Should you run SAP Business One on-premises or hosted?

Post By Charlie Heywood on August 22, 2016

Should you run SAP Business One on-premises or hosted?

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Back in the day, companies didn’t have a whole lot of options when it came to where to host their IT. Running an ERP solution like SAP Business One often meant putting time, money and office space towards setting up and managing an internal server – regardless of whether the resources were free and readily available.

Now, though, things have changed. The modern ERP market is flooded with hosted, managed and cloud-based services, as well as traditional on-premises solutions, meaning companies are essentially free to choose whichever delivery model best meets their needs.

This has created its own problems, of course. Even with more flexible pricing structures on offer, ERP is a big investment – and choosing between on-premises and hosted isn’t easy. As much as some companies will thrive with their IT in a third-party data centre, others will struggle to make the switch in the short and medium term.

Not sure whether to run your SAP Business One implementation on-premises or as a hosted solution? Here are some of the factors you ought to consider first.

The benefits of SAP Business One as a hosted solution

Perhaps the most obvious benefit of the hosted option is cost. Setting up and managing on-premises infrastructure isn’t cheap, particularly if you expect it to deliver a high level of reliability and scalability. A third-party data centre will have economies of scale that no small or medium-sized company could hope to match, and a hosted solution will normally involve a fixed monthly fee rather than a big capex outlay.

It also means better use of your internal resources. By having a third-party handle monitoring, maintenance and support, you can enable your IT staff to focus on adding value to your business.

Lastly, a hosted solution will tend to provide much better security than an on-premises one. With an internal server, it’s not uncommon for surveillance and access controls to be limited, and for critical software updates to fall behind schedule unintentionally. UK government research shows that three in four SMEs (74%) fell victim to security breaches in 2014, with the costs reaching over £300,000 in some cases, so there’s something to be said for not skimping on security measures.

The benefits of keeping SAP Business One on-premises

On the other side of the coin, there are a handful of reasons that a company might choose to run SAP Business One on-premises rather than as a hosted solution.

For one, you may have existing on-premises infrastructure in place that has yet to reach end-of-life. If an internal server is still delivering ROI, there’s not much sense in retiring it in favour of a fixed monthly fee to a third-party data centre. Instead, you should only migrate when said infrastructure is up for renewal.

(Not sure where this leaves your ERP project? {{cta(‘1e50b6a4-ac7f-4521-9d30-438fb31011e1’)}}.)

Another possible driver for running SAP Business One on-premises is compliance. For whatever reason, you may have a company-wide policy to store your data in-house, and in-house only. Naturally, this will preclude the use of most hosted or cloud-based services.

Finally, consider your integration needs. If you intend to integrate SAP Business One with one or more legacy applications, it’s important to ensure this is possible in an off-premises environment. Some simply won’t lend themselves to being hosted in a third-party data centre, whether for reasons of design and functionality or because of a loss of support.

Remember, there’s no right way to run SAP Business One – it depends entirely on your business, including where you’ve been, where you are now and where you hope to be in future.