Software Link (and its hosting division myownasp.com). myownasp.com serves Sage customers directly or through partners on behalf of their customers, and focuses chiefly on Sage 100 ERP, Sage ERP X3 and ancillaries.

The company reports that its typical customer wants a one-stop shop of hosting, consultation and implementation. Its theory (as it details on its website) is that “You will receive enhanced performance, access to a team of experts on your environment and its needs for growth, 24/7 support, and most importantly, less worry and more time to focus on the success of your business.”

“It’s very simple on our solution,” says Kania. “[Customers] put in usernames and passwords, while we install and patch it. If they work with a partner, and most do, the partner takes over the implementation. We want the partner to make as much money as they possible can, so we are hands-off on implementation. That’s why we have a great relationship with over 100 partners and we’re signing new partners every week.”

The benefits to VARs of partnered hosting

The myownasp.com hosting program helps Sage resellers become more competitive in an industry that has rapidly adopted cloud applications and the SaaS-based pay-as-you-go pricing model, said the company in a March press release announcing a partnership with Blytheco partnership, a full-service VAR and consultancy based in Laguna Hills, Calif.

Hosting partners need to attract implementation partners, and offer them a range of benefits like revenue sharing, streamlined customer management tools, integration options, and the opportunity to expand service offerings.

These types of arrangements benefit both partners, says VP of SaaS, Hosting, and Business Intelligence Stuart Blumenthal of MicroAccounting Solutions, a Sage VAR and Master Developer. “Our goal is to be partner centric, so that clients are not running to us for their hosting. If you’re a reseller and want to offer this to your clients, we have no problems partnering with you. If [clients] want those additional services, it’s a win/win for everyone.”

Who takes the service call – Sage, the VAR or hosting provider?

If the Sage partner is also the host, then the partner naturally fields the service calls. Otherwise, the hosting provider defers to the partner.

“If it’s a connectivity problem, we’re the first in line,” says Kania of myownasp.com. “But if we determine that it’s a Sage issue we’ll defer to the partner – say for how to do a journal entry or generate a report – so they can make money. Everything goes back to the partner, like upgrades. Let’s say a partner sold a Sage ERP X3 or Sage 100 ERP [installation], we’re just an option if they choose to put that product in the cloud,” says Kania.

Does the customer really want IaaS?

A cloud migration promises to deliver benefits like lower upfront cost and fewer IT headaches, but it can easily disappoint.

“Anyone can host someone’s system, and it’s thrown up on a server and it’s done,” says Blumenthal. “But integrations are the biggest challenge. If people are looking for the best price, they figure ‘I’ll run it with Amazon and pay X number of dollars per user per month. But what they get is not the experience they really need. Someone like that will have dual logins, [including] a local network login and a login up in the cloud. If the customer wants everything seamlessly integrated outside of their facilities, what you really want to do is expand the infrastructure.”

With infrastructure as a service (IaaS) the network is virtual and the employee’s workstation, wherever it may be, behaves just like a desktop workstation in the office. The IaaS configuration does everything from replicating the active directory to connecting printers.

MicroAccounting has an arrangement with a dedicated hosting provider. “That allows us the flexibility to set up and manage each of these virtual networks, but gives us and our clients the ability for 24x7x365 support as needed,” says Blumenthal. “And we have certain requirements that we needed to go into this type of arrangement, including disaster requirements and making sure we could overcome some of the challenges of putting on-premise products into the cloud. It takes hosting to the next level which is important, because it’s all about the customer experience.”

Are hosting and IaaS a credible answer to the cloud?

With cloud-based solutions available through a range of approaches, Blumenthal believes customers can choose ERP by what matters most – functionality. And that's where Sage partners have can claim a competitive advantage.

“NetSuite, Intacct, or Infor offer true multitenant cloud products,” he says. “Sage is focused on product and also on features. You focus on what is the right product for your organization and what product has the best feature set to meet your business needs. You find the product that meets your business needs first, then host it.”

Next Time: The practicalities of cost, complexity and configurability of hosted applications.

See more at: http://www.sageerpwire.com/story/sage-erp-hosting-part-i-what-are-options