Tech analysis: How will the cloud grow in 2014?

Will 2014 be the year of cloud… again? AccountingWEB technology editor Andy Price sifts through the portents and predictions to see how accounting applications are likely to respond to the industry's big trends.

There have been lots of cloud predictions in the past few years about how it would transform businss systems including those associated with finance and reporting. Analysts have always insisted there will be an explosion. In reality, the cloud has been around for a long time, and in finance, at least, adoption has been patchy and slow to get off the ground. Cloud evolution will certainly continue in 2014 and we’re likely to it influencing organisational habits in new ways, particularly around mobile and social solutions - as FinancialForce.com's Jeremy Roche argued just before Christmas.

While cloud applications have taken more more strongly in functions such as HR and marketing, AccountingWEB's 2013 Software Satisfaction Awards (SSAs) provided further evidence of slow adoption within mid-size businesses. Small businesses are getting on board - with cloud applications used by around half of our respondents, but with the exception of NetSuite, cloud software was less prevalent in the ERP and business intelligence categories...

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Comments
jon_griffey's picture

Still early days

jon_griffey | | Permalink

The first issue is cost.  I have looked at it seriously for our own small practice needs.  The quotes are coming out at up to £12K p.a.  Compared to our own server which costs us £2,500 and will last 5 years.  Once the prices start tumbling as I think they will as the market matures then there will be much greater take-up - but will this mean that providers go out of business as their margins are eroded?

Amongst smaller clients I have not seen much enthusiasm.  People would generally rather spend a one-off £150 on Sage Instant than £20 per month ad infinitum.

There is also the issue that we are trusting our valuable data to a company we may not have heard of, run by people we don't know in a place we have never been to.  The data centre may be owned by someone else and we are not even told their identity.  What happens if someone in the chain goes bust?  How safe is the data?  What about PI?

I think the professional bodies need to provide members with some guidance.

Glennzy's picture

£12k per annum?

Glennzy | | Permalink

How big is your network John. I have arranged for a client a deal with an IT supplier I have worked with before.  And for a Network of 6 PC's initially it was something like £30 per month for the cloud storage, £120 per month for support + cost of broadband. I agree with your concerns around data security, and if the hosted server owner goes bust and how you get your data back. That will be a worry to clients aswell.

Various …

JC | | Permalink

@jon_griffey – you make good points, however, a great many have been covered multiple times on Aweb over the years. Not sure what your £12k consists of so unable to benchmark the figure, although it does seem quite high. Also don’t know the setup you envisage – is it pure Cloud, remote hosting etc. the combinations are huge and so can the price be.

One of hurdles may be the issue of concurrent licences which bump up the price – realistically providers should allow a number of licences in the monthly price (say 5) and then simply lock additional users out if exceeded. These licences would be dynamic / recycled – i.e. as soon as someone logged out it would release the licence for another. Again don’t know the size of your business or number of licences required

@Andy Price

Just wait until some enterprising company applies for the new domain extension of .cloud or .accounts etc. and then has everyone over a barrel

Of course the real question is, how many of today’s pundits making predictions actually were around or could foresee ASP, SaaS, Cloud at the outset (late 1990, early 2000) – and how many missed the boat and have subsequently jumped on the bandwagon as knowledgeable. As W.Buffet said ‘things always look clearer in the rear view mirror’

We then have the issue of Cloud naming, which rather than being an extension of the original browser/web-based concept seems to have moved away from multi-tenanted architecture and towards anything the marketers’ want to call Cloud – but then the idea seems to be, who cares provided it sells, so there is a huge ‘vague-speak’ market out there?

As for platforms – we already have Force and another approach is Servoy - http://www.servoy.com/

Nevertheless, data-optimised platforms sound remarkably like the current trend of ‘big-data’ which has been in existence for the past year/18 mths or so and therefore can hardly be described a crystal ball gazing

‘.. Jay Kidd also expected a hybrid approach in which both desktop solutions and cloud options would be offered ..’ – again not new. Seem to recall discussions on ‘disconnected data’ on Aweb about 3-5 (maybe longer) years ago. At the time there was a company on Aweb that said the provided ‘disconnected data’ accounting systems

Am rather wary of comment on Sage because of the inevitable firestorm it raises, however they do comprise 10% of the posting so here goes. ‘.. Sage opted for a hybrid strategy, retaining on-premise solutions ..’ – would challenge the comment and question what is meant by an hybrid approach. Surely in this context the concept of ‘hybrid’ means true ‘disconnected data’ whereby apps can run locally or via internet (doen't matter), with or without a connection; with delivery via browser based platform allowing for seamless intranet or internet connectivity (no either/or concept). The resulting data being synchronised the next time a connection is established

On the BI front - proper encapsulated access to underlying databases (i.e. M$ SQL Server, MySql etc.) to allow users to construct their own data extraction and manipulate the resulting data. These may already exist, but so far have not seen one that operates as one would expect, with a wrapped login to the underlying database, allowing the user to have direct access the information they want/need

Nothing so far could be termed ‘disruptive’ and most of the ideas are simply an extension of existing technology rather than ground-breaking

Cloud computing is already in use - much more than you might thi

GBalarin | | Permalink

An interesting point to add to this discussion - actually, more people are already using the cloud than they might think. For example, having a gmail or hotmail account - or even just accessing your work email via the internet, means your data is already on the cloud. These blogs - although from America - might be helpful. A video explaining how prevalent the cloud is: https://www.concur.com/blog/en-us/what-cloud-computing-means-your-small-...

And a thorough, in-depth analysis of the benefits of using the cloud: a post originally published on the Replicon blog https://www.concur.com/blog/en-us/you-cant-manage-what-you-cant-measure-...

 

rjackson@alcoreglobalsolutions.com's picture

Consumer V Business Cloud use

rjackson@alcore... | | Permalink

If you are using any of these consumer based cloud services, its well worth checking the small print. Apparently there are big discrepancies about 'rights' to the data that is stored. The entire IT industry is moving us down that route anyway. Laptops without internal storage, tablets, phones etc. Even Microsoft are ignoring the millions of business users with desktop PC's, mice and no touchscreen. Great, I have given up the ease of use of Windows 7 in favour of synchronising stuff to my phone (the perfect platform for updating a spread sheet). It's like everything, it will really suit some business models, but not everyone. There is a growing market of tech savvy owner managers who are happy to jump on Cloud Accounting platforms and it makes complete sense for them to do so. For the slightly bigger or (dare I say it) older organisations, accountancy resource is still vital and the systems still need to be fed the data. Having access to the internet helps! Big cities are fine, but for rural clients and firms, sometimes the old methods are still essential. That will change though... 

.CLOUD registry

Andy Price | | Permalink

It's interesting you mention the .CLOUD registry, JC. I've written about that before: http://www.publictechnology.net/news/google-recognises-public-opinion-do...

It was lucky someone noticed at the time as Google and Amazon were both applying for it, though looks like they responded to the concerns... I haven't been keeping up with it recently though.

BobEdwardsLandmark's picture

Risk averse or benefit aware

BobEdwardsLandmark | | Permalink

I've over thirty years footfall as a professional adviser. I can remember, vividly, the time it used to take to achieve a snapshot of a client's trading position using manual systems.

I think cloud applications transform client service, and yes, there are data security risks - but minimized surely?

I am particularly drawn to services like Xero, where clients and professional advisers can access the same data platform. Stand-alone solutions just don't hit the spot for me anymore.

 

Where are the SSA results?

slarti | | Permalink

It is all very well have an analysis of some of the results for AccountingWEB's 2013 Software Satisfaction Awards (SSAs) but it would be nice to see a list of what won in each category.

Searching here for "Software Satisfaction Awards" does not find them

 

SSA Results    1 thanks

Andy Price | | Permalink

Hi slarti - all the winners of SSA13 can be found here: http://www.accountingweb.co.uk/article/ssa13-meet-winners/549515 and includes links to articles with further analysis for each category