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Understanding the Different Types of Cloud ERP

Understanding the differences between a public, private, and hybrid cloud model and why it matters.

Cloud computing is steadily becoming an accepted standard choice for data-driven business operations. In addition to other numerous benefits, it is used to streamline workflows, share documents, manage machine learning algorithms, and efficiently scale software applications. But these are well-known facts. What is not usually understood is that there are many distinct types of cloud platforms suitable for different types of operations.

This post will explain the difference between public, private, and hybrid cloud solutions, in which markets these three types of cloud are used, and how to pick the type of cloud platform that's right for you.

Public Cloud ERP

The public cloud ERP refers to the cloud computing model in which all the resources essential to run the infrastructure, like servers, storage, networking devices, and supporting applications, are owned and operated by a third-party cloud service provider and are accessed by users via the internet.

It is regarded as a multi-tenant cloud wherein you share the infrastructure with other users or cloud tenants. This model guarantees each user a part of all resources and keeps their data and workloads separate using secure virtual machines. The public cloud services follow the pay-as-you-go model, whereby users pay only for the resources they use.

Public clouds are the most popular cloud computing model used by businesses of all scopes. It is best suited for applications with high scalability and predictable computing requirements, IT and business operations services, and software development and test environments. Examples of public clouds include Microsoft Azure, Amazon Web Services (AWS), Google Cloud Platform (GCP), and IBM's Cloud.


  • On-demand scalability – The vendor keeps several resources available to enable users to scale up the capacity during peak times and scale down again later.

  • Affordability – Shared resources make the public clouds more affordable than other types of cloud ERP. It follows the pay-as-you-go model, where users pay only for their services.

  • No maintenance – The third-party vendor takes care of the deployment and maintenance of cloud services. Users don't have to employ a big in-house team of IT experts to run, manage, and optimize the environment.

  • Increased cost agility – Cost agility enables companies to follow lean growth strategies and shift their focus of investments to innovative projects.

  • High reliability—a vast network of servers ensures against failure.


  • Limited technical control – Minimal visibility and control into the infrastructure may not fulfill your compliance needs.

  • Lack of control over security – End users have no control over how their vendor implements cloud security or where the data is stored

Private Cloud ERP

The private cloud is a computing infrastructure dedicated to use by a single organization. It can be physically located at your organization's on-site data center or hosted by a third-party service provider. Private clouds offer a significantly greater level of control over the system by the organization than a public cloud. Companies themselves handle the hardware and infrastructure maintenance, and the system resources are isolated to a secure private network so that nobody from outside can access them.

Greater visibility and control of the infrastructure are the main reasons for using a private cloud. This makes it a preferred option for government agencies, enterprise companies, highly regulated industries, legal and financial organizations, or any other large-size firms with business-critical operations seeking more control over their environment. The most popular examples of a private cloud are Microsoft, HP Data Centers, etc.


  • Exclusive environments – Private clouds are for the use of single organizations. Any other organization can't access the secure and dedicated environments.

  • Great flexibility – Private clouds are highly flexible and can transform their infrastructure according to the evolving business and IT needs of the organization.

  • Efficient security – Since cloud tenants don't share infrastructural resources with each other, there is no threat of external cloud misconfiguration or breach. Besides, companies can fully implement and manage their security solutions.

  • Better regulatory compliance – Since everything is located and maintained on-site. Companies get complete control over what is going on with the system. This makes it easier to conform to strict, essential governance and privacy rules for confidential information and workloads.


  • Limited mobile access – Due to stringent security measures, mobile users may have limited access to the private cloud.

  • High cost – A private cloud is an expensive solution and comes with a considerably high total cost of ownership, or TCO, compared to other types of cloud ERP, especially in the short term.

  • Scalability limitations – Private cloud infrastructure can be scaled as needed sans trade-offs. However, the infrastructure may be unable to scale to meet unpredictable demands if the cloud data center is limited to on-premise computing resources.

Hybrid Cloud ERP

As the name suggests, a hybrid cloud is a cloud computing environment combining on-premises infrastructure – or a private cloud – with a public cloud. The hybrid cloud ERP incorporates the higher security of the private cloud with the more efficient scalability of the public cloud. This platform gives companies numerous advantages, such as more flexibility, deployment options, security, and compliance.

When computing and processing demands vary, hybrid cloud computing allows companies to smoothly scale up their on-premises infrastructure to the public cloud to manage any overflow without enabling third-party data centers to access all their data. Companies might also want to use public clouds for workloads and data that are not so sensitive and switch to a private cloud environment for confidential information. Hybrid cloud solutions are a good choice for companies that operate in vertical markets. Examples of this model include Microsoft Azure and Amazon Web Services (AWS).


  • Cost-effectiveness – Private and public clouds divide the workload. The private cloud takes care of sensitive operations, whereas the public cloud infrastructure maintains resource-demanding processes, such as streaming analytics or big data machine learning. With the ability to scale to the public cloud, companies only pay for additional computing power when required.

  • High flexibility – To unpredictable demand surges, you can quickly and effectively respond with public cloud infrastructure and scale back when the spike subsides without any effect on other workloads running in your private cloud.

  • Greater reliability – Distributing applications and data across multiple data centers, some public, some private, for highly effective redundancy, disaster recovery, and failover results in maximum safety and reliability.

  • Ease and agility – Hybrid cloud model lets you change your blend of private and public deployments in response to the evolving needs and opportunities. It also enables you to modernize legacy apps gradually, recreating and shifting to cost-efficient public cloud infrastructure over time.


  • Management – Powerful integration and compatibility between the cloud infrastructure that runs through multiple locations and categories is what businesses want. This is a restriction with public cloud deployments, for which companies have no direct control over the infrastructure.

  • Infrastructure complexity – Added infrastructure complexity is introduced due to the combination of different types of cloud infrastructure into a single system. Having more options increases complexity in terms of configuration, maintenance, and usage.

Selecting the Right Cloud ERP Model for Your Business

When it comes to picking a cloud deployment model, knowing the use case for each is important. The ideal approach to selecting which cloud solution is right for your company is to define your actual budget, needs, and priorities and then compare those to the advantages and disadvantages of each cloud model.


Private cloud resources are limited to the capacities of a company's hardware. You can deploy more private cloud resources by purchasing or renting additional hardware. On the other hand, public cloud resources are limited to a company's financial resources. They can handle as much as a company needs. A hybrid cloud allows you to use operating expenses to scale out on the public cloud or capital expenses to scale up a private cloud. You can choose one based on the situation.


Due to multiple customers using the same infrastructure and different access points to the system, public clouds are more sensitive to security threats. Conversely, public clouds are more secure. A hybrid cloud is a combo. Companies get a lesser case of split responsibilities and have some control over private cloud infrastructure. You can distribute the workload across private and public clouds as per the compliance requirements, security policies, and other regulations.


When it comes to cost, public clouds operate on a pay-for-what-you-use model. It is more flexible and cost-effective. Private cloud platforms come with a huge price tag. It is a great choice if your workload is reasonable and security needs are strict. Hybrid cloud costs combine private cloud expenses with the public cloud's model. It is the best choice in terms of cost-effectiveness since you can manage the workload and allocate resources as per the current

business requirements.

Final Thoughts

The effective use of different types of cloud ERP platforms totally depends on the understanding of the requirements and objectives of a company and what different options have to offer.

If you have any further questions or need help with your cloud migration, book a free consultation with the Kwixand Solutions team. We are a Silver Microsoft Partner based in Vancouver, BC, Canada, and we help businesses in the US and Canada digitally transform and achieve their goals.


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