Lawson Software is hoping to entice its customer base to deploy their applications in Amazon's Elastic Compute Cloud (EC2), and has a marquee customer to show it can be done successfully.
The government of Scott County, Minnesota, moved to Lawson software some years ago from an Oracle application, and originally decided to deploy it via traditional hosting, which was managed by Lawson, said county CFO Kevin Ellsworth.
"The biggest reason we did that wasn't cost savings," he said. "The staff that was supporting Oracle, we retained, but we redeployed them to things that had more value."
Scott County first tested the EC2 waters by using an ERP (enterprise resource planning) disaster recovery service Lawson offers via the cloud platform, Ellsworth said.
When its three-year managed services agreement with Lawson was about to expire, it entered discussions with the vendor and decided to move its application footprint from traditional hosting to EC2, said Ellsworth, who is presenting at Lawson's CUE user conference in Boston this week.
The added flexibility provided by EC2 has allowed a local school district to essentially co-host its Lawson software with the county, according to Ellsworth. The school district is saving "$50,000 to $100,000, easy" thanks to this, he said.
Also, the county now has three dedicated environments, with one each for testing, development and production, he said. Under the hosting arrangement, it only had ones for test and production. The development environment was "relatively inexpensive to add" on EC2, he said.
Overall, the county's costs related to application deployment, whether hosted or Amazon, have remained basically flat for years while "every other [IT expense] line has been going up," he said.
Lawson expects customers will consider the Amazon deployment option as they go through "disruptive events," such as a need to deal with aging hardware, said Terry Plath, Lawson's vice president of cloud services. "Most CIOs will take a step back and determine what the best option is at that point."
Lawson runs the Amazon option as a managed service, and it takes responsibility for uptime, Plath said. The multiple zones available in Amazon's infrastructure "really makes for good availability at a very low cost."
The service is priced based on a customer's application mix, Plath said. Then, "we have a standard pricing tool that takes into account the cost to Lawson in both labor and usage fees." Lawson is willing to sign agreements for as short as one year, but customers get the most economic benefit with longer deals, he said.
Lawson is not actively looking at other cloud infrastructure services, such as Rackspace, at this time, but is keeping an eye on the market, Plath said.
So far at least, the cloud deployment option itself isn't driving new business for Lawson, according to Plath. "Customers are still purchasing based on business process functionality, and then we get into the discussion of: what's your deployment model?"
Meanwhile, although he's happy with the Amazon experience so far, Ellsworth is not sure how to feel about Infor's recent US$1.8 billion offer for Lawson. "I am concerned about that," he said. "I like the size Lawson is, the attention a customer can get."
It's not clear when or if Lawson will accept the Infor bid, or whether counteroffers from the likes of Oracle will emerge.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.