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Guide to Cloud Computing for WMS

24 November 2014

How suitable is cloud computing for hosting WMS? Handling & Storage Solutions asks leading warehouse IT suppliers Snapfulfil, Logistex, Advanced Business Solutions and Chess Logistics Technology seeking answers to some key questions.

The concepts of cloud computing and software-as-a-service (SaaS) have led a revolution in business IT over recent years. The concepts are becoming increasingly common in the warehousing and logistics sector too, but whether new approaches are better than older methods of hosting IT on-premises, or securing IT through capital expenditure are open to debate.

By deploying Cloud-based WMS can I remove on-premises IT? Is this cost saving the greatest benefit to Cloud-based WMS?

Gavin Clark, commercial director for SaaS warehouse management system provider Snapfulfil: "The cost saving is a major consideration, but there are others. Few businesses could justify the use of a large scale, virtualised data centre, for the provision of WMS. But with the SaaS Model, this investment of tens of thousands of pounds per month is shared across the user base.

"Another saving is monitoring by IT experts, to look after routine back-ups, upgrades, database administration and on-going maintenance. This means the client’s own IT can focus on other business needs without recruiting more people.

"On-premise systems can take many months to implement with long ROI expected. SaaS WMS allows faster installation and almost immediate ROI.”

Derek Kay, business development director of Logistex, a provider of on-premises WMS: "You’ll still have some RF terminals, which in turn need an RF network. You’ll also need PC/thin client workstations, document and label printers. With most Cloud based WMS solutions you’ll also have some sort of PC/Server to help smooth out the lumpiness in the internet connection, albeit disguised under the banner of a ‘proxy’ or ‘buffer’. If you are considering a Cloud based WMS don’t do it because you think you’ll save money on IT or IT support.”

Alex Mills, sales & marketing director at Chess Logistics Technology: "Many smaller businesses have been locked out of traditional WMS because the entry-level costs are simply too high in terms of capital investment and implementation, let alone day-to-day running and maintenance. Cloud and SaaS solutions offer scalable alternatives that do not result in high-up front costs.”

How do I know a pay-as-you-go SaaS model will not prove more expensive than fixed cost investment over the long term?

Gavin Clark: "SaaS gives the client flexibility. The business cost of choosing the wrong system can far outweigh the financial costs involved. If a business chooses the wrong on-premises system, that business is stuck with that poor system for many years and the ‘savings’ will soon disappear.
"If that circumstance occurs with a subscription model, the vendor will be highly motivated to resolve the issue or they will lose money when their client simply selects another SaaS system.”

Derek Kay: "Any business considering a SaaS model for its WMS should seriously look at actual costs over time. When you’re still paying monthly for a system that you could have paid for outright several years ago you might rue the decision. 

"Once you’ve got a WMS, you don’t want to be looking to change it after a few years. The cost of change in terms of disruption to the operation can be immense. That said, renting a WMS has similar benefits to renting anything else.”

Simon Fowler, MD, Advanced Business Solutions (Commercial division): "As with all major purchases research is essential. However, the speed at which technology is moving means IT is a rapidly depreciating fixed asset when bought through capital expenditure. The flexibility of buying IT as a service is more cost effective, especially when infrastructure upgrades are allowed for. By negotiating flexibility of use into a contract, a business will avoid additional charges.”

With cloud WMS, my system rests on the availability of the Internet. If this was to go down, so would the WMS. How can I add resilience?

Gavin Clark: "Our solution includes multiple redundant connections to the internet, including wireless and cabled connections, plus we will often use the company’s own SDSL and Leased connections to back up the connections provided by Snapfulfil. Our overall uptime was 99.97% last year, which equates to less than 3 hours of downtime in a year. This demonstrates that not only is the uptime very good, but often higher than many on-premise systems that might suffer database failures and hardware issues with no rapid response process in place.”

Derek Kay: "Resilience usually means a second internet connection into the site. You’d probably want that second connection with different provider too in case the issue is with the company itself rather than the line. How you swap over to the second line is something I would recommend you get the Cloud WMS supplier to make very clear in its written disaster recovery procedures.”

Alex Mills: "Cloud does not always need to be SaaS (equally on-premises IT can be delivered on a SaaS basis). The benefit of hosting applications in the cloud rather than on a local server is unclear. It doesn’t necessarily make the software run any better and there may be issues with "uptime” or general service availability.”

Simon Fowler: "Maintaining a certain level of local data, especially at critical points through the day, would also allow a business to continue if only for a limited period of time. If a business chooses this option, they would need to ensure that processes are in place that will allow them to operate with limited data and functionality. Without this, a critical aspect of operations – access to printers for instance – is missing just when it is needed.

"Working with a hosting provider which can analyse a business’ connectivity and advise if this is sufficient to cope with data requirements before systems are migrated to the cloud is crucial.”

Security is important to me and my customers. What level of protection can be given to data when it is located in the cloud?

Gavin Clark: "With recent high profile events relating to iCloud (which was successfully targeted by hackers), it would appear that no-one is safe! However, the level of protection for free-to-use consumer systems and the encrypted security provided by a software vendor that uses SaaS deployment at the core of its business is very different.

The latest hardware firewalls, 128 bit / HTTPS login encrypted data streams and password security checks all add levels of protection to the cloud systems on offer.”

Derek Kay: "The real answer to this is very little. Recent high profile photo hacking stories have shown that regardless of where your data is stored, if it’s interesting enough then someone will have a go at getting access to it.

"Currently hackers are more interested in high profile celebrity exposès, but what happens when they suddenly realise they can add fake orders to a WMS database and have goods delivered to a locker for them to pick up anonymously?”

Simon Fowler: "The weakest point in data security is misuse by employees, so education and information on how to prevent a security problem is still the best defence.”

Do Cloud-based systems have the same range of features as on-premises WMS? Do they perform as quickly and in a way that is as user-friendly?

Gavin Clark: "Of course, but it depends on the system and setup. Some on-premise systems may be feature rich, but deployed on poor networks, or from inferior IT servers. Maybe the RF network is badly configured or the handhelds are old or cheap. Any business solution is only as good as its component parts.

"If you are considering cloud/SaaS then you must consider the bandwidth available to connect to the internet of course, but this should only be a serious concern if the connection is very poor, or if software isn’t optimised for web deployment.”

Derek Kay: "Cloud solutions are fine for smaller operations but their performance is limited when throughputs increase. With an on-premises WMS, particularly one that is automation ready, there is no inherent limitation to the throughput.

"For an on-premises WMS, handhelds with an ergonomic Windows style touchscreen is often standard. For cloud WMS such levels of sophistication can be beyond the bandwidth of the connections as throughputs increase.”

Alex Mills: "Having all of the features of an on-premises WMS is not always important. One of the many advantages of cloud WMS and SaaS is that customers can choose (and only pay for) the features they want rather than selecting a traditional system which will typically include a large number of "unwanted” functionality as standard. This also removes complexity which can reduce implementation, integration, training and maintenance costs.”