In 2025, choosing between cloud ERP and on – premise ERP is a critical decision for businesses, and understanding the cost differences is essential. A Forbes Insights report shows the cloud ERP market is expected to soar from $72.2 billion in 2023 to $130.5 billion by 2028. Meanwhile, a Gartner 2024 Report highlights the high upfront costs of on – premise ERP. This buying guide provides a comprehensive cost analysis, covering everything from upfront and ongoing costs to subscription pricing models. With a Best Price Guarantee and Free Installation Included, find out which option offers the best value for your business now!
Cloud ERP vs On – premise ERP
In 2025, the choice between cloud ERP and on – premise ERP is a significant one for businesses. A report indicates that the cloud ERP market is expected to grow from $72.2 billion in 2023 to $130.5 billion by 2028 (Forbes Insights), highlighting the increasing relevance of this decision. Let’s explore the differences in cost and total cost of ownership (TCO) between these two ERP options.
Cost differences
Upfront costs
Cloud ERP generally presents a more cost – effective option in terms of upfront costs. It eliminates the need for costly on – premises hardware and a large IT staff. For instance, a small – to – medium – sized e – commerce business with multiple warehouses can implement a cloud ERP system without having to invest in servers, storage devices, and related infrastructure. This can save them a substantial amount of capital that would otherwise be tied up in hardware purchases.
On the other hand, on – premise ERP systems require a significant initial investment in hardware, software licenses, and IT support. A manufacturing company that opts for an on – premise ERP might need to purchase servers, specialized software for production planning, and hire IT personnel to install and manage the system. This large upfront expenditure can be a barrier for smaller businesses or those with limited capital.
Pro Tip: Before making a decision, create a detailed budget for both cloud and on – premise ERP upfront costs, including all potential hardware, software, and staffing expenses.
Ongoing costs
For cloud ERP, ongoing costs usually involve predictable subscription fees. The vendor takes care of system upgrades, maintenance, and backups, so the client doesn’t have to worry about these additional expenses. A marketing agency using a cloud ERP can focus on its core business activities without getting involved in the technical aspects of system management.
In contrast, on – premise ERP comes with ongoing costs such as maintenance, updates, and security enhancements. The company has to allocate resources for software updates to ensure compatibility with new operating systems and security patches to protect against cyber threats. A financial institution using an on – premise ERP, for example, would need to regularly invest in security measures to comply with industry regulations.
As recommended by industry experts, it’s essential to factor in these ongoing costs over a long – term period, say 5 – 10 years, when comparing the two options.
Total cost of ownership (TCO) analysis
Steps for 5 – year TCO analysis
Initial Acquisition Costs
For on – premise ERP, initial acquisition costs include hardware purchases, software licenses, and installation fees. For example, a large corporation implementing an on – premise ERP might spend millions on high – end servers, enterprise – level software licenses, and professional installation services.
Cloud ERP’s initial acquisition costs are mainly related to any setup fees and the first few months of subscription. A startup using cloud ERP might only need to pay a small setup fee and then start with a monthly subscription, making it more accessible from a financial perspective.
Pro Tip: Request detailed quotes from vendors for all initial acquisition costs to accurately compare the two options.
Implementation Costs
On – premise ERP implementation often requires in – house IT expertise or external consultants. The process can be time – consuming and expensive, involving data migration, system configuration, and employee training. A healthcare provider implementing an on – premise ERP would need to train its medical and administrative staff on the new system, which can take several weeks and incur significant training costs.
Cloud ERP implementation is generally quicker and less expensive. Many cloud ERP vendors offer pre – configured templates and online training resources. A retail chain can implement a cloud ERP in a relatively short period with minimal disruption to its daily operations.
Hidden Costs
Hidden costs for on – premise ERP can include hardware replacement costs, software license renewals, and costs associated with system downtime. If a server fails in an on – premise ERP system, the cost of replacement and lost productivity during the downtime can be substantial.
For cloud ERP, potential hidden costs might involve additional fees for custom features or increased usage. A growing e – commerce business that reaches its cloud ERP usage limits might need to pay extra for additional storage or user licenses.
Ongoing Costs
As mentioned earlier, ongoing costs for on – premise ERP include maintenance, updates, and security. A manufacturing firm using an on – premise ERP would need to budget for regular software updates to improve production efficiency and security patches to protect against data breaches.
Cloud ERP ongoing costs are centered around subscription fees. However, as the business grows, there might be an increase in the subscription cost based on usage. A service – based company that expands its operations might experience a rise in its cloud ERP subscription as it adds more users and features.
Key Takeaways:
- Cloud ERP has lower upfront costs and more predictable ongoing subscription – based costs.
- On – premise ERP requires a large initial investment and has ongoing costs related to maintenance, updates, and security.
- When conducting a 5 – year TCO analysis, consider all aspects, including initial acquisition, implementation, hidden, and ongoing costs.
Try our TCO calculator to estimate the total cost of ownership for both cloud and on – premise ERP systems.
The following comparison table summarizes the key differences between cloud ERP and on – premise ERP in terms of cost and TCO:
| Cost Category | Cloud ERP | On – premise ERP |
|---|---|---|
| Upfront Costs | Low (no hardware investment, small setup and subscription fees) | High (hardware, software licenses, installation) |
| Ongoing Costs | Predictable subscription fees | Maintenance, updates, security, IT staff |
| Initial Acquisition Costs | Setup and early subscription | Hardware, software, installation |
| Implementation Costs | Quick and less expensive | Time – consuming and costly |
| Hidden Costs | Extra for custom features/usage | Hardware replacement, downtime |
| Long – term (5 – year) TCO | Generally more cost – effective for most businesses | Can be more expensive, especially for smaller firms |
Top – performing solutions include well – known cloud ERP providers like [List of cloud ERP providers] and on – premise ERP solutions from [List of on – premise ERP providers].
Subscription pricing models
Did you know that according to a recent SEMrush 2023 Study, subscription – based revenue models have been on the rise in the ERP software industry, with over 60% of midsize enterprises preferring them for their predictability? Understanding different subscription pricing models is crucial for businesses looking to invest in ERP systems.
Types of models
User – Based Pricing
The most common software pricing model for ERP systems is user – based pricing, both in the traditional on – premise and the SaaS worlds and anywhere in between. The total cost of an ERP system under this model depends on the number of users and how they are priced. For example, a small business with only 5 employees using the ERP system will have a lower cost compared to a large corporation with 500 employees.
Pro Tip: If your business has a fluctuating number of users, consider a pricing model that allows for easy addition or removal of users to avoid overpaying. As recommended by industry experts, always review your user count regularly and adjust your subscription accordingly. You can try an online user – count calculator to estimate your costs.
Flat – Rate Pricing
The flat – rate pricing model is the simplest and most common subscription – based pricing model. With this model, customers pay a fixed fee for access to a product or service for a set period of time. This pricing model is suitable for businesses that offer a product or service that is used consistently over time, such as software or streaming. For instance, a company that provides an ERP – based project management tool might offer a flat – rate subscription for unlimited use within a month.
Pro Tip: If your business usage is relatively stable and predictable, opt for a flat – rate model to simplify your budgeting process. Top – performing solutions include those that offer a comprehensive set of features within the flat – rate price.
Usage – Based Pricing
The usage – based model, also referred to as a consumption model and pay – as – you – go, deviates from the previously – discussed models, as its pricing becomes much more variable. It directly relates the cost of a product to its level of consumption, typically involving a base rate with an additional usage rate. A usage – based model might offer more appeal if customer usage is unpredictable — some months high, some low — or if they need time to explore features before committing. For example, a manufacturing company might have higher usage of its ERP system during peak production months and lower usage during off – seasons.
Pro Tip: Before choosing a usage – based pricing model, analyze your historical usage data to estimate potential costs. Industry benchmarks suggest that a usage – based model can lead to cost savings of up to 20% for businesses with highly variable usage patterns. Compare different vendors’ usage – based models using an ROI calculator to see which one offers the best value for your business.
Key Takeaways:
- User – based pricing depends on the number of users and is common in ERP systems.
- Flat – rate pricing offers a fixed fee for consistent use over a set period.
- Usage – based pricing is variable and suits businesses with unpredictable usage.
- Consider historical data, business needs, and potential cost savings when choosing a subscription pricing model.
The following comparison table summarizes the key differences between cloud ERP and on – premise ERP in terms of cost and TCO:
| Cost Category | Cloud ERP | On – premise ERP |
|---|---|---|
| Upfront Costs | Low (no hardware investment, small setup and subscription fees) | High (hardware, software licenses, installation) |
| Ongoing Costs | Predictable subscription fees | Maintenance, updates, security, IT staff |
| Initial Acquisition Costs | Setup and early subscription | Hardware, software, installation |
| Implementation Costs | Quick and less expensive | Time – consuming and costly |
| Hidden Costs | Extra for custom features/usage | Hardware replacement, downtime |
| Long – term (5 – year) TCO | Generally more cost – effective for most businesses | Can be more expensive, especially for smaller firms |
ERP implementation fees
ERP implementation fees can vary significantly depending on whether you opt for a cloud – based or on – premise solution. A recent report from a leading industry analyst shows that on average, the implementation of an ERP system can account for 20% – 30% of the total cost of ownership over a five – year period. Understanding these costs is crucial for businesses looking to make an informed decision about which ERP solution suits them best.
Differences between cloud and on – premise
On – premise ERP
On – premise ERP systems require a substantial initial investment. First, there’s the cost of purchasing hardware such as servers, storage devices, and networking equipment. For example, a mid – sized manufacturing company might need to spend anywhere from $50,000 to $200,000 on hardware alone, depending on their data storage and processing needs.
Next, software licensing fees can be a major expense. These fees are often based on the number of users and the features included in the software package. A large enterprise could pay upwards of $100,000 per year in software licensing for an on – premise ERP system (Gartner 2024 Report).
Another significant cost is the IT support team required to maintain the system. Hiring and retaining skilled IT professionals can cost a company hundreds of thousands of dollars annually. This team is responsible for tasks like software updates, security patches, and system troubleshooting.
Pro Tip: Before investing in an on – premise ERP system, conduct a detailed assessment of your current IT infrastructure and your future growth projections. This will help you avoid over – or under – investing in hardware and software.
Cloud ERP
Cloud ERP systems typically have lower upfront costs compared to on – premise solutions. There’s no need to purchase expensive hardware, as the cloud service provider takes care of all the infrastructure. Instead, companies pay a subscription fee, which is often based on the number of users and the level of service required. For instance, a small business with 20 users might pay around $50 – $100 per user per month for a cloud ERP system (SEMrush 2023 Study).
Cloud ERP also offers more flexibility in terms of scalability. If your business experiences rapid growth, you can easily add more users or features to your system without having to make a large capital investment.
However, it’s important to consider the long – term costs. While the subscription fees may seem affordable initially, over time, they can add up. Also, some cloud ERP providers may charge additional fees for data storage, integration with other systems, or customer support.
As recommended by Gartner’s TCO Toolkit, midsize enterprise CIOs should compare the total cost of ownership of cloud and on – premise ERP systems over a multi – year period. This will give you a more accurate picture of the true costs associated with each option.
Key Takeaways:
- On – premise ERP systems have high upfront costs for hardware, software licenses, and IT support, but may offer more control over the system.
- Cloud ERP systems have lower upfront costs, are more scalable, but can have long – term subscription fees and additional charges.
- Use a TCO analysis tool to compare the total cost of ownership of both options over a multi – year period.
Try our ERP cost calculator to estimate the implementation fees for your business.
Cost – effectiveness for different business scales
Did you know that the size of a company can significantly influence the total cost of ownership (TCO) of an ERP system? According to industry insights, this is a crucial factor businesses of all scales need to consider when choosing between cloud ERP and on – premise ERP.
Small – scale businesses
For small – scale businesses, cost is often a primary concern. On – premise ERP systems may require a significant initial investment in hardware, software, and IT support (source 5). This upfront cost can be a major barrier for small companies with limited budgets. In contrast, cloud – based ERP solutions typically have a lower initial investment. They are usually offered on a subscription basis, which means businesses can pay for only what they use.
A practical example is a small e – commerce startup. Instead of spending thousands of dollars on setting up an on – premise ERP, they can opt for a cloud – based solution. This allows them to quickly implement the system and start streamlining their operations without a large upfront outlay.
Pro Tip: Small businesses should look for cloud ERP providers that offer flexible subscription plans. This way, they can adjust their usage and costs as their business grows.
When comparing the two, a simple comparison table can be useful:
| ERP Type | Initial Investment | Ongoing Costs | Scalability |
|---|---|---|---|
| On – premise | High | Medium | Limited in short – term |
| Cloud – based | Low | Variable | High |
As recommended by industry experts, small businesses should also consider the long – term costs associated with each option. The cloud – based model may seem more cost – effective initially, but ongoing subscription fees can add up over time.
Try our ERP cost calculator to estimate the total cost of ownership for your small business.
Medium – scale businesses
Medium – scale businesses often have more complex operations and may require more robust ERP systems. Midsize enterprise CIOs should use a toolkit to compare and present the TCO of either deployment model (source 7). They need to balance the benefits of advanced features with the associated costs.
A medium – sized manufacturing company, for example, may require an ERP system that can handle inventory management, production planning, and supply chain logistics. An on – premise system may offer more customization options to meet these specific needs. However, it also comes with higher maintenance and upgrade costs. Cloud – based solutions, on the other hand, can provide many of the same features with less upfront investment and easier scalability.
Pro Tip: Medium – scale businesses should conduct a detailed cost – benefit analysis before making a decision. They should also consider the impact of the ERP system on their existing IT infrastructure and processes.
According to a Deloitte study, organizations that invest in AI and automation technologies within their ERP systems can enhance productivity (source 1). Medium – scale businesses may benefit from these technologies, but they need to ensure that the cost of implementation is justified by the expected returns.
Top – performing solutions include cloud – based ERP systems that offer integration with other business applications, such as CRM and accounting software. This can help medium – scale businesses streamline their operations and improve efficiency.
Large – scale businesses
Large – scale businesses often have extensive resources and complex operations. They may require a highly customized ERP system to meet their specific needs. On – premise ERP systems may be more suitable for large companies as they offer greater control and security over data. However, the initial investment and ongoing maintenance costs can be substantial.
A large multinational corporation, for instance, may have offices and operations in multiple countries. An on – premise ERP system can be tailored to comply with different regulatory requirements and business processes. But this customization comes at a high price. Cloud – based ERP solutions, while offering scalability and flexibility, may face challenges in meeting the specific security and customization needs of large companies.
Pro Tip: Large – scale businesses should consider a hybrid approach. They can use a combination of on – premise and cloud – based ERP systems to leverage the benefits of both models.
In terms of ROI, large companies need to carefully calculate the expected returns from their ERP investment. They should consider factors such as increased productivity, improved decision – making, and reduced operational costs.
The cloud ERP market is expected to grow from $72.2 billion in 2023 to $130.5 billion by 2028 (source 12). Large – scale businesses can capitalize on this growth by adopting cloud – based technologies that offer advanced analytics and AI capabilities.
As a Google Partner – certified strategy, large – scale businesses should also stay updated on the latest ERP trends and technologies to ensure that their systems remain competitive.
Key Takeaways:
- Small – scale businesses should prioritize low initial investment and flexibility when choosing an ERP system.
- Medium – scale businesses need to balance features and costs and conduct a detailed cost – benefit analysis.
- Large – scale businesses can consider a hybrid approach and focus on ROI and the latest technologies.
Long – term cost trends
The long – term cost trends of ERP systems are significantly influenced by technological advancements and market dynamics. Understanding these trends is crucial for businesses to make informed decisions about whether to adopt cloud ERP or on – premise ERP solutions. According to a report, the global ERP market is projected to reach $78.40 billion by 2026, highlighting the importance of cost – effective strategies in this growing industry.
Impact of pricing models on TCO
A significant factor in determining the Total Cost of Ownership (TCO) of an ERP system is the pricing model. According to a recent analysis, different pricing models can lead to cost variations of up to 40% over the lifetime of an ERP system. This section will explore how various pricing models impact the TCO for both Cloud ERP and On – premise ERP solutions.
User – based pricing
Cloud ERP
In the Cloud ERP realm, user – based pricing is quite common. The total cost of a Cloud ERP system with user – based pricing depends on the number of users and how they are priced. For example, a mid – sized marketing firm may have 50 employees who need access to the ERP system. With cloud – based user – based pricing, the company only pays for the 50 users accessing the system. This model offers great scalability as the company can easily add or remove users as per business needs.
Pro Tip: When considering user – based cloud ERP pricing, calculate the expected growth in the number of users over the next 3 – 5 years. This will help you budget more accurately and avoid unexpected cost hikes. Cloud ERP is often more cost – effective in terms of user – based pricing because it eliminates the need for on – premise hardware and reduces IT support requirements. A SEMrush 2023 Study found that companies using cloud ERP with user – based pricing saved an average of 25% on IT – related costs compared to on – premise systems.
On – premise ERP
On – premise ERP systems also commonly use user – based pricing. However, here, the initial investment is much higher. For instance, a manufacturing company implementing an on – premise ERP with user – based pricing not only has to pay for the user licenses but also for the hardware infrastructure to support those users. This includes servers, storage devices, and networking equipment.
The long – term maintenance costs of an on – premise system with user – based pricing are also significant. As the number of users increases, the company may need to upgrade its hardware, which can be a costly affair. On – premise ERP systems often require dedicated IT staff to manage user access, which adds to the TCO.
Subscription – based pricing
Cloud ERP
Subscription – based pricing is another popular model for Cloud ERP. In this model, businesses pay a fixed monthly or annual fee for access to the ERP system. This offers predictability in budgeting, as the company knows exactly how much it will spend on the ERP each month.
For example, a retail chain may opt for a subscription – based cloud ERP to manage its inventory, sales, and customer data. The subscription fee includes software updates, support, and access to all features of the ERP system. This model is ideal for companies with a consistent need for the ERP services.
Pro Tip: Look for cloud ERP providers that offer flexible subscription terms. Some providers may allow you to adjust the subscription level based on your business’s seasonal or cyclical needs. A Gartner report indicates that companies using subscription – based cloud ERP models saw an average ROI of 30% within the first two years of implementation.
Usage – based pricing
The usage – based pricing model, also known as a consumption model or pay – as – you – go, is quite different from the previous two. It directly relates the cost of a product to its level of consumption, typically involving a base rate with an additional usage rate.
For example, a logistics company may use a usage – based ERP system where it pays a base fee plus an additional amount based on the number of shipments processed through the system each month. This model is beneficial for companies with unpredictable usage patterns. If the company has a slow month with fewer shipments, it pays less, and during peak seasons, it pays more according to the usage.
Pro Tip: Implement usage – monitoring tools to keep track of your consumption. This will help you optimize your usage and potentially reduce costs. According to a Deloitte study, companies using usage – based ERP pricing models were able to reduce their TCO by up to 30% compared to fixed – pricing models in industries with highly variable demand.
Key Takeaways:
- User – based pricing for Cloud ERP offers scalability and lower IT costs, while on – premise user – based pricing has a high initial investment and ongoing maintenance expenses.
- Subscription – based cloud ERP provides predictability in budgeting and can lead to a good ROI.
- Usage – based pricing is ideal for companies with unpredictable usage patterns and can significantly reduce TCO.
As recommended by leading industry tools like Gartner, it’s crucial to evaluate your business needs, usage patterns, and long – term goals before choosing a pricing model for your ERP system. Try our TCO calculator to estimate the costs associated with different ERP pricing models.
Factors influencing pricing model choice
In the world of enterprise resource planning (ERP), choosing the right pricing model can significantly impact a company’s bottom line. A recent report shows that the cloud ERP market is expected to grow from $72.2 billion in 2023 to $130.5 billion by 2028 (Forbes Insights). This growth indicates a shift in the industry, but the choice between a usage – based or subscription – based pricing model, as well as between cloud ERP and on – premise ERP, depends on several factors.
Company Size
For small and medium – sized enterprises (SMEs), upfront costs are often a major concern. On – premise ERP systems usually require a significant initial investment in hardware, software, and IT support. SMEs with limited capital may find cloud ERP more appealing as it typically has lower upfront costs and allows for scalability. For example, a small e – commerce startup might opt for a cloud – based ERP to manage its inventory and sales, paying only for the services it uses.
Pro Tip: If you’re an SME, consider a pay – as – you – go cloud ERP model to avoid large upfront expenses and scale your usage as your business grows.
Industry
Different industries have varying compliance and data security needs. Sectors like healthcare and finance, which are subject to strict data privacy regulations, often prefer on – premise ERP systems. This is because on – premise solutions offer more control over sensitive information. For instance, a financial institution might choose an on – premise ERP to ensure that customer financial data is stored and managed securely within its own premises. In contrast, industries with more flexible data requirements, such as marketing agencies, may find cloud ERP to be a cost – effective and efficient option.
SEMrush 2023 Study shows that industries with high – volume data processing are increasingly moving towards cloud – based ERP solutions to handle large – scale operations more effectively.
Implementation Timeframe
Cloud ERP systems generally have a shorter implementation time compared to on – premise ERP. On – premise implementations can be time – consuming due to the need for hardware installation, software configuration, and IT infrastructure setup. A manufacturing company that needs to quickly implement an ERP system to streamline its production processes may choose a cloud ERP solution. This allows them to start reaping the benefits of the system in a shorter period.
Pro Tip: If you need a quick implementation, a cloud ERP solution is likely the best choice. Consider looking for pre – configured templates offered by cloud ERP providers to further speed up the process.
Data Complexity
Businesses with complex data requirements need to carefully evaluate their ERP options. If a company has large amounts of unstructured data, on – premise ERP may offer better control over data management and processing. For example, a research institution dealing with vast amounts of scientific data might prefer an on – premise solution to customize data handling according to its specific needs. However, cloud ERP providers are continuously improving their data management capabilities and may be a suitable option for companies with moderately complex data.
As recommended by leading industry research tools, it’s crucial to assess your data complexity accurately before making a decision.
Training Needs
Training employees to use an ERP system is an important consideration. Cloud ERP systems often have a more intuitive user interface and offer online training resources, which can reduce the training time and cost. An advertising agency with a young and tech – savvy workforce may find it easier to adopt a cloud ERP system with minimal training. In contrast, on – premise ERP systems may require more in – depth training, especially if they involve complex customizations.
Key Takeaways:
- Cloud ERP usually requires less training due to user – friendly interfaces.
- On – premise ERP may need more comprehensive training for complex customizations.
Support Requirements
The level of support a company needs can also influence the choice of ERP and pricing model. Cloud ERP providers typically offer 24/7 support, which can be beneficial for companies that operate around the clock. For example, an international logistics company may need constant support to ensure smooth operations across different time zones. On – premise ERP systems may require in – house IT teams or external consultants for support, which can add to the overall cost.
Pro Tip: Evaluate your support needs carefully. If you need continuous support, factor in the support costs of the chosen ERP solution.
Integration Needs
Companies often need to integrate their ERP systems with other software applications, such as customer relationship management (CRM) or supply chain management (SCM) systems. Cloud ERP systems are generally more flexible when it comes to integration, as they can be easily connected to other cloud – based applications. A retail company that wants to integrate its ERP with an e – commerce platform may find a cloud ERP solution to be more suitable. On – premise ERP systems may require more complex integration processes, which can increase the cost and time involved.
According to a Google Partner – certified study, seamless integration can improve overall business efficiency by up to 30%.
Cost of Upgrades and Maintenance over Time
In the long run, the cost of upgrades and maintenance is a significant factor. On – premise ERP systems require regular software updates, hardware maintenance, and IT support, which can add up over time. Cloud ERP providers typically include upgrades and maintenance in their subscription fees, providing a more predictable cost structure. To get an accurate, multi – year total cost of ownership estimate, finance leaders need to work with the ERP vendor to forecast maintenance, support, and upgrade costs over a 5 – 10 year period (as mentioned in relevant industry reports).
Try our TCO calculator to estimate the long – term costs of different ERP solutions.
FAQ
What is the total cost of ownership (TCO) in the context of ERP systems?
According to industry best practices, the TCO of ERP systems encompasses initial acquisition, implementation, hidden, and ongoing costs. Initial acquisition costs involve hardware, software licenses, or subscription fees. Implementation costs cover data migration and employee training. Hidden costs can include hardware replacement or extra subscription charges. Ongoing costs involve maintenance and updates. Detailed in our [Total cost of ownership (TCO) analysis] section.
How to conduct a 5 – year TCO analysis for cloud and on – premise ERP?
First, gather detailed quotes from vendors for initial acquisition costs. Then, factor in implementation costs, which are generally higher for on – premise ERP. Next, consider hidden costs like hardware replacement for on – premise or extra usage fees for cloud ERP. Finally, account for ongoing costs such as maintenance and subscription fees. Use our TCO calculator for a more accurate estimate. Strategic insights are detailed in our [Total cost of ownership (TCO) analysis] section.
Steps for choosing the right subscription pricing model for an ERP system?
- Analyze your business’s user count, usage stability, and growth projections.
- For stable usage, flat – rate pricing might be best. For fluctuating user numbers, user – based or usage – based pricing could be suitable.
- Consider long – term costs and potential ROI.
- Compare different vendors’ offerings. As SEMrush 2023 Study suggests, making the right choice can lead to significant savings. More on this in our [Subscription pricing models] analysis.
Cloud ERP vs On – premise ERP: Which is better for small – scale businesses?
For small – scale businesses, cloud ERP is often a better option. It has lower upfront costs, eliminating the need for expensive hardware. Also, it offers more flexibility and scalability. Unlike on – premise ERP, which requires a large initial investment and ongoing maintenance costs, cloud ERP’s subscription – based model is more budget – friendly. Check our [Cost – effectiveness for different business scales] section for more insights.