Published on the 15/10/2013 | Written by Newsdesk
There is a rising tide of Australian organisations considering migrating their on premises ERP solutions to the cloud in order to free up capital according to listed IT services provider ASG Group…
Victoria’s Department of Environment and Primary Industries has signed an $11.5 million three-year contract to migrate its on-premises Oracle ERP systems onto a cloud-based ERP solution provided by ASG Group.
According to Geoff Lewis, ASG managing director, although Australia was somewhat protected from the worst ravages of the global financial crisis, local companies are no longer making the stellar profits they once enjoyed which in turn is having an impact on Government revenues prompting both the private and public sectors to seek out more economical technology solutions.
“We’re seeing a real interest in anything that will reduce Cap Ex,” said Lewis. He said that “it’s not really a conversation about the cloud” rather an economic analysis which was leading to the uptake of cloud based solutions which were charged on a pay as you go basis.
ASG claims that since June it has signed $97.5 million worth of new agreements – many coming from organisations opting for this more utility-style model. “We are seeing a huge amount of interest because it is compelling,” said Lewis.
He said that the Victorian DEPI’s move was triggered by the need for a technology upgrade which he described as the “perfect timing” for a move to a utility computing model, noting that organisations no longer needed to shell out capital funds for software licences, servers, storage systems or hire people to run the platforms – instead they could hand that over to an IT services company which would manage the risk, and change users based on their use of the system which was accounted for as an operating expense.
Lewis – who spent a decade working in Westpac’s IT operations – said that although IT had once been able to deliver a competitive edge, for most organisations access to applications such as ERP no longer provided any sort of technical differentiation so enterprise was willing to accept applications sold on this more commodity like basis.
For Victoria’s DEPI the transition to the cloud based ERP solution will take around six months according to Lewis. DEPI has taken out a three year contract with an option to extend that for a further two years.
