Cloud-based supply chain software has really started to gain traction, especially in such areas as Transportation Management Systems (TMS) and Global Trade Management (GTM) solutions, though the wave is impacting every area of software. What is driving this overall interest in the Cloud? A variety of factors, including: Reduction in Internal IT Resources to Manage the Application in a Cloud Deployment: Most of this work is taken on by the "hoster" for database maintenance, system tuning, etc. In their supply chain predictions for 2016, the analysts at Gartner stated that "By 2020, over 90% of spending on supply chain execution systems will be for Cloud-based solutions." More Rapid Deployments: This often reduces implementation costs and accelerates "time to value," and increasingly important consideration. Lower Upfront Costs: With Cloud, the cost model often moves from a large upfront license payment and then annual software maintenance fees to low upfront costs paired with a subscription type model, usually based in part on the level of "transactions" processed, however they are defined. With TMS, for example, a transaction may be equal to a shipment. This "pay as you go" model is attractive to many companies. Easier Upgrade Path: With Cloud deployments, the software provider often takes care of regularly upgrading system capabilities, whereas the cost and pain of upgrading on-premise solutions often means companies go many years stuck on the same version of their installed software. Of course, Cloud-based software is no panacea. Depending on the application and deployment model, there may be little opportunity to "tailor" the Cloud-based software to meet individual company needs. Some also believe in the end companies actually wind up paying more over time under the subscription model – though SCDigest has a recommended approach to that issue. (See Calculating the Costs of On-Demand vs Traditional Supply […]