Cloud adoption and usage continues to increase exponentially across the industries. Gartner predicts that the global Cloud service market, which stood at $182.4 billion in 2018, will increase to $331.2 billion in 2022 at 12.6% CAGR (compound annual growth rate).
More than 30% of new investments in software by technology providers are slated to move from Cloud-first toward Cloud-only, further reducing license-based software spending and increasing subscription-based Cloud revenue.
Though migration from on-prem to the Cloud is increasing at a fast pace, IT is still struggling to decide MDM migration and its advantages.
There is no one straight answer for arriving at a decision, and it all depends on the requirements of the MDM solution currently getting implemented in your Enterprise that can vary from its complexity, geography ( for Eg US, Europe, Asia), etc. If security over sensitive data, keeping full control over your server, hardware, and software is of the utmost priority, then having them on-prem makes sense. But if the focus is on cost, deployment, scalability, and carrying out implementations across geographies, then Cloud MDM is the way to go.
Since data security is so critical, many Cloud-based service providers have significantly improved the security of their platform. Some SaaS-based companies like Reltio and Veeva are much in the limelight for providing industry-specific MDM models for the pharmaceutical industry that not only significantly reduce the implementation time and are feature-rich.
Depicted below are some of the top factors that impact this decision between on-prem and cloud MDM:
The cost can be a significant factor when it comes to making a decision. Cloud-based vendors have monthly or annual subscriptions rather than upfront payment models for all the hardware and software for on-prem installation. The cost to install, configure, upgrade, and maintain on-prem installation is much higher.
Most of the Cloud-Based MDM vendors base their pricing on the number of records processed for the match and merge, and this can be the driving force in choosing Cloud MDM. One of the key benefits of a SaaS-based model is its ability to facilitate quick scale up or down depending on the volume of data that will be stored and processed.
Usually, most of the companies upgrade anywhere between one to three times per year for on-prem, which requires significant involvement from IT. In contrast, a Cloud-based MDM is very transparent for the end customer.
Most of the industries like Banking, Retail, Pharma, and Insurance have been quite wary of storing confidential and sensitive data on the Cloud as it leaves the companies secure environment. If there is a strong push from the company’s leadership to prioritize the safety of the data, then on-prem is a better option.
Lately, most of the Cloud-based providers have significantly improved in providing an increasingly secure environment.
As explained above, most of the Cloud-based SaaS providers come with readily available domain-focused MDM models that can be readily customized to the customers’ needs. This approach affords a significant reduction in cost and time-to-implement. On the other hand, on-prem implementation requires more resources and building from scratch.
Cloud-based MDM implementations are significantly faster to configure, implement, and scale, based on current needs. It is quite easy to procure and initiate the configuration of the Cloud-based MDM services, and most of the SaaS vendors provide a slew of data connectors for other cloud-based solutions like ERP, CRM, etc.
Deploying MDM solution on the Cloud consumes far fewer resources when compared to the number of teams from IT that need to get involved in deploying a solution from Sandbox to Prod.
Adding more data sources or customer attributes for match-and-merge in cloud MDM is also much easier and faster than the on-prem option.
When looking at compliance, it is much simpler to keep control of your data on-prem. For example, we have seen in some of the situations that exposing some of the data attributes on the Cloud to some third party vendor is more complicated to achieve than on the on-prem MDM version where you have complete control of your data.
Cloud-based MDM solutions are much easy to scale up and down depending upon the volume of data and needs, thereby providing significant cost-benefit. Cloud-based MDM solutions scale very well when it comes to multi-geography implementation, where each region has its specific laws and regulation.
Most of the Cloud SaaS providers provide support on their Cloud environment related to Data Regulations and security laws related to EU General Data Protection Regulation (GDPR) or customer’s Personally Identifiable Information PII data. In one of our Cloud MDM implementation for mid-size pharmaceutical companies, we initially configured and went live for the US region. Later there was a need to expand into Europe. Procuring and configuring Cloud Data Tenant for Europe was much easier due to the region’s data retention and privacy laws.
Access to new Features
Access to new features is available instantaneously on a Cloud MDM as compared to on-prem MDM, where you need to go for an upgrade that takes heavy IT involvement.