ARE CLOUD SYSTEMS MORE OR LESS SECURE THAN ON-PREMISE SYSTEMS?
CLOUD-BASED ERP SYSTEMS ARE TYPICALLY MORE SECURE THAN ON-PREMISES SYSTEMS. THERE IS A PERCEPTION AMONG SOME COMPANIES THAT ON-PREMISE ERP SYSTEMS ARE SAFER THAN CLOUD-BASED SYSTEMS BECAUSE IT IS MORE SECURE TO MANAGE DATA DIRECTLY ON PREMISES THAN TO PUT THIS DATA ON THE SERVER OF A THIRD PARTY.
 
HOWEVER, THIS IS A DANGEROUS MISCONCEPTION FOR SEVERAL REASONS:
 
1. FIRST, THE FACT IS THAT CLOUD SYSTEMS ARE PROVEN TO BE MORE RELIABLE THAN ON-PREMISES SYSTEMS. WHILE NEITHER TYPE OF SYSTEM CAN GUARANTEE 100% SECURITY FOR YOUR DATA, RECENT STUDIES HAVE SHOWN THAT USERS OF CLOUD-BASED EMAIL SYSTEMS EXPERIENCED 58% FEWER MALWARE INFECTIONS, 45% FEWER INCIDENTS OF DATA LOSS OR DATA EXPOSURE, 45% LESS SECURITY RELATED DOWNTIME AND 93% FEWER AUDIT DEFICIENCIES. THIS TRANSLATED INTO AVOIDED LOSSES EQUAL TO MORE THAN $3 MILLION ON AVERAGE FOR EACH COMPANY.
2. WHILE IT IS THEORETICALLY POSSIBLE TO GUARANTEE ADEQUATE SECURITY FOR YOUR DATA USING AN ON-PREMISES SYSTEM, IT REQUIRES CONSTANT EQUIPMENT AND SOFTWARE UPGRADES AND CONSTANT MONITORING BY YOUR IT STAFF, WHICH IS A CONSIDERABLE DRAIN ON THE TIME AND RESOURCES OF ANY ENTERPRISE.
3. CLOUD SERVICE PROVIDERS STAKE THEIR REPUTATION ON BEING ABLE TO PROTECT YOUR DATA, JUST AS BANKS’ REPUTATIONS DEPEND ON PROTECTING YOUR MONEY. THEY THEREFORE INVEST HEAVILY IN SECURITY MEASURES AND HIGHLY ROBUST NETWORK INFRASTRUCTURE ON A SCALE THAT ONLY THE LARGEST SOFTWARE COMPANIES CAN MATCH. THEY ALSO HAVE COMPREHENSIVE SERVICE LEVEL AGREEMENTS IN PLACE TO PROTECT YOUR DATA, INCLUDING VIRTUALLY 100% SYSTEM UPTIME COMMITMENTS, AND COMPLIANCE WITH VARIOUS RELEVANT SSAE AND ISO AND SOC STANDARDS. COMPANIES CONCERNED ABOUT RISK SHOULD THEREFORE CONSIDER WHETHER THEY CAN REALISTICALLY MATCH THE SECURITY MEASURES OF THE BEST OF BREED CLOUD-COMPUTING SERVICE PROVIDERS BY USING ON-PREMISE SYSTEMS.