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By Mini Peiris
The Cons
Single tenant. Some hosted applications are built on a "single-tenant" architecture. They will encounter many of the same cost problems experienced with traditional software. Although they've managed to outsource their application, they haven't taken advantage of the massive cost savings that can be realized when multiple customers share the same application and hardware. The latest generation of hosted providers has been built on a "multi-tenant" architecture, which allows the vendor to maximize the efficiencies of scale using a shared application and shared hardware.
Cookie cutter. An early criticism of hosted software is that they were “too vanilla” and couldn’t be tailored to fit companies’ business processes. In addition, extensibility and integration was cumbersome. However, some hosted providers have closed this gap and now offer customization platforms that are extremely robust and make integration and extensibility as easy as point-and-click
Outages. Although rare, there is always a possibility that an outage may occur. This is why many hosted providers build in “uptime guarantees” within their service level agreements (SLAs). Some vendors offer a “99.5 percent uptime or money back” guarantee or similar. With competition in the hosted space growing at a steady rate, reliability will keep improving. The presence or absence of a guarantee on uptime should be an element considered when selecting an on-demand provider.
Accessibility. Just as much as it’s a Pro, accessibility can also be a Con if one does not have access to an Internet browser.
The rapid increase in businesses adopting hosted software are an indication that the "Pros" are outweighing the "Cons" for a growing number of companies. To help compete in a global market, SMBs require the resources that have traditionally been available to only enterprise companies. Hosted software—especially integrated accounting/ERP, CRM and Ecommerce suites—provides this resource to them at an affordable price. So no longer are we in a wait and see phase—we’re now in a “go for it” stage.
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