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On-Premise or in the Cloud — How Best-in-Class Deploy their Manufacturing Applications
Dick Csaplar
MAY 31, 2013 09:27 AM
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There is a continuing revolution in how IT deploys enterprise applications. A number of years ago, physical servers were the only choice. Today, on-premise physical servers are joined by virtualized servers and multiple versions of the Cloud. With this range of options, it benefits business leaders to make the best choice for their particular needs. To that end, in January 2013, Aberdeen surveyed the IT community to learn how they deploy their enterprise applications. This Blog examines a subset of those results — how the Best-in-Class deploy their manufacturing applications. The full report can be found at "On-Premise or in the Cloud &38212; How Best-in-Class Deploy their Manufacturing Applications".

In the January 2013 "Usage of the Public Cloud” survey, Aberdeen asked 126 enterprises how they deploy their enterprise applications. The survey also contained a series of questions measuring IT experience, the growth or reduction of IT budget, the amount of application downtime, and the length of time to deploy a new application. Organizations whose responses constituted the top 20% of returns from IT investments, comprise a group we call the Best-in-Class. Comparing this high-performing subset of respondents to the remaining performers reveals how they stand out in the deployment of their manufacturing applications.

Fifty percent (50%) of the Best-in-Class chose a Cloud deployment option for their manufacturing applications (Figure 1). This stands in stark contrast to All Others, which chose in-house deployments at a 74% rate.

bar graph showing deployment choices

Source: Aberdeen Group, January 2013

Best-in-Class choices include the following five trade-offs:

On-Premise: Physical versus Virtualized Platform — A considerable number of enterprises (46%) still deploy their manufacturing applications in the traditional way — on an in-house server with no virtualization software. However, the Best-in-Class report a higher percentage of in-house deployments on virtualized servers (34% vs. 21%). Virtualization brings many benefits to almost any application, including: server consolidation, faster application deployment, and disaster recovery. Even the largest applications can gain from virtualization's advanced features. However, the fact that only 26% of those with in-house manufacturing applications have virtualized them shows that companies need to do more to ensure their application is performing at peak performance.

Traditionally, manufacturing applications were considered departmental-specific functions. However, this is changing as companies slowly begin to view them as strategic assets, delivering corporate value and competitive advantage. The value provided by applications supporting product development, quality, and supply chain management are all good examples. Manufacturers increasingly rely on these applications to automate labor, ensure the accuracy of complex calculations, and provide deeper insight into processes. Manufacturing operations are now viewed as strategic functions, and most organizations are willing to use new technologies such as virtualization (and its ability to gain high application uptimes) or the Cloud to support these processes.

On-Premise versus Public Cloud — Fifty percent (50%) of Best-in-Class manufacturing applications are deployed in the Cloud versus just 25% for All Other respondents. The use of the Public Cloud to host manufacturing applications is making in-roads into companies of all sizes. By using this deployment method, the Best-in-Class gain the Cloud advantages of reduced cost, easier application management, and increased application availability. Manufacturing applications generate some of the most sensitive data that a corporation produces. However, that half of Best-in-Class organizations deploy these applications outside the company firewall on a third-party computing infrastructure, suggests that they are satisfied that this data is safe and private.

Cloud: SaaS — Twenty-five percent (25%) of the Best-in-Class deploy manufacturing applications as SaaS applications versus just 9% of All Other respondents. SaaS deployment brings many benefits to the enterprise IT organization, including ease of deployment, not having to pay for the supporting computing devices, and professional software support. SaaS is easy to deploy, requiring internal IT involvement, except to ensure access to the internet. Organizations that want basic application functionality can easily choose this low-priced offering.

Cloud: Hosted — Sizable minorities of both Best-in-Class (8%) and All Others (9%) have their manufacturing applications hosted in the Cloud by third-party suppliers. This option can be as easy as a SaaS deployment as the hosting company provides the computing infrastructure and application management. Aberdeen expects this number to grow as other classes of applications have Cloud-hosted solutions at twice these levels.

Cloud: Hybrid — The Best-in-Class also lead in the selection of this form of Cloud computing, with 17% deploying manufacturing applications in hybrid platforms. Hybrid Cloud is the newest form of Cloud computing. Hybrid solutions can be complex, requiring specialized IT skills for implementation, including the use of new Application Programming Interfaces (APIs) that are supported in the Cloud but not widely known by software writers. However, the Hybrid Cloud offers benefits such as failover functionality if the in-house platform is overwhelmed by a spike in demand. Aberdeen expects to see this form of Cloud computing grow as it is better understood and companies learn to trust their Cloud providers.

Several years ago, deploying enterprise applications on a physical server was the only choice. Today, there are more options to meet an organization's exact needs. Examine the deployment platform choices and choose the one that maximizes the goals of your company.

by Dick Csaplar
Senior Research Analyst, Virtualization and the Cloud
IT Infrastructure Group
Aberdeen Group

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