Which Hosting Scenario Is Best for Your Business?

9/5/18 2:49 PM

Small business owners spend most of their time running their businesses, not learning about technology. Sometimes the topic of hosting options for their ERP seems baffling.

Of course, your ERP system needs to run on a computer, or a server. If that server is in one of your buildings, it's an on-premise system. If it's hosted somewhere else, it's on the cloud. As someone wryly explained, "The 'cloud' means using someone else's computer." 

So this article is an explanation of the various hosting options on the cloud. 

Cloud Hosting Scenarios

You've no doubt heard the terms "shared hosting", "dedicated hosting" and "multi-tenant hosting." But what distinguishes one from another? Here are some quick definitions:

Dedicated Hosting

Dedicated hosting allows you to lease your own individual server from the hosting company. It's all yours. In this way, you can lease the bandwidth you need to handle your requirements for storage, speed, and performance.

Dedicated hosting is more expensive than the other hosting options, which is its biggest drawback. However, your ERP is the very lifeblood of your business. There's no room for corner cutting or skimping.

Shared Hosting

The standard definition of shared hosting is that it is "web hosting in which the service provider serves pages for multiple websites, each having its own Internet domain name, from a single Web server." When applied to your ERP environment, shared hosting puts your business's very backbone (your ERP) on a shared server.

It has one principle advantage, and that is cost. Shared hosting will cost you less.

It also has one principle disadvantage: performance. For an ERP, shared hosting may not provide an optimal solution. That's because the shared host consists of only one server. As traffic increases, that server can be taxed beyond its capacity to operate at maximum speed and efficiency, and that means the performance of your ERP might be compromised.

Even if your traffic isn't responsible for overtaxing the server, your ERP's performance can still be affected by the other "occupants" of the shared server. If you're running a robust ERP solution such as SAP Business One, your business requirements may not be met within the shared hosting scenario.

Multi-tenant Hosting

The final solution of the three is multi-tenant hosting. Since it gives you a better price than dedicated hosting and better performance than shared hosting, it's a great compromise for many companies.

Public clouds like AWS (Amazon Web Services) and Alibaba Cloud give you all the bandwidth and capacity you are willing to pay for, but host everything in their data center(s). You're not necessarily sharing a server with other systems, but you are sharing a server farm.

No matter how complex your needs are, a multi-tenant hosting scenario can accommodate you. Moreover, companies like AWS and Alibaba offer all of the latest and greatest technology, as well as state-of-the-art security. Which brings us to the next point.

Is The Cloud Secure?

This is the question we frequently hear. Oddly, while seemingly counter-intuitive (a March, 2018, survey of IT professionals, 56% said that they believed that their on-premise systems had superior security than comparable cloud-based systems), many experts believe that hosting in a public cloud is the most secure environment you can use.

That's because:

  • Major cloud providers have everything to lose from a data breach. As such, their investment in security in unmatched.
  • The breach of a cloud doesn't mean an intrusion into your data. AWS, Alibaba Cloud and the other major hosting companies have thousands of tenants. The likelihood that any one particular tenant's database would be invaded before the breach was discovered and remediated is remote.
  • Because the major cloud providers have invested so much in security, hackers are now targeting small, on-premise databases more than ever.
  • The cloud insulates you from intentional breaches by disgruntled employees, the "inside job" factor.


In short, the decision whether or not to put your ERP in the cloud should not be based on security concerns. Given the cost structure of hosting vs. the expense of maintaining your own infrastructure, the question is not whether or not you should move to the cloud, but which cloud configuration is best for you.

This article presents and explains the three major options. To the average businessman, the decision may be daunting. Fortunately, there are professionals out there who can help you. Don't hesitate to engage your solutions consultant to help you find the cloud hosting scenario that will provide optimal results for the ERP you rely on to run your business.

Overwhelmed with the effort of getting an ERP? Here's how cloud makes things easier.

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