Cloud Software ROI 2.1x Higher Than On-Premise

by Leia Davis | Jul 25, 2017 | Cloud, ERP Software

Cloud Software-ROI

If you’re researching whether to switch from on-premises business software to a cloud ERP system—the Whitepaper Cloud Software ROI released by Nucleus Research highlights some of the ways cloud saves money.

Cloud software ROI is 2.1 times higher than on-premise.

First, they note that cloud based erp system project delivers 2.1x times the relative return on investment (ROI) of on-premises projects. That’s up 24% since their 2012 analysis, which marked the difference at 1.7x times.

“Companies continue to invest in cloud applications and infrastructure projects because of the lower initial cost and faster time to value. As more and more vendors have invested in moving their solutions to the cloud, the breadth of availability of cloud platforms, applications, and services has grown – as well as the complexity of cloud applications available,” writes Rebecca Wettemann, analyst for Nucleus.

This means that all the great features of cloud software—adaptability, scalability, integration, and customization, and lower initial startup costs and maintenance—are still true and are a huge contributing factor to cloud software ROI.

Ways to Save with the Cloud Software

Cloud Delivers 2.1 Times More ROI points out two main numbers that should make everyone researching business software sit up and pay attention.

  1. Implementation: Implementing cloud applications is 63% lower than on-premise, up from 40% less in 2012. (That’s huge!)
  2. Support Personnel: The cost in support personnel for cloud applications is on average 55% lower than on-premises.

Why are the savings so significant? Cloud software is designed for agility and seamlessly integration with your business.

More Benefits of Cloud Software for Business

The Whitepaper from Nucleas also points out, that if something goes wrong, the vendor for the cloud application has to fix things. And they have to fix it all the way, not just “good enough to keep working”…It’s also a good idea to find a VAR (software vendor or partner) you can trust. It prevents the likelihood to “cut and run”—as Nucleus puts it—in the first six months. Even if the investment isn’t as large upfront, it is still worth seeing through to the end. Save yourself the hassle of switching from a less than satisfactory vendor by doing some additional research on the front end and finding a partner who really understands the needs of your business. Milestone has been partnering with Pacific Northwest businesses for over 20 years, give us a call (360-734-3387 or go to our contact page) and let’s find out if we would be a good fit as your ERP implementation partner.

A final number to consider is that cloud software uses an average of 91% less energy than on-premises. That’s great for your budget and the environment!


  • Lower upfront costs
  • Lower maintenance costs
  • Flexibility of the applications
  • Reduced need for support personnel
  • Environmental savings

​These, and more provide overwhelming proof that “it’s hard to argue against the cloud.”  For more details and analysis, read the whole whitepaper about how cloud software ROI out plays on-premise time and again.

Cloud software roi infographic