Cloud ERP is deployment choice for top-tier systems

For top-tier ERP providers, cloud is the deployment option of choice for customers.

SaaS software for the four top-tier ERP vendors has matured significantly and is preferred by customers over hosted cloud ERP, according to the newly released "2025 Clash of the Titans" report from Panorama Consulting Group. The annual report uses survey data to compare customer experiences with SAP, Oracle, Microsoft and Infor, identified as being top tier based on functional requirements of their applications, overall global footprint, market share, number of employees and revenue. SAP and Oracle are still the major players, followed by Microsoft Dynamics and Infor, according to Panorama.

The survey, conducted between September 2023 and September 2024, included 172 respondents who had recently selected and implemented Infor, Microsoft, Oracle or SAP ERP applications in their organizations. The organizations were generally large enterprises in a variety of industries around the world, with a median annual revenue of $400.5 million and a median of 750.5 employees.

While cloud ERP was the clear choice for deployment over on-premises, Infor customers had the strongest affinity, with 92.9% selecting it as their deployment choice. The other vendors hovered around a 75% preference for cloud, with SAP at 77.4%, Oracle at 75% and Microsoft at 73.3%.

Similarly, SaaS software was the cloud deployment model of choice over hosted or managed services, with Infor at 84.6%, SAP at 75%, Microsoft at 69.1% and Oracle at 66.7%.

The customers are taking their lead from the ERP vendors, who are pushing the cloud ERP model hard, said Chris Devault, senior manager of client services at Panorama Consulting Group.

You can still buy it for on-premises, but you have to pull teeth. They don't want to sell it. They don't want to implement it. It still can be done, but they're essentially forcing new customers into the cloud model.

"You can still buy it for on-premises, but you have to pull teeth," Devault said. "They don't want to sell it. They don't want to implement it. It still can be done, but they're essentially forcing new customers into the cloud model."

One difference over previous years is that SaaS cloud ERP applications have matured, and customers are adopting them because they no longer need to maintain their own infrastructure and instances, he said. However, customers with on-premises deployments will need to change their mindset as they transition to the cloud.

"They're now having to plan how to go from an on-premises to a cloud application," Devault said. "Because it's different in support, it's different in how you request enhancements, it's different in how you manage the applications and who does it."

The maturing of cloud ERP systems has enabled customers to implement digital initiatives that extend the core ERP, according to the report. The most common digital initiatives are mobility extensions, AI, business intelligence, predictive analytics and web commerce.

The survey also asked about the functionality customers were seeking when selecting an ERP vendor. For Oracle and SAP, most respondents indicated that sales and CRM were their top initiatives, followed by reporting and analytics, and enterprise asset management. Infor customers listed finance and accounting as their top initiatives, followed by supply chain management, and reporting and analytics. Microsoft customers selected warehouse and inventory management, followed by reporting and analytics.

The focus on sales and CRM functionality indicates that core ERP processes for finance and operations that support such functionality are running well behind the scenes, Devault said.

"Most people don't want to take the extra time to do CRM or sales unless it's fully integrated and can add a lot of value," he said. "This tells me that the people are pretty stable in their newer SaaS environments and are able to put more money into new applications, or extend the capability, rather than just maintaining the software."

Project costs and durations, which had some significant differences among vendors in previous "Clash of the Titans" reports, have evened out across the vendors, with Microsoft as the exception, according to the 2025 report.

Survey-takers reported Microsoft as having the highest average project costs and duration at $5.4 million and 155 months. Data showed Oracle was the next most expensive at $2.6 million and 73 months, while SAP came in at $2.5 million and 55 months. The average Infor project was reported as being the least expensive at $1.8 million with a duration of 55 months.

The higher costs and duration of Microsoft projects could be attributed to its channel strategy of using value-added resellers and independent software vendors to develop last-mile functionality for its applications, Devault said.

"We've seen software be cheaper for Microsoft, but their implementation costs are very high, even higher than SAP or Oracle right now," he said.

Microsoft also does not have as many out-of-the-box implementation accelerators as SAP or Oracle, so its systems often require more configuration. Organizations that choose Microsoft tend to take on more of the implementation on their own, Devault said.

"[The customers] are not paying [as much to Microsoft], but they're still keeping track of their internal costs," he said. "These are ultimately going to be more when they think they know what they're doing but they really don't. But we've always seen Microsoft have high implementation because of the amount of configuration needed."

Devault added that customers are also evaluating systems integrators (SIs) and service providers more in-depth.

"They're not going with Oracle or SAP just assigning them an SI," he said. "They're finding their own people, and they're really doing the diligence on the service provider side."