Before Covid-19 began its march across the globe in early March of 2020, the U.S. economy was surging, and unemployment was at a post WWII-era low of 3.8% according to data from the Federal Reserve Bank of St. Louis.
At the outset of the pandemic, companies with EDI systems from the 1990s were able to meet the requirements of new trading partners with talented staff who could apply crafty band aid solutions. In the current economy, most legacy systems are reaching the point where the time devoted to designing workarounds has begun to cut into the time needed to complete real work.
If this sounds familiar, you've likely begun to think about which B2B integration (EDI/MFT/EAI/API) solution is going to best position you for resuming “new normal” operations and preparing your environment to withstand the next Black Swan event.
We get it, it’s not a simple choice.
It involves dozens of interlaced decisions, hours of gap analysis, and even more hours to prepare and present reports to stakeholders and decision makers who may not immediately understand the basic functions and role of EDI and other integration protocols or grasp the urgency to modernize in a digitally-driven economy.
Yet before you reach that stage in your transformation journey, the first question you’ll want to tackle is: Where will your integration software live?
Our previous post explored why it makes sense for some firms to choose an on-premises B2B integration solution. In this post, we examine the differences between the major cloud B2B integration approaches, and why of them could be the best choice for your organization.
Private, Public, and IPAAS Cloud: Which Should I Choose?
To begin, let’s review the major flavors of cloud hosting and some of the pros and cons of each model:
Public Cloud: Public cloud examples include AWS, Azure, and RedHat. To understand how a public cloud differs from a private cloud, think of an apartment building. While your apps and data are shielded from other tenants, you share computing services which makes the public cloud a cost-effective solution if you don’t want to make a large upfront investment in hardware and infrastructure.
PROSMoving to a public cloud can reduce IT operations costs because public cloud providers can maximize their hardware usage and sell unused capacity to multiple customers.
Also, internal teams don’t have to spend time managing servers. Along similar lines, small to medium sized businesses without the resources to implement strong security measures, can outsource some aspects of cyber security to a larger provider with more resources.
CONSThe multitenant nature of a public cloud likely won’t fly for businesses with strict regulatory compliance standards. Even though most cloud providers follow stringent security standards, the miniscule risk of data leakage may be outside the comfort zone of some players in specialized industries.
The most glaring downside to the flexibility and cost savings of cloud technology is vendor lock in. By renting the vendor’s machines, storage, and access to your applications, you’re putting the maintenance of your business operations in the hands of a third-party.
Only your company can decide if the benefits of going public cloud outweigh the risk.Private Cloud: While growth continues to slow for private cloud services, Grandview Research estimates the market will be worth at least 60 billion by the end of 2020—large enough that companies including Hewlett Packard Enterprise, VMware Horizon, Dell EMC and IBM compete for a share of it.
Compared to a public cloud, maintenance and other support requests get resolved sooner since queue priority is one of the benefits you’ll pay more for Private cloud services are more like renting a house—you don’t have to share the resources you rent with other tenants.
Because you either own the servers (if you maintain an onsite data center) or pay to host them offsite, your staff (or skilled contractors that report to you) configures and maintains the hardware thus giving you more control.
Lastly, private clouds offer a level of security protocols and protection from hacks and data theft superior to what most companies can implement on their own. In fact, for many companies who choose this route— Remedi clients included— the best in class and continuously updated security policies and processes baked into the business model of private cloud providers make them the safest option.
You have the cloud to yourself, but you’ll pay for the privilege. While more cost-effective in purely financial terms than on-premises, many companies who’ve gone the private (or public) cloud route aren’t necessarily full-throated advocates.
According to a cloud computing study from Bain and Company, many customers report disappointment with not seeing the savings they expected after completing their cloud deployments.
IPaaS Integration Platform As A Service: To be clear, IPaaS is not a hosting option per se. We bring it into the conversation because companies often rely on IPaaS for their data integration needs via a private or hybrid cloud (a model which we’ll explore in a future blog).
Several credible companies out there are developing and supporting IPaaS tools, which is reassuring from an investment standpoint. It’s also a challenge for reasons we discuss below.
The model is efficient and flexible, and a way for smaller firms or those behind the digital transformation curve to get agile faster at a lower cost of entry. For example, a typical IPAAS use case involves companies using it to exchange common data within both ERP and CRM systems.
IPaaS is ideal In situations where the organization wants to conserve IT budget and minimize effort while it quickly improves the quality of their data integration and hones their ability to efficiently reuse source data across their organization.
The large pool of trustworthy vendors offering cloud-based integration tools— Boomi, Mulesoft, and Informatica to name a few— can make selecting the right one confusing.
The main problem is a lack of clarity around the base level features to expect. It’s up to you to identify the applications and data sets you need to connect and share, and then compare offerings. Some vendors may offer features you’re required to pay for but that you may not need, or at least not now.
Going forward, the increasing need for companies to deliver an omnichannel, always-on experience for customers and trading partners will make cloud deployment a key part of your integration strategy, if it isn’t already.
The good news is there’s no shortage of qualified public and private cloud providers to choose from, and it’s reasonable to expect that cloud vendors, public in particular, will improve their offerings as competition for market share increases.
Speaking of integration options, in our next post we’ll look in depth at the hybrid delivery model.
In the meantime, you might find the previous posts in our series helpful:
Remedi Electronic Commerce Group helps companies save time and money, provide a better customer experience, and quickly respond to new opportunities using integration and B2B ecommerce solutions built for a digitally driven economy.