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.
Predictions have been coming in from all ends of the IT industry. Frank Gens, senior vice president and chief analyst at IDC expects to see the emergence of platform as a service. He predicts the start of a migration from Infrastructure as a Service (IaaS) to data-optimised platforms that could encourage more accounting software providers to offer cloud options for their platforms. NetApp chief technical officer Jay Kidd also expected a hybrid approach in which both desktop solutions and cloud options would be offered.
And, unsurprisingly, security will also drive much cloud development.
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.
Rod Newing recently highlighted issues with marketing big tech concepts in his blog Big Data: The third of a terrible trilogy. ‘The Cloud’ and ‘business intelligence’ make up Newing's trio of industry buzzphrases that are frequently misunderstood and misapplied by overenthusiastic marketers - and potentially hold back adoption because they confuse potential users and target businesses.
“The really sad thing is that the buzzwords disguise some very solid and valuable realities that can bring genuine change for the better,” he concluded. Cloud, BI and Big Data are much more about about getting the right info to people to make informed business decisions – which should be second nature for accountants. So what can we learn from this year's survey evidence?
What we learned from the SSAs
Analysis of the SSA survey results showed that barely 1,000 out of 16,000 product assessments were submitted for ERP and business intelligence applications. Excel and reporting tools attached to accounting and ERP systems remained the business intelligence tools of choice for most of our respondents.
Sage 200 has now joined NetSuite, FinancialForce.com and Aqilla in the mid-market cloud accounting race, but the majority of shortlisted vendors in the ERP and business intelligence categories were integrated client/server ERP programs. But that did not stop NetSuite from winning the ERP category.
ERP customer advocacy ratings were also lower than in other categories. The average finance manager is unlikely to feel the same personal bond with their accounting software as a one-man band, but the question has to be considered whether ERP applications are failing to meet expectations - a perception that goes back as far as the 1990 boom for often over-ambitious business re-engineering projects.
Despite this apparent reluctance within the AccountingWEB audience, analytics and business intelligence are not going away according to Gartner.
While cloud accounting is becoming the norm for SMEs, this only came about after an initial period of suspicion and doubt. Software developers and vendors will continue to embrace the web – and are usually driven to do this by customer behaviour. Sage, for example, is adapting towards a softly-softly approach. Moving its Sage 200 ERP product to the cloud last year, Sage opted for a hybrid strategy, retaining on-premise solutions.
“Our future focus is on cloud but we’re not killing off the on-premise apps,” noted chief technology and information officer for Sage UK and Ireland, Stuart Lynn. The hybrid approach is one developers and users can feel comfortable with, and suggests the hybrid prediction is a short-odds call for 2014.
The impact of cloud on BI is particularly interesting. Some of those with experience of established BI mention the excessive configuration and investment needed to get them working properly, which has kept them out of the hands of SMEs. Since the cloud gives more agility and flexibility in enhancing and rolling out a remote system - and can make it easier to deliver real-time updates - it could become a vehicle for driving the wider adoption of business intelligence.
So for accountants, a future in the cloud certainly isn’t quite here yet. But considering what we’ve learned in 2013, 2014 looks like it is shaping up to be a pretty interesting year.
What is your view of business intelligence software and the cloud? Is anything holding you back from applying it within your business?