How Can Cloud Be Better? | AccountingWEB

How Can Cloud Be Better?

It’s been some time since we’ve had an overview of the benefits the cloud provides, and the aspects that need careful consideration. So here’s a few thoughts.

For most people in business, the type of cloud systems of interest are applications such as accounting and CRM, run as “Software as a Service”. For SaaS you have the combination of two distinct elements:

(1)    Packaged software
(2)    Hosting arrangement to run that software

The hosting arrangement will allow you to access the software from anywhere with an internet connection. Through economies of scale, it will typically provide better disaster recovery, at a total cost usually less than running a basic system in-house. It will also require less administration in-house, which can lead to further savings or better use of people’s time.

However it’s worth understanding both the strengths and the weaknesses of the hosting arrangements. “Security” is always important, and the level provided by each system is different for each aspect of security. These need careful consideration, especially for systems hosted outside the EU such as many of the big names in the US.

Your business may be relying heavily on one or more free services. So these are just as important as the chargeable ones.

However good the hosting arrangements, the packaged software must have suitable functionality and usability. A key advantage of SaaS is that it is usually much quicker and easier to carry out a pilot test. A small system can be ready for configuration in hours or even minutes.

You’ll usually only want to pilot one system. So there needs to be some form of selection process to choose it, be it formal or informal. The functionality of SaaS can match, exceed or fall short of established on-premise software, depending on the market. The bigger the system, the more likely you’ll need to be formal, and also consider more established on-premise systems.

In many cases, a SaaS system is being considered as a replacement for an on-premise system, which would otherwise need to be upgraded. By having a formal specification and test plan, the pilot of a cloud system can be more effectively compared.

So overall SaaS cloud systems can be better and cheaper than equivalent on-premise systems. But it’s worth making sure you get the right functionality, and that you are happy with the hosting arrangements.

david_terrar's picture

Not sure what you are asking

david_terrar | | Permalink

Hi Chris,
You've laid out your arguments and opinions, but I'm not sure what you want as a response?

David Terrar

Expired/Ceased users data access ...

JC | | Permalink

@challisc - Here is a question relating to 'Tax in the Cloud' - KPMG paper

The paragraph concerned is:
'.. Can the end user keep any of the physical property in perpetuity once the subscription ends? ..'

With a desktop application the answer is obvious, however, what about SaaS solutions?

Is the answer specifically identified in the providers SLA and part of the 'Cloud Code of Practice '

Fundamental concepts

  • Data without an application to access it is useless
  • An 'expired' user will need access to their data in perpetuity

With the above in mind how do providers deal with this issue and give expired users indefinate access to their data?

Of course over time one could get to the stage where the 'expired' users would prove to be a huge legacy cost drain on the provider with disk space, backups etc. so what happens then?

Also what about the case if a provider goes bust - are there provisions in place for a 'Cloud Provider Community' data/application depository whereby the 'victims' have their data and associated applications ring fenced in perpetuity (similar to eskrow)?

Alternatively, do we go down the route equivalent to Zombie Funds in financial terms?

Just thoughts & questions - but they probably need answers

challisc's picture

RE: Expired/Ceased users data access ...

challisc | | Permalink

@JC, you raise important questions to which there are not universal answers. Each system should be assessed individually as part of being happy about the hosting arrangements.

It is usually assumed that if you cease using a service, you will want to use a replacement service. Ability to transfer data to another system is what’s important, both technically and commercially. There have been cases of providers refusing the release of data, or charging extortionate amounts to do that. So data transfer should not to be taken for granted.

However you may have no further need for that service, and/or simply want to retain the history on the old system for some reason (including legal obligations). Ordinarily you will need to pay some form of ongoing fee to the provider for as long as you need the old system.

What if the provider goes bust? Depending on the system there are often 2 or more providers involved, including the software author and a hosting specialist. There can also be a reseller or other intermediaries. To a certain extent this spreads the risks, for example a new hosting provider can be used if the first goes bust. Each system needs specific consideration.

In any case it's always best to have a reserve system in mind if possible, and preferably have tested data transfer for any business-critical system.  

I’m not aware of a “'Cloud Provider Community' data/application depository”. I understand that the NCC, which administers a software escrow scheme, has discussed some form of cloud scheme. But this has not occurred due principally to the range of technologies and high frequency of updates.

You also mention the Code of Practice, presumably of the Cloud Industry Forum which is at
Tackling the issues above, the Code has the following sections:

Within A.2.1. Commercial Terms

  • Termination basis, terms and conditions

A.2.3. Customer Migration Paths at Contract Termination

  • Declaration of any commercial restrictions
  • Technological implications (e.g. is there technological lock-in that prevents migration to other suppliers or in-house)
  • Format of data provision and transfer
  • Cost implications (e.g. are there any costs associated with recovering data, or for purchasing replacement licenses)

A.2.4. Customer Migration Paths during Contract Execution

  • Implications in the event of the organization itself, or the organization’s suppliers, changing their provision of services, or ceasing business (e.g. is there technological lock-in with a specific supplier)
  • Ability to retrieve data in such situations

So yes the arrangements at termination are a vital part of assessing the suitability of a cloud system.

The question still remains …

JC | | Permalink

@challisc - Thank you for the reply – however I cannot really see any answers other than to agree that termination arrangements are a vital part of assessing a system

Whilst there are often instances where data is moved from one provider to another, ensuring that the incoming provider takes on the responsibility, that is not what I was talking about. I refer to the simple case of a ‘ceased user’ not wishing to use the service in the future with no migration to another service

‘..Ordinarily you will need to pay some form of ongoing fee to the provider for as long as you need the old system ..’ – WHY – the whole point is that this additional payment is not the case with desktop systems. For instance I have a copy of Sage Instant 2000 which can still be used to lookup historic data at no additional cost. Now if I had to pay your suggested SaaS charge since 2000 what would this have ultimately cost me – thousands to get at my own data?

SaaS systems are going ‘head to head’ with desktop and should therefore offer at least equivalent if not a better approach – insisting that an on-going fee needs to be paid by the customer to access their historic data, is I am afraid, a non-starter and retrograde step

Going bust – with the right backup/disaster recovery systems the hosting provider (or resellers) is not really perceived as being the problem, whereas the demise of the underlying software house is potentially an issue. Furthermore, it cannot make sense for any business to double up on providers on the off chance that one goes to the wall – surely this negates the whole benefit of SaaS systems; especially if one has to pay two lots of subscription?

So in the absence of an ‘eskrow’ solution by the Cloud Provider Community, we seem to be back to the issue that the customers are on their own and have lost access to their data – is this really the right approach?

Having read the Cloud Code Of Practice there does not seem to be any section that deals with the basic concept of data lifespan (ideally at least meeting a minimum 6 years statutory requirement) and how the providers should cater for this matter

Here is a hypothetical case – I am an existing customer (accounts system is on a SaaS system) and I have decided to cease trading; therefore there is no requirement to migrate to another provider. However, for a number of reasons (apart from statutory) I wish to retain my data accessible by the application that created it in the first place in the same way as a desktop would provide. Clearly giving me data without a corresponding application to read it is absolutely no use, so what is the SaaS providers solution to my requirements? PS. I do not expect to pay for any on-going access because I would not have to do so if I had purchased a desktop solution

At the very least these issues should be spelled out by both the Cloud Code Of Practice and also the individual SLA’s even if the providers are unable/unwilling to address them in any cogent manner

Perhaps the providers should jump in at this point to identify their own approach to this matter

and ...

JC | | Permalink

Clearly the providers do not wish to engage over this matter - which in itself is quite telling !

Not wishing to name names but there are some who are very good & quick off the mark responding in other areas of the site and yet reticent about this thread

DuaneJAckson's picture


DuaneJAckson | | Permalink

Regarding data? It's been covered a few times int he past.

I don't know what others do but on KashFlow you can export all of your data at any time in CSV files that are Sage Line 50 compatible/formatted. We decided on this format as it's pretty ubiquitous bit of kit and also allays any worries about KashFow itself not being available.

You don't need to remember to manually download the data. You can set the system to automatically email you it either weekly or monthly.

Thank you and ....

JC | | Permalink

@DuaneJAckson - thank you for addressing this head on

Other providers seem more reluctant!

@challisc - There are a number of approaches outlined in the thread , although the question really needs to be whether any solution other than those identified as ‘read-only’ in the following postings is the correct approach

Yes, csv files, pdf’s etc. may all be less demanding upon the provider but the onus is then off-loaded back onto the customer – is this acceptable and why is the customer expected to have any additional IT knowledge in order to accommodate the providers solution?

Obviously a payroll provider (above link) has slightly more leeway because their application is probably an annual one (and may wrap an entire xml tagged data structure inside a SQL Server field), nevertheless it should not be beyond the capability of accounting providers to come up with a ‘read-only’ solution for their systems

At the very least there should be a minimum retention period after the user has ceased to be a customer as part of the Cloud Governing Body recommended SLA – say 7 years retention

In 18 months time (or less)

Malcolm | | Permalink

In 18 months time (or less) we will all be heading skywards! Cloud computing is certainly the way forward in stability and security.

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