SAMI 2019 • IEEE 17th World Symposium on Applied Machine Intelligence and Informatics • January 24–26 • Herl’any, Slovakia
Software as a Service operation model in
cloud based ERP systems
I. Orosz*, A. Selmeci**, T. Orosz***
Óbudai Egyetem AMK, Székesfehérvár, Hungary
E-mail: *orosz.istvan@amk.uni-obuda.hu, **selmeci.attila@amk.uni-obuda.hu, ***orosz.tamas@amk.uni-obuda.hu
Abstract— The operation model for cloud-based application
has already became the new standard in ERP
implementations. The model has introduced a new software
abstraction layer, which hides the data center model from
the customers. This layer covers the architecture, operating
system, database and elements. When the layer covers the
complexity of the middleware layers, allows the owners to
concentrate on implementing the core business logic only.
The risk is usually that more and more resources are
allocated to the infrastructure; with this model the resources
can be balanced with the business side. In the end this will
lead to extended application lifecycle, while the core
functions of the business logic are totally separated from the
recently changing infrastructure layer. Standard merge and
release management, starting from pre alpha state and
describes the way until the gold release, was changed in this
operational model with an agile way release process. This
results the overall possibility of always using the latest
version of the application always, when using the Software
as a Service cloud model. Code refactoring, reusability is a
key factor, as having another abstraction layer between the
platform specific and the platform independent model.
Having the proper abstract transformation layer between
these two keeps the application roles separated, and the end
user does not have to create a whole IT support
organization, because the abstract layer will hide the low
level infrastructure. This article focuses mainly to the
change management questions which arise when an
organization moves from standard data center solution to a
cloud based (SaaS) model.
The ERP solutions should be redesigned, reconstructed and
sometimes rebuilt from scratch to provide continuous
versioning, and be able to offer customer services. As the
goal is always to be able to provide services at a lower
operational cost there must be a solid reusability method in
the application. Code refactoring and reusability methods
should be changed also, using and implemented on a
separated abstraction layer. The transformation layer has to
be able to maintain the goals of the reliability of the
software product during its whole lifecycle. These
middleware layer have to be able to maintain the reusability
of the 3rd party software elements, but the commonly used
parts have to be in the same format as in the base
application.
The article shows different ways and possibilities which all
can be used for building up an application environment in
the cloud using software as a service and the other different
service bus like methodologies, and focuses on switching the
operation model from the on premise datacenter application
to the cloud based SaaS model.
Keywords: cloud base operation model, ERP, SaaS, model
driven architecture, change management, code reuse
978-1-7281-0250-4/19/$31.00 ©2019 IEEE
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I. INTRODUCTION
The cloud-based applications nowadays are very
popular, but usually not well understood. More and more
companies want to use them having not right
understanding of their real benefits and sometimes their
drawbacks. There a wide range of options offered by ERP
vendor companies and well-known cloud providers on the
current market. If we take a look on the EPR solution
offers, a lot of the services were developed for cloud from
the scratch, and some others are able to run on cloud, not
just as a premise solutions. Companies are making
continuous efforts to rebuild existing, well-proven
applications for cloud usage as well.
The traditional release and development workflow can
be grouped in the following categories: 1. Diagnostic, 2.
Analysis, 3. Design, 4. Development, 5. Deployment and
6. Operation [1]. The traditional data center based on
premise operational model requires a close interaction by
the whole organization, for the entire software lifecycle.
During upgrading or migrating the software solutions for
cloud based operational model, these categories will be
different.
The cloud-based operation has to be handled together
with the provided or offered services. These two forms
together a new abstraction layer for the whole software
solution, in which the layers which are responsible for the
whole implementation are totally segregated from those
layers which are responsible for implementing and
modeling the core business logic.
This present article is structured in the following way.
The beginning sections give a detailed definition of the
definition of0cloud based ERP operation models, which
are concentrating on the Software as a Service model and
after it gives a brief overview of the impact for
information technology applications. Then it follows with
the meaning and importance of code refactoring and
reusability, which is demonstrated by a currently available
tool in Microsoft Dynamics AX environment, which is
able to check the consistency and integrity of the code of
relevant changes and supports change management. The
most popular SAP solutions are also demonstrated through
examples and its implementation challenges.
II. SERVICE BASED OPERATION IN CLOUD
ENVIRONMENTS
There can be more service based cloud operation model
be differentiated in cloud, due to the fact to which types of
service level are hidden away from the business. The three
most important operation models [2]:
• Infrastructure as a Service (IaaS): provides the
lowest set of hosting services. The service level
takes care of the virtualization, servers, storage
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I. Orosz et al. • Software as a Service operation model in cloud based ERP systems
and networking, so almost the infrastructure-like
operations. This can be considered as the first
real cloud based operating model over the
datacenter on-demand solution. Real life example
is Amazon EC2.
• Platform as a Service (PaaS): one step over the
IaaS, this level additionally handles the operating
system, middleware interfaces and the runtime
software modules. Offers control over the
application and its data for the customer, and
hides the infrastructure complexity. Real life
example is Google App Engine.
• Software as a Service (SaaS): over the PaaS, the
customer has to deal with modellng the business
processes implemented by the software solution,
and can use the whole underlying infrastructure
as a cloud service. This model is the total inverse
of the datacenter on-demand model. Real life
example is Microsoft Dynamics 365.
• Data as a Service (DaaS): it is not a new layer on
SaaS, but a parallel living one. It helps to access
any data (e.g. business critical ones) in a
protected way within an acceptable time. The
data is share, not dealing on the source
(geographical or organizational differences are
hidden), but can be accessed on demand only
having corresponding authorization.
In standard ERP environment the DaaS is not yet really
implemented or used. It could eliminate from the data
redundancy, which is a default requirement in ERPs’
world. The advantages of DaaS can be user in many areas
like data consolidation, controlling or planning, etc.
These common services can be delivered only when
there are virtualization, management, redundancy and
automation on every layer of the infrastructure and
applications. As from the technical oriented point of view
the automation of the management raised the cloud above
the already known virtualization techniques. From
application perspective the services can be delivered only
if they all exists separated and can be connected to each
other directly or backend. Cloud-based solution
description can be used only if the application runs in a
cloud environment. This is not really true to SaaS
examples, but mainly for application on PaaS or even IaaS
bases.
Figure 1 Business model of cloud computing [2]
The use of more service models is widely used,
although this paper focuses on the SaaS model (see Figure
1). Whereas cloud computing is heavily based on
virtualization, from our point of view we will not
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distinguish abstraction based on the used virtualization
technique. [19]
The cloud environment what we use can be different:
• Public clouds: service providers offer their
resources to the public. That can lower the initial
costs, but lack the fine level control over data,
network and security.
• Private clouds: designed for exclusive use of a
single organization. They offer the highest level
of control over data, network and security.
Sometimes they are similar to the traditional data
centre model, which lacks the cost benefit of the
cloud.
• Hybrid clouds: combining the two previous, part
of the infrastructure runs in private, the
remaining provides public services. They provide
more control than the public clouds, but the
design phase must be carefully driven to find the
best balance between the public and private parts.
VPC is a new abstract layer over the publicly available
clouds, providing the use of Virtual Private Network
(VPN) protocol, enabling service providers to build and
design their own network with security solutions. Most of
the customers sees it as a short transition from the
datacenter architecture into the cloud, meanwhile still
using and owning the usual old virtualized network layer
[2]. The examples clearly show the difference between the
solutions, which are offered by the main ERP provides.
We can reduce for our article the focus on Microsoft and
SAP examples. The Microsoft Dynamics 365 ERP system
resides on Azure cloud solution. Azure can host general
windows based application, with Common Language
Runtime as software platform. It offers its own storage
service and SQL data services. Automatic scaling is based
on the application roles and the user predefined
configurations. .NET services offer infrastructure service
for the cloud based applications. Azure platform can be
used by applications reside in the cloud and applications
running on premise in data centres. Service Bus enables
an application to propose web service endpoints, which
can be accessed by cloud based or on premise
applications. The SAP HANA Cloud offers, similarly to
Microsoft, only own products in its cloud environment. It
means, that the databases should be SAP provided one
(MaxDB, Sybase ASE or HANA DB) and the application
software can be only SAP product. SAP has no own
operating system, so they use mainly Linux based
machines and some Microsoft Windows Server hosts.
A. Requirements and possibilities in layers
This previously showed architecture layers of the cloud
gives more governance and control of the responsibilities,
when every owner of the specific layer can focus only on
the services provided by their own layer. Planning of the
resource capabilities is more agile, because the common
pools of the computational resources could be allocated
dynamically to the consumers. This is truly the key factors
of cloud operational and computing, allowing the resource
allocation to do “on the fly”. Whereas the original data
center model has to be designed for the average resource
need, which results in insufficient resources under peak
times. Fully automated resource management systems will
be able to change the resource allocation in time, fitting up
to date to the changing needs.
 SAMI 2019 • IEEE 17th World Symposium on Applied Machine Intelligence and Informatics • January 24–26 • Herl’any, Slovakia
When one analyses cloud-based service operation
model, one major point is the on demand resource
allocation. Cloud based operation has to meet the suitable
service level objectives (SLO), with the possible lowest
cost of operational. The overall objective is to get the
maximum from the mapping of SLOs (such as like the
Quality of Service model, QoS) to suit the allocation of
the low-level resources, CPU I/O and memory usage.
These kinds of automated distribution of resources for
web-based applications were already studied in the past
[3]. The performance optimization model is generally
based on the following parts: 1) a number of software
parts which are to handle the requirements which can
satisfy QoS 2) the ability to predict future resource and
demand needs 3) automatized resource allocation
algorithm based on the predictions for the future demand.
There are multiple ways to create these performance
optimization models, such as like statistical machine
learning [4] or deep learning algorithms.
The next step towards can be the resource usage based
individual pricing, for example charging the customer
only for the real resource usage. Clouds are usually based
on heavily service oriented operating model, it seems
natural to offer a moderate level of service level
agreements (SLA). Clouds are mostly separated into
geographically different located data centers, which can
also lower the risk of service outages. Using server
virtualization techniques became a key factor in cloud
based models of load balancing. VMware like models of
virtualization makes possible to handle the operating
system and all of its applications in one logical unit. A
new and more and more popular aspect of operation is the
energy management side, which have an effect on using
energy efficient hardware components, using energy
aware job scheduling and using server consolidation.
Proper server consolidation plans plays huge role in
maximizing resource utilization. Different virtual server
technologies takes important role to identify under-utilized
servers and its host physical machine, while the remaining
physical servers can still be in energy-saving mode.
Consolidating servers in an optimal way in a data center
can often be described as a variant of the vector bin-
packing problem [5], which is a kind of a NP-hard
problem of optimization. These activities improve the
performance in any way. Shared resources amongst
different server (network, disk storage, etc.) allocation can
also result in traffic jam amongst physical servers, mainly
when VM changes its configuration [6].
B. Possible solutions for virtualization and clouds under
ERP services
Virtualization is not a buzzword anymore in the IT
arena, because it is used in several levels in the
infrastructures. On the host, operating system and
application level there are some virtualization theorems
and implementations available [20]. The ERP systems are
using many kind of these theorems for the application
components, databases, etc.
The application virtualization is one of these theorems
in practice. It can move the applications or services, like a
database engine among hosts. It works like a multi node
cluster and relocates the services to other host defined
within the cluster. This kind of virtualizations obscure the
hosts on which the service is running, the host can be a
physical or virtual machine, but the operating system and
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installed components should be the same or at least
similar. The services hold their network-, storage- and
environment resources to be bale to move. These
resources are shared among the hosts (each of the hosts
can used them, but only one at a certain time). The
resources belong to the application or service, which
works as a carrier unit. It brings the resources to the place,
where it should run next time. Unfortunately the Microsoft
Windows operating system does not really support this
type of virtualization. Technically the Windows can
handle the relocations, but Microsoft allows only its own
products to manage the relocation. The applications (or
services) are capable to be moved among host without
having any configuration problems in the consuming
services, application. As in case of High Available -
cluster solutions this virtualization type stops and restarts
the services as they are relocated. As opposite to this
disadvantage the application virtualization can handle or
hide the migration between physical and virtual machines.
As a deeper level of virtualization the so-called light
way virtualization is also available. This kind of
virtualization assumes a standard operating system kernel
level, which is shared among the virtual hosts. The VM-s
can have their own memories or CPU powers, but the
single installed operating system is the basis for each
instance. This kind of virtualization is not a new
development, it was already implemented earlier by the
not anymore existing SUN Microsystems as zones or the
IBM Workload partitioning (AIX wPAR) can be a good
example. In this kind of virtualization the kernel
namespaces and control group levels are isolated. On a
single machine many hosts can be installed parallel
immediately having their own environment using the
general resources, but having own installed tools,
programs or even interfaces. Some huge SAP installations
are running on such environments. The newer Linux
operating systems have these options as well called LXC
(Linux Container). It is more common in the last years
because to create or boot such a VM takes only seconds
and the isolation is working properly (own network, file
systems, security resources), it generates much less
footprint (less virtualization management fee is required
outside the container). It is very good tool for creating
using test environments or just check whether a patch
would fit the database or application kernel. The Docker
or Kubernetes features can expanse the features offered by
Linux Containers. These solutions add very good and
useful management and automation to the OS container
options. They are different in many ways but from ERP
point of view we can install any components onto the
managed hosts. It is an interesting question whether we
can use Docker for Windows based applications. During
the last year there were some improvement in Docker
support and containers can be now managed by Docker on
Windows as well. On the other hand Windows apps can
be “Dockerized” as well [21].
The third kind of host virtualization is the
hypervisoring, which is used nowadays as a quasi
standard. The main directions in the ERP world are the
VMware, Hyper-V and XEN hypervisoring solutions. The
others are used as well, like the IBM AIX based logical
partitioning. Unfortunately the IBM solution cannot
support so many devices, interfaces, protocols, as the
Linux and Windows based environment, so it is getting
less and less share from this arena. The hypervisor
I. Orosz et al. • Software as a Service operation model in cloud based ERP systems

solution has this middle tier between the operating system
and the hardware offering virtual machines (VM). If we
have only one physical host the speed and possibilities are
higher in case of light way virtualization than using
hypervisor techniques. On the other hand hypervisor
solutions can give much higher CPU separation- and
allocation possibilities than the containers do. The
hypervisor producers offer many new features, which are
not available on a simple container environment.
ERP systems as on premise installations can exploit
almost each of the shortly described virtualization
techniques. These solutions are good for basic private
cloud environments.
III. METHODS AND MODELS IN CLOUDS
Cloud implementation, usage and delivery can be very
distinct. These subchapters describe some usable models
and methods of usage and management. Some parts focus
on Microsoft technology, others are SAP relevant, but we
consider independent problems as well.
We should always consider if we try to compare
Microsoft and SAP, that they follow opposite thinking,
development and business model. Nowadays the design
thinking is one planning direction, which is mainly used in
UX developments. Both companies are using design
thinking methodology in their product design, but the
difference comes, when we try to check the products and
the modification possibilities. In each case we can do
almost everything with the system during configuration,
modification or even personalization. We can recognize
that SAP has built its products using business thinking,
but Microsoft defined the products using technical
thinking. The SAP products are built on business needs,
sometimes the technology was not so pretty or even clever
as it should be, but worked as the business designed it.
The Microsoft products are deeply matured from technical
point of view, the objects are mainly technical elements,
which build up the application to reach the business needs.
If we imagine a vertical line having technology on the
bottom and business on the top, we can speak about
bottom up design in case of Microsoft and top-down
model in case of SAP. It leads us immediately to the point
that Microsoft can more easily redesign the on premise
software for cloud based or better said service based
applications than SAP. On the other hand SAP can much
easier reach the business people and offer much more
useful products. It is not so easy for SAP to redesign the
products for cloud platforms or split them to service based
elements. The original product was planned to be a really
integrated real time software, which is still one of the best
designed ERP applications. The subchapters describe
some main planning topics.
A. Code reusability in MS SaaS service model
Cloud architectures enable agile development. Code
reuse is a common process [7], supported by the goals of
object oriented programming (OOP) and generic
programming. These programming theorems strongly
supports code reuse. The generic goals of software reuse
are improved code quality and reduced development costs.
Some research states, that proper code reuse could lead to
almost 20% cost reduce [9] This paper will not focus on
process and organizational issues related to code reuse,
but focuses on the software engineering techniques and
methods.
Components based software development uses as
fundamental methodology the OOP techniques. The
components and their processes apply the capabilities of
reusing codes as units. The standard technologies, like
COM+, CORBA, .NET or J2EE have a central middle
layer for managing and building reusable components.
Most of these technologies provide a mixture of objects,
without limitations on programming language, network
protocol, and hardware platform. Taxonomy of metrics are
shown on Figure 2.
When it comes to software reuse metrics, many areas
are already covered [10]. A software metrics is a
quantifiable measure, which describes a specific property
of a software element. There are “soft” metrics, like cost
and completion time of the software product.
Object oriented programming and generic programming
offers more tools, which can give a metrics definition for
the genericity included in codebase. Tools like Depth of
Inheritance Tree are based on object oriented code
inheritance, by measuring the length of inheritance, both
on server, middleware and client side [9].
Figure 1 Taxonomy of Reusability Metrics [11]
The empirical ones, which express objective, numerical
and repetitive metrics, like Depth of Inheritance Tree.
Qualitative methods express subjective criteria, like how a
software module meets certain quality gateways. See
figure 3 for stages. Cloud based SaaS operation model
offers broader possibilities to realize software reuse
techniques.
Figure 3 Incremental stages of software reuse [12]
As the architecture of a software product can be
expressed as abstraction layers one above, cloud based
software products can be described as adding new
abstraction layer to the traditional data center based
applications, thus the whole underlying infrastructure
heavy layers can use software reuse methodologies. This
could lead to the simplest form of software reuse: reuse a
software solution to cloud by simple adding a new
abstraction layer above. Component based middleware

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 SAMI 2019 • IEEE 17th World Symposium on Applied Machine Intelligence and Informatics • January 24–26 • Herl’any, Slovakia
layers can inherit the reuse characteristic from its base
components. Software safety reasons must be considered
also, because security leaks can spread from one software
solution to the other with the aid of reuse. As software
components are designed and built to be more
autonomous and smart, unpredictable system behavior
based on component interactions must be gone under strict
regression testing [8].
B. Code reusability in SAP solutions
SAP defined the original ERP software more than 40
years ago. During the years the server technology (so-
called kernel and basis components) was redesigned from
monolith mainframe infrastructure to client-server
architecture. As the object-oriented paradigm has arisen
SAP implemented a so-called Business-Object layer on
the existing internal technology and business logic [23].
The object offered some public methods, called BAPIs
(Business Application Programming Interface), which
enable other external software (e.g. written in C++, Java)
to call these services as object methods. Some of these
methods provide complex functionalities, others only
simple updates (some example can be “create employee
from data”, “approve invoice”). These methods are not
real services, only functions offered externally.
SAP was one of the first ERP solution offering business
services in the SOA (Service Oriented Architecture) era.
SAP has defined immediately a wider scope or a holistic
view on the topic defining integration need on different
levels introducing the NetWeaver initiative. It was an
implementation answer to the ERP 2 definition. The
software company here had two different approaches:
1. Trying to postpone the real service separation
by offering the available externally accessible
functions as web services.
2. Implementing a web service encapsulation
technology above the existing functionality.
nd
The 2 approach enabled the accessibility without
changing any business related objects, functionalities,
configurations. The 1st one (using the 2nd technology
layer) offered the service orientation for any external
system or application. SAP offered under the NetWeaver
umbrella its own EAI (Enterprise Application Integration)
solution (which is still on the market having wider
possibilities under the SAP Process Orchestration). It is
more than an EAI solution, it offers ESB (Enterprise
Service Bus) functionalities as well and with SAP
Business Process Management the full SOA requirement
can be covered to be able to create composite applications
from the offered and categorized, stored services.
SAP re-implemented the basic components as
application platform within the NetWeaver initiative and
almost each of the main ERP related products (called SAP
Business Suite) could now use the technology offering
from this platform.
As described SAP reused the already existing
developments all the times, but it does not separate higher
level elements as Microsoft. SAP designs huger
applications with more business functions.
SAP redesigned and newly developed some real cloud-
based products, which are not so huge and target smaller
business requirement sets. These are not reused objects or
products.
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SAP has also reused the currently working R/3 ERP
solution for the HANA DB needs. HANA DB is an in-
memory database designed and developed by SAP. As in-
memory solution the data should be processed by the
database engine to be able to exploit the power of the DB.
As the Figure 4. shows the classic approach dealt with on
single DB and many application server running the
business logic. According to these approach the only the
really required data should fetched from the single DB and
the application layer could execute the business logic,
calculate the result. In case of in-memory we have the date
in the memory of the database server. It is useless to fetch
the data to the application layer for processing. It should
be calculated, processed direct on the database layer,
where it is in the memory. The result can be sent to the
application layer. This approach totally changed the
classical SAP programming design. So not only the
database engine is changed, but the application logic, the
logic flow should also be changed to be able to execute
the code on the database layer. Therefor has SAP
introduced the S/4 (SAP for HANA) after many
successful years delivering ERP R/3. It was redesigned
from the table level and the basic components were also
changed to execute the application logic on the database
level.
Figure 4 SAP HANA DB approach
As we can see all these changes and redesign of the
software architecture kept the original integrated, robust
real-time structure. So this is not really SaaS capable
solution, but SAP offers many tools for creating own
services, apps (using new SAPUI5 / Fiori UX design),
which can be offered as cloud service.
C. The Model Driven Architecture
Model Driven Architecture (MDA) development
methodology is based on specific models, which are the
basics of design, development and the operation whole
lifecycle. This methodology separates the technical
implementation layers from the core business logic. MDA
can be divided into three categories (see Figure 5.):
1.Computation Independent Model (CIM),
domain model for the core business logic
2. Platform Independent Model (PIM), specifies
the system functionality in an implementation
independent format
3. Platform Specific Model (PSM), specifies the
system specification by the specific
implementation technology
The modeling language for MDA abstraction layers is
often described with an UML (Unified Modeling
Language) description because of being an industrial
standard, for CIM, PIM and PSM layers. MDA
I. Orosz et al. • Software as a Service operation model in cloud based ERP systems

substantiates another level of abstraction, which resides
above the previous implementation layers. MDA
represents layers where organizations create their own
objects, which are able to describe their core business
logic in an implementation independent method. The
properties of the requirements are important part of the
modeling to identify the business processes and match
them to the implementation code parts.
Figure 5 Incremental stages of software reuse [12]
PIM models store enough information to decide about
the code reuse of objects. If two objects and its attributes
represent the same business requirement, the underlying
PSM model can be reused. While the PSM model objects
remains the same, implementations can be varied, so the
used PIM models will not reflect any system specific
properties of the software solution. Assigning business
requirements to the PIM model objects can speed up code
reusability. When different PIM objects are assigned to
the same business requirement they can be considered as
substitutable objects, independently from the PSM
implementation of the specific object. Although PSM
models can be implemented in different ways, these
models map the same core business requirements, so the
code reuse issue can be solved, if possible. The customer
has to focus in SaaS model only the covered business
logic, all the other implementation close layers can be left
out of scope by the customer.
D. Change management in SaaS service model
Change management methodologies are need to be
revised as the number of companies going into cloud
based service oriented operational models are rapidly
growing. Custom software development, new version of
software product, which adapted to the service like
operation model - change management methods has to
meet emerging business needs. The technology changes
trigger organizational, business operations and software
development side changes also. New predefined SLAs are
needed for audit trails and software change management.
Not just SLAs should be defined, but accountabilities for
SaaS provider and the customer have to be defined for
incidents and issues caused by software change failures.
This accountability often defined by Information
Technology Infrastructure Library (ITIL) service
management [13], as being queasy industrial standard.
Ownership of software changes often influences the cost
and priority of these changes. Software procurement costs
are also changed in SaaS, because it is about procuring a
service and instead of a license anymore. This could lead
to a new corporate level procurement strategy for SaaS
services also, because the software product which the
service offers is an always changing product, which shows
the latest version and is up-to-date always, so no need to
bother with version upgrades anymore. Another changed
area is ownership of data, which now resides in a cloud
storage, which is not under the authority of the customer.
SaaS service providers can be divided into two basic
categories:
1) Ones, which host both application architecture
and software developments.
2) Hosts only application architecture and service,
top level of software development is hosted internally by
customer, and subscribes service offers from the host
provider.
Both categories have common features like automated
change management system, which keeps monitoring
software changes. Documentation of software changes
should be part of the SLA and SaaS negation. Lack of
these documentations could be vital during incident
management, or in final case when leaving current SaaS
provider. Security issues have to be taken under ITL
service management also, because SaaS cloud based
operation changed the way software security worked in
the data center model. Responsibility over data and
software security is distributed between the SaaS provider
and the customer, who was also present in the data center
model, but the roles have been changed.
Figure 6 Basic layered structure of cloud based business
application usage
Change management is a vital point in the operation
lifecycle of a SaaS cloud. Due to its virtualized
infrastructure, the number of changes is growing. Another
side effect is the complexity of changes:
Virtualization plays centralized role in cloud structure,
it enables pooled resources, abstracted components, data
migration and replication resources. Another question is
the multi tenancy of the layers, where the different layer
owners have different change management processes, with

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 SAMI 2019 • IEEE 17th World Symposium on Applied Machine Intelligence and Informatics • January 24–26 • Herl’any, Slovakia
different purposes. This structure has a direct advantage:
every layer owner has to focus only one architecture layer.
E. Security maintenance
SaaS cloud based operations needs advanced level
security, which is more complex scenario than the
traditional data center based security architecture. The
security structure is also more complex in an agile cloud
environment. (The Figure 7 shows the points, where
security can also be involved.) That means, change
management has to focus more on compliance
maintenance [14]. There are operational challenges like
risk assessment, changes in the governance model, audit
and compliance requirements. Virtualization raised
questions towards the more complex architecture are
monitoring, segmentation and the need of new
configuration controls, and they can vary according to the
cloud type (private, public, hybrid). Some of the raised
questions reside on the technical side like data and
customer segmentation, identity and access management,
in a multi-tenant environment, where one physical
platform can host distinct entities data and cloud services.
Figure 7 Cloud based SaaS operation security [15]
Most SaaS cloud implementations are based on existing
IaaS cloud implementations, for VM and application
hosting. Host based security is based on network and host
controls, the biggest challenge is the heavy resource
consumption, which means serious leak in virtualized
environments. The solution could close integration of
security tools with the operating system. Segmentation
and isolation are critical needs in these environments; also
with security and availability monitoring, generally
speaking it makes more sense to monitor different VM
layers.
IV. ERP SOLUTIONS IN PRACTICE
We observed two bigger ERP vendors in our paper:
Microsoft and SAP. The solutions provided by both
vendors were developed original for on premise usage.
These applications can be installed as we earlier
mentioned on physical and guest hosts as well. If we have
a VM created on a cloud environment (as IaaS or PaaS)
the applications can be installed and used as well.
SAP is offering other solutions than ERP as well. In the
past SAP has bought some companies and solutions, some
of them are cloud-based solutions, services. Some of these
services are still available as cloud services (SaaS):
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Success Factor (HR solution), Hybris (Java based central
component based machine), or FieldGlass. These can be
used as theoretical extensions of an ERP system, but they
are not deeply integrated.
Before the cloud technologies SAP made some steps
into the Service Oriented Architecture (SOA) direction as
well. This direction was a goal for almost each software
vendor to enable the systems to easily connect to each
other via semi-standard interfaces. The original idea of
SOA is to have services, which can be connected to each
other and to build applications using the services offered.
SAP tried to define services on higher, application level
known as enterprise services. These services could be
connected together or served as basis elements for a
process flow. The service offering is only a small part of
the SOA; because service repository, interface handling
and an application definition level using service calls
should also be declared. This level is known as business
process management or composite application layer. The
interfaces should be handled not only as data integration
platform like an EAI (Enterprise Application Integration)
solution, but the interfaces should be converted to service
calls as well. These exchange is made by an Enterprise
Service Bus (ESB) solution, which enables for different
interface types (like file interface, database calls, etc.) to
be called as web services. From technology point of view
these web services were used for communication in each
cases. (It is unfortunately a semi-standard, because each
implementation of web services follows some standard,
but they all have some different restriction.) Microsoft has
implemented its own service-oriented architecture to
enable this kind of connectivity and interoperability. They
defined the internal ESB platform as well. Microsoft is
building their software from technology level, so they can
easier define the services, but some times on a lover level
than SAP does.
Defining services in the ERP solutions was one of the
drivers to be able to offer services from the ERP on cloud.
The original modularized and integrated ERP solutions
should have been separated to smaller pieces. These
smaller elements could build single cloud services. We
have to make difference on simple, enterprise- and cloud
services. A simple and an enterprise service are directly
callable functions. Some of them can be face-less others
could have surfaces as well. The cloud services should
execute more than a single function. We can consider apps
and transactions as basic cloud services, but an accounting
application can be a cloud service as well. (Like Success
Factor by SAP is an HR application containing several
separately usable sub modules.) Unfortunately the
degradation of the original ERP solution did not fulfill the
expectations. The mobile app penetrations and the cloud
readiness requirements forced the vendors to redefine the
goals and create real service offerings [22]. Microsoft has
redesigned and reconstructed the ERP solution called
Dynamics. It is offered now on the Microsoft cloud
(Azure) as a whole solution and as separated service as
SaaS. SAP has started the reconstruction as well, but it is
not yet completed, even many features are available
already. SAP offers parallel on the SAP HANA Cloud
many small apps and services to be called for special
usage. SAP follows another direction. It would define
smaller, mandatory services on cloud to be able to move
the customers to the cloud.
I. Orosz et al. • Software as a Service operation model in cloud based ERP systems
According to our experience many companies are still
keeping distance from cloud technologies, running larger
systems on cloud and using public cloud solutions. Many
times the internal thinking is not ready for using public
cloud. But in case of larger systems there are mainly
network issues to be solved. Some of the main issues in
this area are the followings:
• Interfaces, synchronization
• Active Directory mirroring
• Latency
• Cross system processes when some of the
systems are on cloud, other on premise
• End-user experience
• Printing (Consider the utility companies as good
examples if they should create paper-based
invoices with envelopes.)
• Downloading costs (bringing data out of the
cloud could be expensive; If the data is in the
cloud for a company in the utility sector, but the
invoices should be printed and put into an
envelope using an inserting system in the local
datacenter, a huge amount of data should travel
from the cloud to the printers, which costs a lot.)
• Availability of network (parallel lines, different
topology, costs)
These questions will arise only if whole systems are
installed or moved to the cloud. A good example can be a
manufacturing company where the ERP is on the cloud,
but the warehouse system is installed locally. The
employee should check with RFID scanner the available
goods, but the information goes to the warehouse system,
which communicates with the ERP and waits for the
response. That could be a problem at the end-user side.
(Of course the processes can be designed a bit better as
well.)
The companies who do not want to move any services
to the cloud try to build their own private cloud
environment. The sensitivity and location of the data
(according to governmental rules) can be also an issue for
not using public clouds. Public cloud providers develop
continuously the offered services, management tools,
automation capabilities and features. If we consider the
prices of a single node on the cloud, we can recognize that
the competitors push down the prices and bring always the
newest technology and hardware to the cloud [25]. They
even offer dedicated not virtual nodes for huge usage.
According to our study there is a growing and evolving
way of involving clouds into company usage. The first
elements are parallel simple services, storage usage and
single hosts as IaaS and PaaS. There are third-party
offering on public clouds for installed and managed ERP
solutions. As the first step the companies try to build a
cloud environment (mainly IaaS) for disaster recovery
(DR) purposes. The providers also offer such solutions.
The companies consider many times only the costs of
moving the production to the DR site located in the cloud.
But the opposite direction, when it should come back to
normal state providing again the on premise functionality,
is not defined and designed. Many possible ways are
available to build up a relatively cheap cloud environment
as DR site.
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If we are thinking of using IaaS and Paas for whole
system installations, the cloud itself is better for
development or even test, sandbox environments during
project, where no additional hardware should be bought
only for the project time. Another main aspect of doubting
about using clouds only for some systems is the special
communication, interfacing and networking. It is better to
have each system on the same side as using hybrid
solution. If more of the applications are on the cloud, the
ERP can be implemented there as well.
If we use the SaaS ERP services only from could, it can
lead us to a good direction. The services are stable
enough, but we should consider the communication with
other services as well.
V. CONCLUSION
The ERP solutions are nowadays one of the standard
software at any companies. It is a real requirement to be
offered on cloud (public or private) as well. The larger
providers still have on premise ERP solutions, which can
be implemented in cloud environment (using IaaS or PaaS
levels). The new, SMB (Small and Medium Business)
targeted ERP solutions are provided on cloud with many,
but not so huge functionalities. The larger providers, like
Microsoft and SAP offer direct SaaS ERP services as
well, but the customers still want to have their data (stored
in ERP) closer to the company. The IaaS and PaaS ERP
solutions are not so cheap as expected; the download fees
eliminate the benefits in many cases.
As we see the SaaS ERP solutions are required, but
only by the SMB sector, which does not want so many
features, functionalities, but higher reliability, access and
speed on easier manageable and usable apps.
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