There are some interesting elements in the announcement. First, Lawson was clear that this effort is targeted at mid to upper mid market companies - those who are likely to be overly burdened in the acquistion and maintenance of hardware. These companies are also at a disadvantage when they have to run development/test environments and accommodate disaster recovery. Putting applications on the cloud alleviates these issues considerably. Large retailers may even consider the cloud just for development/test or disaster recovery while running the production system on premise.
It should be noted that Lawson is not positioning this as a multi-tenancy SaaS version of its ERP application. Rather, Amazon becomes a infrastructure alternative to having hardware on premise or using a traditional hosting vendor. While Amazon does have some interesting automation for provisioning additional resources, the traditional hosting providers, thanks to virtualization, can offer equivalent capabilities. Lawson has modest revenue expectations for the effort and is largely driven by offering customers a wider range and more modern set of deployment options. We suspect that attaching itself to the hype around cloud is also a motivation.
We would like to see Lawson discuss how the system management tools that are part of the ERP foundation integrates with the automation tools in EC2 - today there is no direct integration, all additional provisioning would be handled by the customer getting directly involved. We would also like to see the retail industry extensions Lawson offers also carry this deployment option as functionality like merchandising is an integral element of any retail business system. Extending that notion further, additional integration with the Amazon e-commerce platform for Internet based selling and a partnership with a store systems vendor would be valuable. With all these elements in place, this could be a big hit in the industry.
Retailers should consider the LoA option carefully. If it is likely that your back office systems carry serious capacity spikes or you are growing very rapidly, then the EC2 infrastructure platform will be attractive. If you just want to mitigate disaster recovery, development environments, and would only occasionally revaluate provisioning additional capacity then a traditional hosting provider is a safer bet. If you are brave enough to be a test subject, be sure you are duly compensated with deep discounts on the software cost side. Also, make sure service levels are clearly spelled out and that remediation actions are well understood. Under the right circumstances, running LoA can be a tremendous benefit, but, otherwise, may be an unnecessary risk.
Robert Parker, IDC Retail Insights
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