The Cloud is here - whether you like it or not

 

For those who are regular followers of my blogs, my passion for all things cloud will be well known. I have been writing for some time about how the Cloud is the way to interact with your clients and that accountants need to get on board or loose out.

I had the opportunity the other other day to speak at an Intellect seminar (thank you to David Terrar for inviting me.) The subject matter was introducing Cloud to beginners so to speak and yet in listening to the various presentations as well as making my own I can’t get away from the obvious thought - why wouldn’t any one use it.

The other day my attention was drawn to a blog from Rob Nixon - www.robnixon.com. He has written a piece entitled Cloud - friend or foe and I make no apologies for quoting from it below. The points he makes, make so much sense that it should be a mantra for all things Cloud related.
I quote:

"Cloud accounting – friend or foe?”

…........First of all some facts:

  1. The cloud accounting (or the original term is SaaS – ‘software as a service’) has been around for a long time. The technology has been available for at least 10 years.

  2. Cloud accounting is where your (or your clients) data is stored on the internet (instead of a PC or server) so they can access it easily and efficiently.

  3. As of today there are approximately 3-4% of small / medium sized businesses who use an internet (cloud) based accounting system.

  4. The early adopters (the cool ones) have jumped on it and enjoy the simplicity and innovative approach to it.

  5. Many of the late majority users will be currently concerned about security issues. They are the same ones that were concerned about internet banking security concerns and now they probably use some form of internet banking.

  6. Every single accounting software maker (who started as a CD/Server/Hard drive system) are spending bongo bucks (technical term) to get ‘cloud ready’. In fact I know (from the horse’s mouth) that one prominent supplier is spending in the vicinity of $100M to get ready.

  7. Around the world there are gazillions of dollars being poured into any sort of internet based computing systems. The venture capitalists and financial markets are backing this space.

  8. Cloud accounting systems will not fix every issue you have with your clients ‘cleanliness of data’ – if they input incorrectly then you’ll get a mess like you do now. Muck in – muck out.

  9. It is reported by the software vendors that at the accountants end you will have an efficiency gain of anything from 10% – 40% when your clients are using an internet based accounting systems. That means 10% – 40% less time on the same job.

  10. When a client has their data on the internet it is easier to transport the data from one accounting firm or accounting software supplier to another. Click of a button.

  11. Every week we are hearing of clients who have switched accounting firms because the other firm did not offer an internet based accounting system.

And the final fact:

12. This is going to happen whether you like it or not! "

Now there is nothing new in any of the above but the points made cannot, in my humble opinion, be overstated or reiterated too often. For those who get it, it is just common sense .....for those who don't, well wake up!

And I finish by making the following stement to those accountants who have not yet got the message:

If you are not using the Cloud to service your clients - you are not servicing your clients.

Comments
FirstTab's picture

Suppliers

FirstTab | | Permalink

Some suppliers are not moving in the cloud direction. This is a real problem. Part of the reason is we as consumers just accept this. 

I am thinking suppliers such as VT, TaxCalc, Logical Office BTC and Moneysoft. 

What is the hold up? 

ShirleyM's picture

You can get VT, TaxCalc, etc. on the cloud

ShirleyM | | Permalink

You could use someone who provides hosting, and they will load pretty much whatever software you want. You don't need to wait, you could get this organised yourself now!

Cloud Computing and salesorder.com

Rob Taylor | | Permalink

As a leading UK Cloud vendor we are seeing more and more companies adopt cloud solutions. I fully concur with Richards observations.

Hosted Accountants Ltd's picture

Hosting

Hosted Accounta... | | Permalink

As Shirley says major vendors are going to take a while to move to SaaS or may not do this at all.

That's why people like us (as your IT support) are providing software hosting right now.

It means you can use the software you know, as if it were cloud based, with no worry about backups or being tied to a local server.

PLUS of course you can still use any current or future SaaS bookkeeping packages, all in the same place.

Dan

www.hostedaccountants.co.uk

Brown Outs/Technical issues

nickmiles | | Permalink

What happens to this system when the internet reaches overload and brown outs occur? Also down time from technical infrastructure problems such as phone lines going down whilst the BT engineers play with cables in a local junction box? It is a concern even though I accept that the concept is indeed a tangible benefit.

 

Resilience

Rob Taylor | | Permalink

Ok, when thinking about resilience issues you need to also think about downtime of the more traditional in house installed applications. The larger the company the more problems there are with machine/network issues, installation problems, upgrades - not to mention backups.

For example at salesorder.com our total down time for the last 3 years is less than 12 hours, and that includes scheduled upgrades, network outages etc. Also the backup process is seamless and performed in our case by www.rackspace.com, whose sole job it is to maintain data integrity. 

Of course I am not saying the cloud is perfect, but we need to be realistic about the flaws in installed systems.

 

 

 

david_terrar's picture

Two types of Cloud at the moment    1 thanks

david_terrar | | Permalink

@Richard,

Thanks for the hat tip!

As some of you may know. Richard and I work together (with Adrian Pearson) as the Cloud Advocates so you'll guess I agree wholeheartedly with what he says - cloud's here whether you like it or not.  

@ShirleyM,

Taking what you've got on premise to some form of hosting is a good start and gives you some of the cloud benefit and it can be a great first step, but it's an indicator of a current trend....

TWO TYPES OF CLOUD

The first thing I worry about is that every hosting or managed service provider is re-branding whatever service they provide as "cloud".  It's not helpful and it's confusing the market - we need clarity.

The second thing is that there are two types of cloud offering, either from commercial providers or evolving inside IT departments.  The first is retrofitting existing IT in to the cloud.  Taking on premise solutions already in operation in house on to a hosting or Infrastructure as a Service platform, which definitely adds some value.  You've also got the same thing happening with commercial software offerings where existing. on premise software is being dressed up in cloud clothes, but since each customer has their own instance whatever package it is, they suffer from the same old issues and maintenance problems of old style software.

The other type of cloud is those solutions that have been properly architected as multi-tenant, SaaS solutions where the focus is self service, ease of use, new releases little and often (every few weeks or quarter instead of once every 18 months), and the provider's business model has changed completely to handle a subscription model, so they have to focus on customer service as it's relatively easy for the customer to pick up their data and switch to another provider (notice I said relatively, it's still a big deal but it's 10 times easier than with an on premise solution).  These new cloud solutions also open you up to different business models, ways of collaborating with your customers and partners that wouldn't be available with on-premise or retrofitted apps, or using aggregated data in different ways, benchmarking comparisons - that kind of thing.

So you can take a step towards cloud with these retrofitted solutions, but the bigger benefits are there if you embrace solutions from the providers who are using cloud to the full.

David Terrar

D2C and Cloud Advocates

Neil Ballard's picture

Sometimes Two Really Is Better Than One    1 thanks

Neil Ballard | | Permalink

 

Richard & David have pretty much nailed it.

Virtual hosting is better - just. But you don't get the benefits in spades unless and until you jump in with both feet.

@FirstTab Don't worry about those suppliers that don't. Chances are they don't get it, their business model won't allow it and any kind of nod to cloud will be half-baked and probably useless therefore. So don't worry about them. Go for those who have engineered from the ground up. There so much choice out there.

Among all the benefits, those with real value bake-in usability and a fantastic user experience, resulting in less training, less support issues and greater productivity and tangible value.

@nickmiles I've written about what you can do at your end to counter these concerns http://saasintheuk.blogspot.co.uk/2011/10/sometimes-two-really-is-better-than-one.html. Ultimately service, security, reliability and downright value far outweigh the downsides.

All the best

Neil Ballard

@SaaSitUK

 

 

 

david_terrar's picture

Violent agreement

david_terrar | | Permalink

@Neil Ballard,

Spot on!

David Terrar

Accountants must not give all of the savings away though!    1 thanks

Adrian Pearson | | Permalink

All good stuff which I agree with.

However, I think point 9 is something that intuitively seems to make obvious sense but I would like to see the hard evidence:

"It is reported by the software vendors that at the accountants end you will have an efficiency gain of anything from 10% – 40% when your clients are using an internet based accounting systems. That means 10% – 40% less time on the same job".

If the efficiency gain at the end of the year is offset by more time spent with the client during the year, then there is no net gain at all. This is what I have referred to before as the "collaboration trap".

Accountants must be careful to grab some of the financial benefits of the new working practices for themselves otherwise all of the upside accrues to the client and software vendor. Firms need to organise themselves to ensure that they join in the win-win of Cloud.

Adrian
@topaccountants

 

Hosted Accountants Ltd's picture

Two types of Cloud

Hosted Accounta... | | Permalink

@David

Completely agree with you - there is hosting and there is pure SaaS.

However in the interim years before SaaS takes over the world many people are looking to go hosted for several reasons:

  • Access from (virtually) anywhere which is being made easier all the time by the spread of WiFi in homes, offices, hotspots, 3G and soon 4G.
  • Better infrastructure - running heavy applications like IRIS on flimsy traditional hardware does cause problems - running these apps on better kit improves the speed and experience of users.
  • Data Security is far improved in a high level data centre with replication compared to domestic backup routines.
  • Collaboration - internally or with clients by sharing a virtual server (or access to it).

What is really interesting is the polarisation that Richard touches upon. Even now we see firms where they would never trust anything "cloud" or online even though all their banking (and email by definition) are "in the cloud". Plus of course all their staff are using Facebook, DropBox, LinkedIn, Twitter all the time!

The cloud is here and happening!

Dan

www.hostedaccountants.co.uk

 

 

 

dahowlett's picture

Duh?

dahowlett | | Permalink

@richard - where are the 'facts' of which you speak. You're not providing a single reference for ANYTHING you assert. Those are, therefore assertions and not facts. More to the point, why are you seeking to engage in this stale debate? That smacks more of a vendor representative struggling to gain market share to me. Shouldn't you have moved on by now? Noticed what's happening here for example?

BTW - I can quote some real facts if you like: SAP spent more than $500 million on Business ByDesign, it just spent $3.4 billion on SuccessFactors, NetSuite's investment is more than $1 billion, Oracle has invested a reputed $2 billion on Fusion and bought RightNow for $1.5 billion followed by Taleo for $1.9 billion...the list goes on. $100 million is barely table stakes. 

david_terrar's picture

Trust and Security

david_terrar | | Permalink

@Dan

Agree with you on people's attitude to cloud being different to the every day (and still cloud) web apps that they are happy to use.  This security issue is a big and emotional deal, and some are particularly uncomfortable with something they can't walk down the corridor to touch.  We have to tackle it head on and show that it is much safer to trust your data to experts who can spend much more spread across their whole customer set than you ever could managing your own IT infrastructure in the basement.  Even the banks outsource to co-located data centres.  The key thing is for SaaS and cloud providers to be transparent about their cloud supply chain and to explain exactly how their security approach works.   

David Terrar

D2C and Cloud Advocates

Hosted Accountants Ltd's picture

Trust and Security

Hosted Accounta... | | Permalink

@David

Totally agree. At the end of the day practices want secure, reliable, ideally mobile "applications" that they can use effectively to do their work and help their clients.

Whether that is hosted, SaaS, or something else - in many cases they are not overly worried. They want good support, and to know that what they use for processing accounts, tax returns, whatever, will be there and usable for 3 years/10 years/until they retire or sell.

Everyone has different expectations and circumstances and all suppliers need to be sympathetic to that.

Dan

www.hostedaccountants.co.uk

Richard Messik's picture

Cloud is here

Richard Messik | | Permalink

Denis - even from the other side of the world your contributions are always welcome - if not always agreed with!

garyturner's picture

PFJ or JPF

garyturner | | Permalink

I have to say that the post and the latter comments remind me of the farcical protest group depicted in Monty Python's "The Life of Brian" - only here it's a bunch of over-earnest vendors and people loosely related to vendors jostling for position in who has the clearest definition, with the not so vague whiff of shilling even if it's not deliberate.

http://youtu.be/YawagQ6lLrA

I'd therefore agree with Dennis. It's not adding anything.

Gary Turner
Managing Director, Xero
@garyturner

 

david_terrar's picture

I wish the business case were better understood

david_terrar | | Permalink

....and there was more clarity (and less name calling). Let's move on.

David Terrar

garyturner's picture

I guess...

garyturner | | Permalink

...humour is in the eye of the beholder. My point was supposed to be that people have been arguing the toss about what's cloud and what's not cloud on AccountingWeb for - literally - years.

I thought we all agreed to move on eons ago?

Gary Turner
Managing Director, Xero
@garyturner

david_terrar's picture

I didn't think

david_terrar | | Permalink

...we were arguing with anyone. Just trying to explain/clarify. But there we are. (if it was the usual suspects, I would probably agree with you)

David Terrar

garyturner's picture

It was a friendly argument...

garyturner | | Permalink

...of the kind that starts off politely with "I agree with you, however..."

Gary Turner
Managing Director, Xero
@garyturner

david_terrar's picture

Enough said

david_terrar | | Permalink

...understand where you are coming from and name calling wasn't intended. Cheers mate!

David Terrar

Brilliant...

stuart.lynn | | Permalink

garyturner wrote:

I have to say that the post and the latter comments remind me of the farcical protest group depicted in Monty Python's "The Life of Brian" - only here it's a bunch of over-earnest vendors and people loosely related to vendors jostling for position in who has the clearest definition, with the not so vague whiff of shilling even if it's not deliberate.

http://youtu.be/YawagQ6lLrA

I'd therefore agree with Dennis. It's not adding anything.

Gary Turner
Managing Director, Xero
@garyturner

 

Your humour always brings a smile Gary...

I also agree with Dennis, lots of claims but very little substance

Stuart Lynn

@_stuartlynn

 

 

david_terrar's picture

Cloud accounting – unstoppable?

david_terrar | | Permalink

I agree with Dennis too, particularly for the mid range:

http://www.accmanpro.com/2011/09/06/cloud-accounting-unstoppable/

David Terrar

D2C and Cloud Advocates

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