The Cloud Part 2: SaaS and Cloud Accounting

In the previous article I explained the cloud phenomenon and discussed most of the usual reasons for and against using it. The Cloud is a relatively new name for something that has been around for the last decade or more. However in recent years this has become mainstream, with new sub-types and acronyms like IaaS and SaaS. The latter is what I will discuss further in this article – Software as a Service, also known as ‘on-demand software’.

It has become increasing possible and even common for business not to buy and install their own software to run programs. Many software (program or application) providers now make their product available in the cloud, usually with access via a web browser. In some cases this will look like the desktop version or it may be a totally new or different product.

The advantages of SaaS (in addition to those of just using the cloud) are:

·      No up-front software investment – payment is usually by ongoing subscription

·      Updates (security and other improvements) can be done instantaneously, behind the scenes and simultaneously for all users – which also allows and encourages further innovation and development

·      Help and support can be better integrated and even offered on a ‘live’ basis

·      Products can be easily accessed from multiple devices and locations (subscriptions are generally on the basis of logins, not sites or computers)

Disadvantages include:

·      Loss (or perceived loss) of control – your programs as well as data, are being outsourced

·      Ownership or access will only continue while the subscription is maintained

·      Internet connection is required – not necessarily all the time as offline access is sometimes possible

·      Products may not be available for certain disciplines or industries which are particularly prone to non-standard systems or variables

The disadvantages may be more perceived than real as many businesses do not manage their IT systems, data, updates and even physical security to the levels recommended or offered by their software suppliers. In addition the risks can be significantly reduced by thorough due diligence and using reputable providers.

Cloud solutions are available in many disciplines such as sales and marketing (CRM), retail, point of sale and accounting. The more standardised systems and process are, the more likely there is to be a product – and the more competitive the market will be. Accounting in the cloud has really taken off in recent years as is ideally suited to this (once the appropriate risk strategies and mitigations are in place). New providers have emerged and have now become major contenders in the overall accounting marketplace – these include companies like Netsuite, Saasu and Xero who now compete directly with more established players like MYOB and Quicken.

Each has it’s own advantages and suitability to particular businesses or industries and as with any software purchase or subscription) the business needs to do it’s own research and due diligence.

In summary Cloud Computing can be, and is, an evolution (if not revolution) and growth opportunity for small and medium businesses in particular.  After all, the sky’s the limit!