Two-thirds of financial professionals don’t know their SaaS from their elbows

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A survey by paperless office provider VersionOne reveals many financial professionals don’t know their cirrostratus from their SaaS. Jon Wilcox reports.

For many months now, astute AccountingWEB.co.uk readers will have noticed an ongoing war bubbling between traditional on-premise software vendors, and Software as a Service (SaaS) providers. The recession has proved to be an ideal time for cloud-based SaaS solutions, with some (like Danish outfit, e-conomic) expecting year-on-year growth of up to 40% for 2009. SaaS Customer Relationship Management provider, Salesforce.com, announced turnover of $1bn earlier in the year, whilst the winners of the Small Business Accounting category at the 2008 Software Satisfac...

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About Jon Wilcox

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17th Jun 2009 15:17

What do people suggest?
I vote for "On demand computing".

It might not suite the cloud computing purists because it allows for the provision of service via solutions using terminal emulation, but in the end who cares? Applications can be made available in lots of ways and people don't value them based on the underlying technology, they look at a combination of things such as:
- cost
- accessibility (any time, any where)
- functionality
- ease of use
- ease of getting going

Pure-play SaaS, where there is one copy of the softare deployed across the web for all users, has the potential to provide the best combination of the above, which is why it's usage is growing so fast.

Mark Davies
e-conomic

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22nd Jun 2009 11:42

Clarity is needed
I agree with this comment - "in the end who cares?". Perhaps we as software developers get too hung up on jargon and technical terms sometimes when we should be concentrating on the impact it has on the end user. Whether it's called SaaS or on-demand software has no bearing on the decision making process.

As Mark says, people don't value software based on the underlying technology. (Or most people at any rate.) What they want is ease of use, utility, cost effectiveness etc etc. It could be made of string and tin cans - if it offered these benefits it matters not a jot.

However, in the same way that you need not understand exactly what Bhp means to buy a car, you don't need to know what SaaS means, only what it can do for you and your business, surely it helps.

For this reason, I believe it is important to get the principle of SaaS across to the end user. Web-based software in its currect guise is a new concept that brings many benefits (and perhaps drawbacks too), and explaining it is important.

If two thirds of the professionals in the survey did not know what SaaS was, it needs addressing. The first step should be a common language and clearly defined terms. At a BASDA meeting last week a room full of software developers tried to put their collective fingers on exactly what "Cloud computing" "SaaS" and "on-demand" may mean. We got some way towards it, so there are steps being made.

Which brings me to my point. The software user cares only about the benefits, not the name. However, we as developers have to strive to defined the terms used, to bring clarity and consistency. This is being done, which will allow those 66 or 67% of professionals to make informed decisions based on the benefits of the software, with an understanding of the basic principle but without needing to think in detail about the technicalities of it.

(For the record; I think SaaS is as good a term as any. Says what it does on the tin. On-demand is a separate thing and should be kept that way. Cloud computing should be reserved for the whole area we are looking at - SaaS is a sub-set, along with many other variations.)

Julian Shaw
Arithmo Accounting Solutions

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23rd Jun 2009 17:11

Why is computing on demand a separate thing?
I'm curious to know.

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24th Jun 2009 10:51

Good point...
... and one which flags up the underlying problem.

You're absolutely right, On-demand could be used as a good descriptive term for SaaS. And I completely agree that, in the end, it doesn't matter to the end user. But I think we should aim for a series of clear terms used consistently, for the benefit of everyone.

I drew a distinction because "On-demand" has been used for some time, and not for SaaS. As you'll know it was used by companies such as IBM quite a few years ago. Even now the term on demand is being used to cover more than just SaaS. Oracle for instance uses the term to cover both their Hosted & Managed Applications and their SaaS apps. SaaS is a new principle, and taking an existing term (albeit one which fits) that has been widely used for something different could cause more confusion than we already have.

To be honest, I'm not keen on the term Software as a Service, very unwieldy, but I've not yet seen a better one, and it looks like it is becoming the de facto term.

Julian Shaw
Arithmo Online Accounting

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24th Jun 2009 11:11

.
And yet we still have confusing terminology being thrown around:
‘terminal emulation’
‘Cloud computing’
‘SaaS’
‘On demand’

I agree that the term SaaS does as it says on the tin, but when you introduce the term ‘cloud computing’ everyone just starts to get confused, but what are the benefits?

As my practice acts for clients throughout the UK this is easy to answer from our point of view:

Access to data simultaneously with client
All clients on the same version
Software never goes out of date
SaaS vendors seem more willing to incorporate new functionality when requested
Functionality is constantly been improved without waiting for a new version release
Not having the worry about backups (should read not having to worry about clients taking bakups)
Not having to worry about viruses corrupting data
Secure client data store for anything including past accounts, tax returns etc

The above are only a few reasons why SaaS works (for us), we also use the winweb system ourselves, this gives us the ability to access via our online system client contact details, emails or even clients data when we are out and about, which although not a regular thing has happened and resulted in dealing with a small (big to client) issue within 20 minutes.

Works for us!

Jason
Holden Associates
A Blog for Small Business

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25th Jun 2009 14:17

Duh?
“IT directors should remember that if they have plans to invest in cloud computing in the future, they will need to convince their organisation’s finance director to release the funds. How can FDs be persuaded to make such an investment when they don’t even understand what cloud computing is?”

This is utter nonsense. The only difference a finance type needs to know - and usually welcomes - is that saas = opex, on-premise = capex. Guess what they choose in a downturn?

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25th Jun 2009 14:24

Brown outs
And how will the recent press articles stating that the Internet will reach overload sometime in the next 2 years affect such strategies? Is there any truth in the predictions of massive "brown outs" in the internet infrastructure as data movements exceed capacity?

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25th Jun 2009 14:29

Not really related but...
...why do they call it a 'brownout'?

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25th Jun 2009 14:44

Cirrostratus or Cumulonimbus? Online Time & Expense Tracking
As there will be lots of people interested in how to keep track of costs in services-based software, please everyone could take a look at our cloud-computing answer to Time & Expense tracking?

Please take a look on: http://www.atlantic-ec.com

Regards,

Neil

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25th Jun 2009 15:54

Where is it?
Call me old fashioned but when it comes to an Accounting Application I think I want it running on a box in an office to which I have the key.
At least you then have an idea where exactly your data is and if it fails you can go an "kick the box" or the idoit who pulled the plug!
If it is "out there floating on a cloud", which cloud and who is blowing it around?
Some will no doubt consider it a hassle to keep backups, install fixes maintain firewalls etc. No that is just good discipline! Which I think is eminently more preferable than leaving it to the "gods" who rule the internet, microsoft, electricity supplies etc etc.
Sooner rather than latter one of these elements of the world wide structure will fail or decide they can hold the rest of the world to ransome. But then I dont have to remind anyone of the oil crisis, the New York power black out or Icelantic Banks?

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25th Jun 2009 17:59

Best of both worlds
When software vendors engage in almost religious ‘wars’ over software models, sadly too often the customer gets caught in the crossfire. In the confusion caused by vendor jargon, licensing and pricing models tend to be confused with the software delivery architecture so that on-premise software is synonymous with upfront license fees and SaaS has become synonymous with the pay as you go model. But in reality, some SaaS models require an upfront investment while on-premise software can be priced with a monthly fee. The IT Director should be making his decision based on the best software architecture for the business, while the Finance Director should be making his decision based on the pricing and licensing models.

There is a hybrid model called Software+Services which is gaining a lot of awareness. It uses a combination of on-premise software and on-line services depending on whichever method of delivery is most appropriate for the application or service. It’s an evolutionary model (originally developed by Microsoft) which offers the strengths of both approaches in a stable environment. The Software+Services approach starts with what is best for the customer rather than with the software architecture decision. It allows companies to ease themselves into online functionality without abandoning the horsepower that can be utilised at the desktop level. Ultimately customers have to pick the model that best suits their needs, many will no doubt want to use both desktop and internet functionality - why not have the best of both worlds?

Bryan Richter
Mamut

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25th Jun 2009 21:53

Don't ignore risk and total cost of ownership
The above replies advocating on premise software as a rational choice ignore (or at least gloss over) the issues of total cost and risk that are inherent with software that you procure for your own exclusive use. Installing software on premise involves a lot more than the cost of the software. So the cost of online, on-demand software must be compared with the total cost of installing your own copy of some comparable software on a server decidated to your use. Which means that you should factor additional cost elements for software AND hardware upgrades, maintenance, backups, on site support, etc. Plus the management overhead of ensuring that all the aforementioned is organised and under control.

The phrase "cloud" is also being used as a scaremonger to make online, on=demand software seem less secure and higher risk. After all, who wants to put their all important records in the trust of a "cloud"? I don't. But most small and many medium sized businesses do not have the infrastructure to ensure security and accessibility to the level that we are able to provide in partnership with our hosting provider Fujitsu. It would be more risky for me to do it myself.

Online software is not new, nor is it a departure from what we already know and use every day. Nearly everyone depends on the availability, reliability and security of the internet for e-mails. 25-30 million of us rely on it for logging on to our bank's online, on-demand system for accessing our bank accounts. Tens of millions of us log on to other web sites on a regular, often daily, basis and we expect them to be secure and reliable.

Common sense dictates that software provided on a one-to-many basis will be cheaper per customer. That is why we can offer a complete accounting system for only £13.50/month. The success of this approach is demonstrated by the fact that our system is used by over 19,000 companies and 3,000 accountants.

It is more cost effective and efficient for most small and medium sized businesses to pay a monthly subscription for online, on-demand software compared to installing their own copy. Even large businesses, including multinationals, are looking at how the online, on-demand model can be utilised in their organisations to reduce their IT costs.

Mark Davies
e-conomic

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26th Jun 2009 12:11

Clouds
Cirrostratus? This is actually a cumulus probably of the humilis variety - I thoroughly recommend The Cloud Spotters Guide. Sorry if this comment is hardly relevant to the thread.

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26th Jun 2009 12:16

Brown out
I believe it relates to a reduction in power, rather than a complete cut. Same difference with internet, however. Traffic will grind to a halt. Online accounting systems won't work in short. There is talk that large systems such as the awful aberration of an NHS attempted single system simply will run too slow to be effective. That's if it ever works at all.
I notice none of the online accounts providers have responded to this comment, although I might have missed some here

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26th Jun 2009 13:21

brown out
I suppose you could argue that if there is a "brown out" power would be reduced to all computers - our servers, invidual and office systems. If that happens, it wouldn't matter whether it was web based accounting software or not. The fact that we have back up generators and other measures to ensure no loss of service would become almost irrelevant - if your computer dies, then it dies for all your software.

Whilst on, I have to agree with the comment from Bryan above - "Ultimately customers have to pick the model that best suits their needs". Completely true.

And that is the point of this discussion. We should not be proselytising; we should be letting everyone know that there are alternatives, and allowing informed decisions to be made. In some instances a traditional system will be most appropriate; sometimes software as a service; other times a combined version. By clarifying what the alternatives are, we can help simplify that decision process.

Julian Shaw
Arithmo Accounting Solutions

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26th Jun 2009 20:18

Response re. brown out & failed NHS system
An anonymous poster mentioned that none of the online providers had responded to an earlier comment on a newspaper article that suggested the internet will "reach overload" in the next two years. There has also been a reference to the failed development of a single systme for the NHS.

I hadn't responded to the "overload" comnment as I felt it was not something anyone would take seriously. If the internet was to become slow or somehow overloaded, the world as we know it would grind to a halt. It won't happen because it cannot be allowed to happen. More to the point, the billions of people and businesses paying for internet services are providing the funding needed for ongoing investment and future capacity.

The reason the NHS project failed was the sheer size of the project allied to poor management, leading to costs running out of control. This bears no relation to the many well designed, highly performant and properly managed online applications that are now available. Speaking for e-conomic, I can state with confidence that we understand the level of ongoing investment required to ensure that our application continues to perform as our customer numbers grow. When I joined the company we had less than 10,000 users, now we have over 30,000. Our subscription pricing must seem low to those who are used to paying thousands for their accouting software, but it is all we need to pay for further investment in the application, the infrastructure that supports the application, and further expansion into new markets.

Mark Davies
UK Country Manager
e-conomic

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