A year ago, all I heard was cloud this and cloud that. I felt like I was in a crowded room where everyone was talking at the same time. After hearing so much and with so much attention given to this subject, I felt like a little clarity and practical application would be helpful. “Cloud Computing” means so many different things to different industries, but for our industry, the public accounting industry, there are a few components that need defining. In addition, there are advantages and disadvantages you need to review so you can make smart future decisions regarding the cloud.
First, allow me to lay out some important definitions, then, we can dig into the information that’s really important. You could run out and purchase only “Web Version” products that run in a browser, which are usually priced with a monthly or annual cost. This part of the cloud is what is called SAAS, software as a service. In those crowded rooms this was spoken of often. At first, I thought people were talking about SAS, statement of auditing standards, which is really about the security of your data in cloud environments. While SAAS offerings are getting better, there’s still room for improvement. The choices in our market are not only very limited, but many of these applications provide less than satisfactory performance speeds. This slower web application speed creates what I call a “productivity inefficiency” that still limit our firms. While more and more of these applications appear online, many have yet to clear the “too many screens” hurdle to complete one task. Applications and services like this often deliver novelty rather than time tested productivity. This causes them to fail as a viable option and should remain on the shelf for now. However, with the advent of new technologies, such as AJAX, web applications are improving, making them a more relevant, useful option as more vendors take them seriously.
Another part of the cloud is what we call Portals. This is like your bank account, Google Search, and other places you go and shop or have an account. For this article we will not discuss portals except to say that every firm should be transferring confidential data through a secured portal of some kind to their clients.
The part of the “cloud” that we need to really review is what’s called ASP (Application Service Providers) or hosted environments. This is essentially taking your Windows applications, yes all of them, and putting them in a cloud environment allowing you and your office to access them over the web through a secure connection. This is normally not done through your internet browser. Instead, it is done with a remote connection similar to what is done with PC Anywhere or GoToMyPC. In most cases using MS Terminal Server Client is the standard.
When considering the ASP model I have identified some important factors you should review.
- Do you need just “cloud” space? This is where you have your own IT people and software licenses and you just want to move your applications to an outside “cloud” server.
- Do you want to rent space and an IT department? This is where you will provide the software licenses only.
- Do you want everything? This would be server space, IT department and software licenses. This is what I call the turn-key solution.
In talking with James Zachman, President of Real Time Data Services, he describes, “To just to rent space is like buying a car without an engine.” Having the right team of IT professionals doing all the admin, installing, and support is important. They offer 24/7 support. His firm which has been at this for over 5 years and currently has thousands of users in more than 20 countries. They are seeing nearly a 100% growth each year further explaining that interest in Hosted ASP is at an all time high. Right Networks, a hosted ASP company, is actually providing the licensing for some applications. This allows you to pay for software monthly as well. Many vendors are looking into this arrangement in an attempt to become a turn-key solution. However at this time, this option is not widely available. The problem is that many software applications are not available in this way.
I have provided the following list of Pros and Cons to help you evaluate whether the hosted model is best for you.
- One place for everything
- Access everywhere at anytime
- Shared files with clients
- In some cases 24hr support
- Less or No need for local IT
- Reduced IT costs up to 50%
- Dynamic memory and disk space usage and management
- Data is backed up
- Better Security
- Fix Costs
- Month to Month contracts
- When replacing computers
- When repairing infected computers
- Reduced backup costs: no remote, no tapes and time
- Reduced software administration; updating and installing
- Dependent on internet connection
- Risk of data exposure
- Concerns about outsourcing
- Getting locked in with one vendor for all software and data
- Additional costs of monthly subscriptions
- Lack of “total” solution
- May need multiple vendors
- Need for some in house support
Seek the opinion of a consultant or two when considering changing to an ASP model for your firm. Our parent company’s software “Practice Management”, is completely “Cloud Ready”. Below is a list of hosting vendors in our industry that we have come across. While there are many vendors out there these are not recommendations, but should only serve as a list for you convenience.