Benefits of hosting ERPNext on cloud server

We have been providing software solution in Bahrain market since 2011. For past 3 years our flagship product has been ERPNext, a holistic business operation enterprise resource planning software. It has all the modules needed for any type of business. The prime modules are Buying, Selling, complete Accounts (including Bahrain & GCC VAT), Stock, Human Resource and more. We cater to retail, distribution, manufacturing, healthcare, construction and education sector. Most of our clients in Bahrain are those who already have some type of accounting/ERP software. And almost all of these software are either installed on user PC or on local server within the premises. Installation of ERPNext on cloud is a futuristic way to go about in harnessing the power of the software.

Here are few of benefits of hosting ERPNext on cloud server versus ERP/Accounting system that are installed on local servers.

1. Hardware and Setup Cost

The Microsoft based software (majority) are mostly power, processor and RAM hungry. Many a times we have seen accounts software like Tally running on Xeon processor server with as high as 32 GB RAM. All this adds up to high cost to just get the server running. Some of the initial hardware cost in Bahraini Dinar are

i. Server: Dell T30 or R230 is the regular server deployed in Bahrain. Cost varies depending on processor, RAM and RAID requirement. It can fluctuate from BD 500/- or high as BD 1200/-. The hardware is dictated by the service provider hence client has no other option than to pay up.
ii. Microsoft Windows Server License: The Windows 2019 Server is currently priced at BD 360/-. Additional cost such as CAL may come up.
iii. Anti virus: A good Anti Virus for would cost about BD 30/- annually.  Leaving server exposed can lead to attack from external party.
iv. Power Backup: Well, you cannot have your business operation at risk just because your server is down due to power. You need to invest in a good battery backup system. An APC 3000kV would sink you by about BD 400/-.
v. Rack, Switches, Patch panels, patch cords, installation/configuration etc: Add additional BD 350/- to BD 400/- to the mix.
vi. Windows based PC: All the users would need to have Windows 7/10 based machines to work from. Each Windows 10 operating software cost BD 65/-. So multiply 60 to number of terminals in your company. Usually existing user would be having Windows based PC so additional cost would be for new PC.

Then there is need to find space within the premises put up system. Power and internet connection cables need to be layed to the location, if not available. It would take about 4-5 days to assemble all parts and cable laying. Only after this would the ERP be installed. So before you even benefited 5 fils from your ERP you have sunk approximately BD 1800/- (US$ 500) into just the hardware purchase and installation.

ERPNext benefit

All the above do not apply when hosting ERPNext on a cloud server, except maybe anti-virus. The cloud service is based on pay as you go basis. The initial cost is proportionate to your business needs. A cloud server can be created in minutes, ERPNext installed in few hours and basic company information can be added to get the system rolling. Business can start benefiting within a day of investing money. Return On Investment can calculated in short time through various saving and benefits.

2. Maintenance Cost

The server machines need constant power, cooling and data connection. This is in addition to ad-hoc/regular maintenance that needs to be conducted. Electricity cost in Bahrain has been increasing annually for past 4 years. We are expecting the final hike to take place in March 2019. These machines are power hungry leading to increase in electricity cost to the business. Depending on the size of your business and co-related to the installed hardware business can expect nearly 20% to 30% increase in monthly electricity bills.

ERPNext benefit

Cloud server subscription cost include access 24X7 access. Business owners don’t need to worry of power outages and electricity bills. They also do not need to worry about the maintenance cost of keeping their server in best of health. There is no maintenance that needs to be done on cloud server. The cloud server provider ensures automatic update and refresh of operating system (not ERPNext) as needed.

3. Productivity Cost

Local server can go offline or shutdown for many reasons. This leads to loss of productivity. The cost is directly proportionate to task that can’t be completed and also loss of sales due to delay in providing customer with the required service or product.

ERPNext benefit

Cloud server assure 99.9% uptime. This includes data connection and having the server powered-on 24X7. As long as your devices are able to connect to internet you can be assured of being able to complete task which are related to the ERP.

4. Scalability

As your business grows the hardware requirement goes higher. In order to benefit from daily use of your ERP you would need to purchase more hardware, install and configure it. It takes both time and money to achieve the result. Then there is good possibility of not being able to get the appropriate hardware due to change in technology. Example: if your server is using DDR3 RAM then the possibility of being able to find RAM of similar specification is very low. Even if you do find then the cost would be much higher than that of the latest version let’s say DDR4. Finally there is maximum ceiling of scale. You would be able to increase RAM and hardware but the processing power cannot be increased as per you need. Your best alternative solution is to go for fresh hardware. This will bring in additional cost of software and data transfer. It is not assured that the transfer would be smooth or how much time it would take.

ERPNext benefit

Cloud servers can be expanded anytime with just one click. Customer do not have to invest heavily into the hardware. Cloud server expansion can be done based on need. As new need arises servers can be expanded (processor power, RAM & SSD) which eradicates the requirement of purchasing hardware which the business would not utilize fully. The time for expansion is in minutes rather than days.

5. Global Access

With local server you would need to have a static IP/VPN/DDNS or any other method to access the system from remote location. Your remote connection PC may require installation of dedicated software to connect to database on your local server. All these solution have financial cost and time. This would also require regular maintenance.

ERPNext benefit

The cloud servers offer a static IP for each machine. Cost of IP is inbuilt into the subscription which is very negligible. Whenever we create a new cloud server a static IP is added to it. Bahrain ISP charges anywhere between BD 5/- to BD 10/- per month per static IP. Customers have to make a request through web portal or in most cases walk into a retail shop. Once a form is filled it usually takes 3 day to get the IP address, provided there are no public holidays. ERPNext is accessed through web browser (Chrome, FireFox, Safari, Edge etc.) hence there is no local installation. Even if you purchase a new desktop, laptop, tablet or mobile phone you can connect to your ERPNext through any of the above browsers which are pre-installed with the operating software.

6. Security

This is an aspect very often ignored by many companies in Bahrain. Feeling of security is paramount just because the system admin has installed off the shelf firewall/VPN. If the configuration is not up to standard then gaining access by through remote or locally can be achieved with relative ease. A hacker may gain access to the local server if any of the laptop/desktop that is connected to the server is compromised. There is lot of learning to be had from the case of hacker accessing and moving out 10 GB of data by hacking into an internet-connected fish tank. 10 GB data for a medium sized company in Bahrain can be past 5+ years of business activities.

ERPNext benefit

The cloud servers always have higher level of security than those of local server. Due to the scale of cloud business our clients are able to afford it a very minimal cost. The cloud data is never affected if situation of computer being affected by virus, malware etc. occurs.

7. Disaster recovery

An extremely good backup mechanism of data should always be kept as top priority. Local server can be tuned to create automated backup on separate  drive. The go to method is purchasing server with RAID 5. However, RAID 5 servers are more expensive than RAID 0. It also needs technical skills to configure the system and to be able to create and maintain backup periodically. Further, the IT administrator needs to often check if the system is creating backup at the set frequency. This form of data storage can be costly and time consuming. Recovering from a disaster situation can take a day to many weeks depending upon how severe is the disaster.

ERPNext benefit

All our cloud server installation have default image back-up on daily basis. This means that not just data but the whole image of the machine is created. In case of disaster, which is remote, we are able to bring the customer back online in less than 30 minutes of being informed. Data loss is minimal to one day. Based on client needs we can have an extra layer of backup mechanism. This is to ensure maximum of just an hour of data loss is expected as mentioned in this post.

These are some of the benefits of hosting your ERP on cloud. At 9T9 IT we provide an easy to use and highly customizable ERP that is complaint to Bahrain VAT (Value Added Tax). Contact us to learn more about benefits of ERPNext and how it assists in increasing sales/revenue and lowering cost. Test drive ERPNext for Bahrain here

We are the only Bahrain service provider who allows potential clients hands on independent testing before they make any decision on buying our ERP service.

9T9 Information Technology

Office 11, Building 178, Road 3407,
Mahooz, Manama 334
Phone: +97317180292
Secondary phone: +97338880222
Muzammil Nasir

Managing Director of 9T9 IT - Bahrain. A self taught coding geek and an expert at automating business process to save cost, improve efficiencies and bring out standardization.

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