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Cloudy to partly hosted PDF Print E-mail
Written by Rick Coan   
Wednesday, 27 August 2014 14:04

The question is often asked, “What’s the difference between the cloud and hosted?”

The difference is cloudy.

Having recently helped a client select an ERP vendor, it was interesting to see the vendor’s definition of cloud versus hosted. Some vendors said it was defined by a pricing strategy, some said it was the difference between multitenant versus single-tenant hosting. One vendor, an obvious techy, suggested that true cloud is device independent.


In my analysis, the vendor’s definition went as follows:



  1. Rent the software, known as software as a service.
  2. Host the server for you, somewhere.


  1. Purchase the software.
  2. Host the server for you, somewhere.

Cloud pricing is a monthly fee for the software and a monthly fee for hosting — sometimes the vendor will wrap the two together. Hosting pricing is a one-time purchase of the software and a monthly fee for hosting the server. In both cases, there tends to be favorable hosting pricing if the server is multitenant, meaning it’s shared. The license and/or maintenance fees will tend to be wrapped in the cloud monthly fee while it tends to be separated in the hosting scenario.


In your analysis it is helpful to do a five to 10 year present value on both scenarios to access your options.


The difference between cloud and hosting is about renting or purchasing the software, which appears to be a vendor pricing strategy, and as mentioned in the beginning is cloudy at best.


Rick Coan partners with clients to provide the professional services they need, freeing up their time and energy to focus on profitable opportunities to grow their businesses and create real value. His skills range from the shop floor to board presentations. For more information, email Coan at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Last Updated on Thursday, 28 August 2014 15:09

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