Software-as-a-Service (more commonly referred to as SaaS) has transformed the way we consume software. What started in mostly the consumer space has now fully transitioned into the business world. Companies across the globe have realized the benefits and cost savings of cloud-based, SaaS offerings. And we have graduated from simple business management and HR SaaS apps; cloud-based software has now penetrated core supply chain systems.
Despite a tradition of on-premise technology monoliths running our warehouses and transportation fleets, leading industry providers are making the move into the cloud. Just last year, Manhattan Associates released it's Active Warehouse Management solution, a truly cloud-native, microservices based system and has begun transitioning it's existing WMOS client base to this new version.
So why is the supply chain industry making the push into the cloud? What makes the cloud work particularly well for supply chain systems? Continue reading to find out.
As cloud offerings have proliferated, the various types of clouds have expanded, allowing greater flexibility and control for companies.
This is the cloud everyone thinks of first. Major providers like Amazon Web Services, Google Cloud Platform, Microsoft Azure, and many others dominate this space. For very reasonable prices, developers are able to create virtualized machines in one or more of the provider's data centers.
One misconception about public cloud offerings is that the server instances will be exposed to the internet and/or other tenant's data. Both are simply not the case. All cloud providers offer a Virtual Private Cloud service, which sections off your cloud instances from all other virtual servers in the data center. Cloud servers can also be hidden from the public internet, only accessible via VPN, DMZ, or other private techniques (see this article for more details on securely integrating cloud services).
Private clouds arose from corporate concerns about data privacy and security in public clouds. Although these concerns are mostly unsubstantiated (which we address more in depth in the Security section below), major software vendors such as IBM, Dell, HPE, and others have risen to provide off-premises, in-network private clouds.
While a private cloud is the most similar to traditional on-premise servers, the major difference here is the hardware is vendor owned and operated, typically residing in vendor data centers across the country. This means your internal IT teams are no longer required to maintain or manage servers and other equipment. Your company gets dedicated, private hardware that often runs within your internal firewall, without all the hassle of server maintenance.
The major downsides of a private cloud as compared to a public cloud are the costs. While still being significantly cheaper than on-premise servers, private clouds cost substantially more than a public cloud offering. Additionally, you can sometimes lose the robust automated failover protection offered in public clouds (see the Uptime section below for more details).
A hybrid cloud is just what it sounds like: a blend of public, private, and/or on-premise deployment models. With a hybrid cloud infrastructure, companies can integrate applications on any hardware into one, seamless experience for your business users and developers.
Typically stitched together by a data fabric technology, hybrid cloud architectures appear no different to end users as any other infrastructure model: users access apps through your internal network at your company's private domains. Additionally, for techincal users working on the systems side, hybrid cloud data fabrics make all data services work together cohesively despite their different underlying hardware architectures.
While the types of cloud offers has expanded over time, many technological improvements have also made cloud-based software safer and more security for business applications. It is primarily due to these technology innovations that companies are now trusting the cloud for their mission critical supply chain systems.
Data privacy and security is at the forefront of everyone's mind when it comes to cloud technologies, and rightfully so. In today's day and age, data breaches are all too common, and companies must be extremely careful when it comes to securing their data.
You can rest assured that data security is at the forefront of every cloud provider's mind as well. They know people are worried about privacy, and these providers have spent billions of dollars ensuring their technology is sound and robust. Every provider has teams dedicated to keeping your servers secure, and objectively spend more time and money on data security than your internal team does.
When cloud computing was first rising to prominance, latency between operational sites and off-premises data centers was a major concern. Especially for core, mission-critical solutions like warehouse management systems, with potentially millions of transactions per hour, companies were rightfully worried about if the networks could handle that level of transaction volume.
But thanks to the proliferation of gig-speed+ networks, along with other technologies like dark fiber, latency concerns are a thing of the past. A multitude of new network service providers now offer companies a wide array of choices to meet their networking needs. With the right network infrastructure in place, cloud-based SaaS solutions are able to handle as many if not more transactions per hour than traditional on-premise hardware.
Service uptime, or availability percentage, is another area where cloud providers have invested heavily. We are now at a point where cloud servers can be expected to be available at a higher rate than on-premise hardware. For example, Google reports their load balanced cloud servers can be expected to be available more than 99.99% of the time. Contrast that with your organization's average server uptime, which I would argue is probably lower than that.
Cloud services can also be configured with automated failover procedures to further strengthen server availability. This means that, if an unforeseen event causes a server to crash or go into an error state, another server or container will automatically boot up to account for the lost capacity. With proper load balancing configuration (or just the inherent microservices architecture of your solution), end users will never see an interuption to their applications. Compare this with how many interuptions your users have faced due to your on-premise hardware going down.
Finally, with the widening of cloud providers and offering, natural market competition has driven the price-per-resource down over time. As can be seen in the graph here, cloud services' pricing has fallen dramatically over the past 10 years.
And while direct costs are an obvious savings opportunity, the indirect savings from adopting cloud-based services can be dramatically higher. For example, how much time are your internal IT teams spending monitoring and maintaining your on-premise hardware? With their days constantly interrupted by requests to restart servers, perform database updates, and more, it is challenging for IT professionals to accomplish productive projects. Cloud SaaS solutions aleviate this pressure, freeing your internals teams to focus on real work and not have to worry about constant hardware management.
Beyond just new deployment models and technological improvements, SaaS solutions offer many benefits to corporations, particularly when it comes to the supply chain space.
How much of a headache was it the last time you tried to upgrade to the latest version of one of your core supply chain systems? With a traditional on-premise deployment, system upgrades are anything but simple - they are typically an entire project in themselves. This is not the case with SaaS solutions.
Most cloud-based software is continuously updated to the latest release in real-time. It can be as simple as the next time your users log in, they have immediate access to the latest features and code patches. Not to worry though, software providers typically provide controls to administrators to strategically roll out these features to their users. When a new version or feature is available, your IT team can control when those features are shown to end users in order to aid in your change management.
Along with fine-grain controls, most supply chain SaaS solutions provide automated regression testing specific to your environment before each version is released. You have the ability to configure test scenarios and test data specific to your business requirements, and these tests will be run automatically before your environment recieves an upgrade - with any failures automatically reported back to the vendor to be addressed.
Cloud-based technologies also allow you and your teams to focus on your core competency: wowing your customers and providing a great consumer experience. Your company is in the business of keeping your customers happy - when did managing servers and technology infrastructure become a requirement for modern business?
SaaS solutions let you get back to doing what you do best. Leave the technology to the companies who specialize in software and infrastructure. Think about it: who is better suited to manage software? Your team, or the vendor that built that solution? They know their software inside and out, and software vendors are full of nerds very good at managing systems. Let those providers be the ones to worry about meeting your company's SLA requirements, not the other way around.
As you can see, cloud-based SaaS solutions have many benefits and allow companies the freedom to perform real work and not spend all day fighting technology fires. And with the proliferation of cloud technologies, SaaS solutions are ready for modern-day business requirements. To stay competitive in your market, you need to be adopting cloud supply chain solutions today.
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