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Thanks for the insight
@daveforbes - the insight in to your business is much appreciated - cheers! I'm very intrigued by the lack of SaaS/Cloud offerings in tax and final accounts at the moment. I'd be very surprised if some don't exist by the end of 2010, but will watch with interest.
@alan wright - I'm glad you agree we're not peddling snake oil, but I haven't seen any "of the broad and untenable statements" made in this debate which can't be backed up with facts, case studies and testimony from real customers. Many of us are chipping in here on behalf of that sector of the software industry generically, and of course you will always be able to find specific examples of bad practice or individual cost comparisons that don't fit the" average".
However, if you look at, say, the last 3 years in our accounting space, how many new SaaS/Cloud offerings have come on to the market compared to the quantity of new on premise (shrink wrapped) solutions?
David Terrar
Data entry
@bagmanbill - some of the SaaS solutions have got data entry screens sorted out so you have multi line entry and navigate with tab and enter key without using the mouse to address that problem of fast data entry.
David Terrar
What you need to know about SaaS apps wiki
@dahowlett has just set up an excelent wiki (connecte to the list of SaaS apps mentioned above) with "What you need to know" abour SaaS apps. It lists the arguments succintly and points to some resources and case studies. I've already requested access and made my first contribution, so we should build it in to quite a resource. Please go take a look:
http://saasapps.pbworks.com/What-you-need-to-know
David Terrar
à la mode data entry
@DT - do you mean that sort of thing - http://www.tax.co.uk/cloud/tempus/ts.htm - I like to keep up with all the up and latest trends, use of the tab key etc. so that if we do release browser based versions they are not unfashionable.
there is also the wiki wiki http://en.wikipedia.org/wiki/Cloud_computing
:-)
Snake Oil?
It is rather depressing that the debate, in some quarters, has descended to the Snake Oil level described by Alan. Sadly, I have to agree with him. By often adopting a missionary position (sic), rather than that of true evangelism, the proponents of the hosted cloud service case have failed to do justice to their cause. Their missionary zeal causes blindness to some of the real issues and, dare I say, a certain kind of arrogance when discussing IT issues with non-professionals.
A classic example in these pages is the frequent conflation of security and disaster recovery, confusing two or three entirely separate, though related, issues. Few would disagree that one of the features of hosted cloud solutions is that they should have more sophisticated disaster recovery and anti-virus arrangements in place than SME on-premise systems (whether that is necessarily a benefit is an entirely different question - what is the benefit of a 10-tonne truck when the most I need to carry is 2 tonnes?). However, that is not always the main perceived issue for small businesses. Many are more concerned with confidentiality and, with some justification, are therefore suspicious of prying eyes in the public cloud. (Memo: how many hosted cloud services enable each customer to uniquely encrypt their own data?)
Another example is the implied statement that if you are not using hosted cloud services you are an heretical dinosaur. Woe betide you if you question the benefits - no chance of going to heaven. This ignores the fact that technology has moved on in other areas too. As Dave Forbes correctly pointed out in relation to the rather specious claimed benefit that hosted cloud services enable collaboration (implying that other solutions do not), many businesses use systems which give them a private cloud and plenty of collaborative ability (the likes of Citrix can even deliver your beloved Sage Instant to your mobile phone's browser - what more could you want?)
However, the worst kind of heretic is one who suggests that the online UI's currently on offer might just be a bit clunky. Yet there seems to be a fair bit of evidence on these pages that some users really do find some of them an irritating backward step, especially when data entry is of any serious volume.
Despite this, I am sure that there really are cases where business customers, in conjunction with their professional accountants, will adopt and genuinely gain benefit from a hosted cloud accounting solution. Equally, there are many that will not and who will adopt different IT strategies.
So, where does this leave us? In one form or another, the SaaS/hosted accounting solutions have been around for quite a while - up to 10 years now. Ultimately, customers vote with their feet. At the last count that I saw, the three biggest players in the micro-business and SME accounting space (excluding Excel!) were Sage, QuickBooks and TAS with about 1 million customers between them (about 75%, 15% and 10% respectively). I would hazard a guess that more than 50% of that 1 million was acquired in the last 10 years or less, i.e. over roughly the same period that the SaaS/hosted service solutions have been around.
It would be helpful to compare these figures with the number of customers using each of the well-known hosted cloud accounting solutions. At the very least we would get a better idea of the rate of adoption and, assuming reasonable numbers, this would give a lot more credibility to their proponents. Does anyone know where these numbers are available? If they are not available, can they be made so?
Mark Ramsay
Infoplex
snake oil
Just double checking - we are using the term "snake oil" in a metaphorical sense - otherwise, much like the western equivalent cod-liver oil it is quite rich in EPAs and quite good for aging joints.
Alphabetically http://en.wikipedia.org/wiki/Cod_liver_oil is only a few articles further on from the cloud computing wiki http://en.wikipedia.org/wiki/Cloud_computing
I feel I have wandered off topic.
Wikis
@daveforbes - Wikipedia is (mostly) great for definitions. I'm hoping @dahowlet's resource turns it to a really useful reference point so we spend less time duplicating some of the old arguments here.
In general on UI and user experience, many of the products heralded above do a great job and have the advantage that they've been developed more recently, and have been influenced by consumer apps like Amazon or Facebook.
David Terrar
No compelling case
Read through the posts this evening with interest. It seems the problem is that while there is a good case, it's not compelling.
Access 24/7? So what, most businesses can vpn in to collect data. Generally our experience is that if you can't access your server remotely it's probably your internet connection that's the problem anyway.
Data security? Probably more secure with SaaS if it's a determined hacker but then on your own server there's no risk if the provider disappears if it's on your own server.
Functionality? On premise still has it, just.
Pricing? Short term SaaS appears cheaper, but if you use a product for a number of years then on premise generally wins in the long run.
In my mind the delivery method is still secondary to the functionality that a product provides. When talking about products like Sage "It does everything that my customers want and we already have the skills to use it" IS a valid argument.
I always feel the pro-SaaS providers are like pro-Europeans, ie if you dont agree with us then you clearly don't understand what's on offer. Maybe people do understand but while there are good reasons there arent compelling reasons to invest in it.
As an aside, to point out an error above, David Terrar says;
"@chatman - First, let me say I was quoting Richard Messik, a partner in practice (at Vantis) so these words are from a customer who has made the switch, not a sales guy for a SaaS company. It would be really great to get him to chip in and explain himself."
Actually Richard is the managing director of a SaaS company and responsible for selling it, see;
Compelng case and Richard Messik
@John clough - I'm not going to respond on your "no compelling case" and refer you to the resource "we" (because it's a wiki and everyone can contribute) are putiing together - see above links. On Richard, it's a fair cop. I always think of him in his role as a partner of Vantis and an e-conomic customer though:
http://www.vantisplc.com/vantis/about/people/richardmessik.htm
Maybe some of the other SaaS using practices will chime in.
David Terrar
p.s. It's a great shame that most of this debate above is vendor driven on both sides.
Taste test?
@dave - you're right. I've sucked the Kool Aid and found it tastes very good. But as it's a public wiki you can sign up as a writer and put a facts based case against. If you wish.
@johnclough - check the wiki for facts. It will be fleshed out over time. But try this: Sage down organically, 80% renewals on service. SaaS growing, low base but 10% MOM is not uncommon. Renewal rates mostly in 90%+ Contracted monthly revs running 100-110/115% for most. Now...either these vendors are getting customers to smoke the same crack they're on or something else is happening. Go figure which?
Middle road
Seven points for cloud.
Seven points for on premises.
I tried to balance them evenly.
Can you explain what you mean in laymans terms by "Sage down organically, 80% renewals on service." I take it you are not saying that 20% of Sage's user base leave them each year.
Nothing new under the sun...
Make it stop!
Thus far I had easily managed to resist chiming in here. But my resolve just cracked under the weight of the pressure of all the guilt I'm now feeling after watching the participants on this thread drive deeper and deeper into a death spiral of repetitious nonsense.
The challenge of overcoming incumbent systems and inertia is not unique to cloud computing applications, it applies to EVERY SINGLE replacement application discussion that ever takes place in the world of business today about offline software AND online software.
I said as much to at John and David after attending the cloud fringe meeting - gravity always wins, value must be demonstrated and if you're looking for a get-rich-quick sales pitch for SaaS, don't bother. There isn't one. Selling software is hard. It's meant to be hard. You're not doing it right if it's easy. Plus we've been in the hardest economic recession since the 1930's for the last two years - that doubles down on the difficulty of getting businesses to make decisions lately. Those who are successful are winning for the same reasons people have always won - great product, great customer empathy, ability to deliver, attitude, customer service excellence, etc. etc. There is no cheat code.
There's a popular phrase in the US; "Inside Baseball" when a discussion gets so in depth, so technically focussed as to be become irrelevant to the majority of its audience or stakeholders.
This entire thread is totally Inside Baseball. And since when did everyone become a Gartner analyst?
Save yourselves, run!
PS. The iPad, awesome or what?
Research etc?
@daveforbes - it's all there in the earnings announcements. There's a reason why clowns like me look at that stuff.
@garyturner - iPad looks like a very good snowboard for tiny tots...or an iPhone for a giant ;) And please don't lump me in with Gartner. Firm level tin cuppers/double dippers to the vendor community.
Compeling Case
I have been following this thread with fascination and am flattered that my remarks at Softworld last Autumn are so frequently quoted. To clarify one point that has been raised- yes I am MD of Easycounting which was probably one of the first SAAS solutions on the market. However, I gave up trying to market the product to other accountants some years ago and only use it internally at Vantis. As followers of my blog will have read, we have now decided to mothball Easycounting and have moved all our clients over to E-conomic.
As for the arguments that have been made so passionately in this thread, it is clear that those who get it- get it. Those who don't - won't.
In my experience, our clients who make use of online accounting via our outsourcing service, love it. I have a number of clients who are based overseas and the ease with which we can both access the financial data is invaluable and would be difficult to emulate using more traditional methods.
Working with clients using, what I call a hybrid solution, where they raise and enter their sales invoices and we do everything else, works extremely well.
As for speed - I am bemused by this argument. Broadband internet connections enable these applications to work without any noticeable delay - after all I am writing this on the internet from Belgium and it is as fast - if not faster - than using Word on my laptop at home. After all, how many times have we heard the complaint that the office network is working slowly -or not at all.
It is great that the discussion is generating such interest, and I am convinced that in time the Cloud will become the norm. The argument needs to be put forward by practitioners who are using the Cloud so that real life experiences can be promoted -not just the Vendors or those who argue that any change is bad.
And one last point ... in the last 4 months I have taken on 5 new assignments - one of which has a 5 figure fee - because the clients insisted on using online accounting. In the end that is what is going to force the change!
@mark ramsay
I do think cloud based accounting software aids collaboration and remote access. For me that is the main plus point for cloud.
Collaborative working on a tax return ... not so much.... so for our users a small minority of our users who occasionally need this sort of thing citrix, vpns etc. work fine.
I came to these fora before xmas to find out a bit more about cloud because an accountant I know well (sole practioner, a dozen staff, moving to our software for tax and FAP) has about 25% of his clients using a particular clould vendors offering. My involvment came about because they could only import opening balances into their particular choice of cloud software and they needed all the previous 18 months transactions and I was convinced my programming skills would come to the rescue, but I was wrong. However the business case was compelling enough for them to manually enter 50,000+ transactions for this one client.
However he is equally convinced that the other 75% of his clients should be using the on premisis solution that they currently use.
How should I best explain to him the error of his ways ?
p.s. @richardmessik -on AccountingWeb - until you press the submit button I think you are just typing it on on your computer, so broadband speeds don't really come in to play.
Wild Horses
And one last point ... in the last 4 months I have taken on 5 new assignments - one of which has a 5 figure fee - because the clients insisted on using online accounting. In the end that is what is going to force the change!
Spot on. An email from a user below:
"I've asked my accountant (again!!!) to look at your Partner Programme. He says he doesn't want to use online software so I am continuing to give him my KashFlow data via your Sage export. I don't feel I'm getting the proactive business support from him that I would do from an accountant that embraces what your software offers. I have given up on convincing him now. Can you refer me to a local KashFlow Partner Accountant?"
This is nothing new - we see this all of the time, as do other SaaS vendors. At the end of the day, the practices that don't get SaaS will either be dragged there by their clients or they'll lose the clients.
"it is of such a fine weave - it is invisible only to the hopele
That has convinced me, I get it.
:-)
First time so be gentle
Good afternoon gentlemen
Firstly an introduction.
I was one of the accountants in the fringe meeting and like a couple of the lurkers above, I have been reading this thread trying not to chime in. From what some of you have said, out of the 4 accountants present I would be the 'luddite' who will 'never get it'.
Which is odd, because I most certainly 'want' to get it. My business is actually very hands on with our clients, we also consider ourselves forward thinkers. If there is something going on that is going to be beneficial to my clients and to my business then it interests me. I must say that I was rather embarrassed when I turn up to the meeting and I am informed by all the vendors that THIS is the future. I had obviously missed a trick. I could see people almost laughing when I stated that we were a 'Sage' practice. When did Sage suddenly become a laughable product? and mores the point, why?
For me the 'cloud' concept is a confusion and should not be the driver here. If you can show me a system that does everything that the market leader does AND is an online solution (which brings additional benefits with it) then show it to me and allow the software to speak for itself. If I am suitably impressed by it then I will adopt it. By simply stating that it is the 'future' and if I don't know why then I am 'never going to get it' destroys your own argument immediately and pushes you away from a potential client. It would be wise to remember that accountants base ALL of our decisions on 'Measureable Data'.
As a quick aside, I mentioned at the meeting that I was running many disperate systems internally, that I would like to find out the advantages of 'cloud accounting'. By the end of the day (and I did attend the bar afterwards), I had 2 cards out of 15 or so vendors. None of which have phoned me to see if I am interested at looking at it further. Interesting.
You are right to be confused
Mr Grant - if you've gone through the tortuous process of reading this entire thread then you'd easily be forgiven for being confused. However, several of those commenting have pointed to resources that can help. Here is a page that makes a simple set of comparisons. I hope you find it useful.
To your point: "...If you can show me a system that does everything that the market leader does AND is an online solution (which brings additional benefits with it) then show it to me and allow the software to speak for itself." That's a strange question. Being market leader by sales value does not confer special rights or privileges. If it did then none of the cloud vendors would be in business. The software speaks for itself through adoption. When Sage kicked off, they were the innovators. That is no longer true. There is a dynamic in play that prevents them from innovating. They are far from alone. Microsoft is in the same position as acknowledged by a recently departed senior executive. At the top end f the market, SAP is having enormous struggles with this costing it billions of dollars. The flip side is that every established cloud vendor is growing at rates that compare well to the roaring 90's. Those examples should be enough to imply there is a seismic shift in play.
When I make the case, I rarely start from the accountant's position, which is the Sage default. Instead I argue that cloud services are commoditizing the profession's Pacioli-esque thinking. It is forgivable to think that a system that has lived since the 15th century is not going away. What is going away are the complexities that attach to systems built with Pacioli in mind. Today we are seeing a shift to systems that better reflect the needs of non-technical users while still giving the professional a firm basis upon which to do their job. That's a direct threat to incumbency and a commodification of past structures and practices for both vendors and professionals. It is this dual aspect of cloud computing that makes it the future.
So when companies claim ease of use (as an example) it is not only true but serving to shift power away from incumbents and professionals alike.
When I close out that argument with professionals I say they should see this as an opportunity. Rather than try make the comparisons you demand (which are untenable), consider the value add that cloud brings alongside its disruptive influence.
To your point about contact - not only are tech vendors lousy marketers, most are lousy sales people as well. 70% attrition among software sales people is the guiding stat. There are exceptions. In their defense, I think you'll find they are far more interested in picking the low hanging fruit than attempting to confront someone whose default position is 'no.'
And for absolute clarity. I am not a vendor rep but an ex-partner in a firm who takes a buy side perspective.
@daveforbes
Which error?
:-)
Re: p.s. @richardmessik - that is exactly the 'clunkiness' point.
I don't know who Pacioli is, but I do have some pop trivia
The Cloud somewhat is like pornography
On the album Pornography by the Cure, the first two tracks are
1. One Hundred Years
2. A Short term effect
p.s. just wikied Pacioli so I know who he is now. Cool.
Don't care
Despite best efforts I have lost patience with this thread. Way too many egos competing for attention that no practitioner in their right mind will consider. Closing thoughts.
axw001 - sadly, that is the sort of idiotic assessment I have come to expect from people who'd rather play dopey mind games instead of discussing the substantive issues. If you are in practice then feel free to call me up when your portfolio has deserted you. I can refer you to a good retirement home.
@dave - I guess you're admitting defeat by descending into similar levels of dopeyness. As a s/w vendor I would have expected you to be more responsible. Clearly I am mistaken.
More generally, it is disappointing that people like @dave are so stuck in an alternative universe they're not prepared to see new reasoning...but as a past partner in a firm I should not be surprised.
In the meantime I will mount my virtual iPad and go ski-ing.....
Endnote: good for advertisers I guess but bugger all else...
We have done a bit of both
As I said in an earlier post on the tax software front we have done a bit of both, we had browser based tax return completion at www.tax.co.uk from 1999 until 2001 or 2002. We then went to "pay as you go downloaded on premisis" (is that SaaS ?). We will probably have both browser based and downloaded .exe for 2010 as we want to support Macs and Linux again (we withdrew the Mac version a couple of years ago). We have not yet decided whether the browser based Mac version will be externally hosted or running on a local host on the Mac. We have a backburner project for browser based versions of all our software, but it is very much only on simmer.
I really am agnostic, browser based software has pros and cons.
As for the idiotic axw001 I think he is "libertyaccounts" a SaaS/Cloudist, and he seems quite sensible to me.
Dopey Dave
Discussion is good
I mentioned earlier of an accountant I know who has about 75% of his clients using "on premises" and 25% cloud based accounting.
I said (ironically) should I point out the errors of his ways ?
In general, the clients he has on cloud (or are in transition to clould) are ones that his staff interact with on a weekly, daily or even hourly basis (and tend to be towards the top end of the fees). The clients they deal with on a quarterly or annual basis they tend to use traditional software. This is just one practice and how they have chosen to work.
For them it is the collaborative working that is the biggy. Might be different for other cloud users. For myself as a software developer it is ease of installation and cross platform nature that is attractive in hosted solutions.
Ease of installation of for non-hosted software is improving. (140,000 iphone apps - pointless as many of them are they do install easily). It is possible to work collaboratively with traditional apps, but it is a bit clunky (citrix, vpns etc). No doubt this will change in due course and will all be inbuilt (that is certainly the route we are going down!).
In few years time once they have all hybridised we all be be able to say "I told you so - my camp was right" !
p.s. @JC - if the dig about "every vendor is claiming to be cloud" is aimed at me, then I think that is harsh as we don't claim to be a "cloud vendor", we may have produced browser based software in the past, may do again, but I expect our software to be downloaded and running on windows for the vast majority of users for the forseeable future. If it is aimed at libertyaccounts it would misplaced as they sound the very model of cloud. If aimed at neither, then ignore this :-)
Time to move on to more constructive areas?
While I agree with Dave that discussion is a good thing, I've also got a lot of sympathy for those who have suggested that may have spilled over into "inside baseball" talk and unnecessary personal invective - things that tend put interested prospects off Cloud Computing. I warned you guys about this and we set up the Cloud suppliers' club to cater for the really arcane technical and philosophical debates that should be hidden away from punters, but did anybody listen?
However, I don't think all the effort has been wasted. Some really useful points and interesting tangents have been explored and when time allows we'll mine the ideas and information that have been brought to light by this group to inform our editorial coverage. With all of your help, I'm very confident that AccountingWEB and our fellow Sift Media communities can provide balanced and informed coverage for the benefit of both users and suppliers.
On that score, I've just posted some of the constructive ideas and suggestions that came out of the Business Cloud Summit fringe meeting in a new Getting the message across thread. Having given everybody an opportunity to vent their negativity here, I look forward to seeing a more harmonious debate on that theme.
@cjtrevor
Sage instant £86+VAT from amazon.
When our final accounts customers (accountants) ask what bookkeeping software we recommend for their entry level clients - sage instant is normally what I recommend, because I know they will easily be able to get out a TB (using a ubiquitous chart of accounts) as a csv file and it is difficult to beat on price.
Sage also produce final accounts (Sage accounts standard and SAPA) and tax software. I would much rather not be recommending a competitor.