Why Rent What You Already Own?

Does your organization “own” perpetual licenses for your ERP software? Do you have aging on-premise servers in an IT closet somewhere in your business and wonder if now is the right time to venture into the cloud? Are you feeling pressure from certain vendors to migrate to subscription-based software agreements in the cloud? You are not alone if you’re overwhelmed with cloud strategy decisions. Navigating the options and mixed messages from solution sales representatives is confusing; and while deciding factors are different for each customer, I like to lead the conversation with, “why rent what you already own?”

The popularity of cloud-based solutions has grown exponentially since its mainstream introduction over a decade ago. This, however, has not made on-premise solutions, like Dynamics GP (Great Plains), obsolete. In many ways, there is incredible value and benefit in continuing to leverage the perpetual license model. I have had plenty of conversations with customers during annual enhancement assessments where the calculated cost to continue with an “owned” software option is significantly less than the alternative to “rent” a comparable cloud-based ERP solution. Factoring in soft costs of change, like ramp time for user adoption and existing integrations/reporting demands that don’t easily make the transition to cloud, can blow any budget and create chaos for your business. I am not anti-cloud, in fact, I am quite the opposite. I firmly believe that every business, small, large or in between, should have effective cloud solutions as part of its overall IT strategy.

However, as a recovering CPA and former CFO tasked with managing resources and budgets for IT, I understand the challenges of the cloud and suggest customers first educate themselves on the difference between Infrastructure as a Service (IaaS) and Software as a Service (SaaS). You don’t have to be deep in the weeds of IT or understand all the geek speak of IaaS and SaaS to know sometimes it better to rent and sometimes it’s better to own, and often a hybrid approach is the best financial. You can apply the same business logic used in your organization’s decision to lease office space while perhaps deciding to purchase certain furnishings outright. If you like the ERP software you own today and the demand of moving IT to the cloud is imminent, consider simply putting that solution in the cloud infrastructure you rent, like Azure or AWS. In this case, there is no need to compound monthly ERP subscriptions with the costs of the infrastructure – you will likely save money while also achieving your organization’s cloud objectives.

GP Isn’t Going Anywhere – Microsoft Is Committed

It hard to objectively have the “rent” versus “own” discussions without specific mention of Dynamics GP. There is tremendous passion in the GP community and in all likelihood if you are a user, you don’t want to make a switch from GP. Of all Dynamics ERP solutions from Microsoft, GP is the most feature rich and has the highest customer satisfaction and solution retention rate. That said, there’s still a chance you’ve been contacted by Microsoft, or someone purporting to be from Microsoft, encouraging you to consider transitioning your existing GP to a cloud-based Dynamics 365 ERP solution. This is undoubtedly an effort to get as many customers on recurring revenue subscriptions as possible – clearly advantageous for Microsoft and the vendor sales agent.

Aside from sales tactics that may suggest something to the contrary, Dynamics GP isn’t going anywhere anytime soon. In fact, since the October 2019 release, Dynamics GP has the same Modern Lifecycle commitment from Microsoft as its cloud-based Dynamics 365 brethren. This shift from Fixed Lifecycle support (with a defined de-support/sunset date) to Modern Lifecycle support with no end in sight signals Microsoft intends to continue enhancing and supporting the solution. Because of Modern Lifecycle, users have and should expect to see more frequent updates to GP. These GP updates are easier to manage and deploy versus larger version upgrades you may be accustomed to historically. GP is in good company with Office 365, Power BI, Azure, and Dynamics 365 – all given the assurance of Modern Lifecycle.

So, if you currently “own” Dynamics GP, don’t feel pressured into thinking you need to start “renting” a new solution. Instead, make sure you are up to date so that you can fully leverage the benefits of the Modern Lifecycle Policy and everything GP has to offer. If you have questions or need assistance with an upgrade or moving your GP solution to a cloud hosting provider, don’t hesitate to contact me at brian@keelcompany.com or 757.227.6867.

Share on Social

Share on LinkedIn Share on Twitter Share on Facebook