The Cloud – for beginners

It would be impossible to ignore all the recent discussion on “The Cloud” in particular and the benefits of cloud computing generally. However, as with most must haves there is an element of confusion and mis-information and I hope this short article will help clarify some of the issues.

Over the years, there have been many paradigm shifts in accounting practices – in recent memory these have included the introduction of the PC, the internet itself, the requirement for online filing of returns with HMRC and very soon the adoption of iXBRL for tagging accounts and tax computations.

There can be little doubt that The Cloud is the next major shift.

So what is it exactly? It doesn’t help that over the past few years there have been a number of name changes to suit whatever’s fashionable at the time. When I first became involved with the concept some 11 years ago with the introduction of Easycounting, one of the first internet based accounting systems, it was known as  ASP (Application Service Provider). It then transformed into SAAS (Software as a Service)  and is currently being referred to as the Cloud. What it might be called in a few months time is anybody’s guess and is it any wonder there is some confusion!

And to match its differing labels are a variety of definitions. However, in my view the simplest and best summary is:

“ using the internet to host your software applications and store your data files”

The essence and the simplicity is that applications and data are stored, via the internet on remote servers. Information can be accessed and processes run from wherever and whenever there is internet access. A popular definition, coined by John Paterson, of what was then referred to as an SaaS application, takes this concept further…known as the Hotel test it states:

“Next time you’re on holiday, walk into the hotel lobby and log on to your application using whatever machine and browser they have. If you can access all the data and all the functionality in your SaaS application immediately, without having to download any extra software, it’s a true SaaS product.”

Whilst there are many advantages in Cloud use, principal amongst them must be the easier, swifter and smoother communication with clients in that you can both access the same data at the same time. This can only enhance your client service offering and improve efficiency when discussing issues and monthly accounts etc.

Other advantages include:

  • Remote working – it is not always necessary to travel to client premises to access their information and work on their accounts.
  • Anytime -anywhere access – staff can also work from remote locations.
  • Obviates problems of file transfer and issues arising from version shift etc.
  • Upgrades happen automatically – no rolling out of new software every time there is an amendment.
  • Potential infrastructure cost savings

When discussing the Cloud, the question of security often raises its ugly head and as with many issues relating to new technology and ideas, perception quickly becomes reality and takes on a life of its own.

The reality is that security using the Cloud is better than that prevailing in most office networks. Most Cloud applications are operating from dedicated hosting environments where security and back-ups are far superior to anything that could be achieved in everyday environments.

When, for example, did you last check your that your backup (indeed when did you last make a backup?) could realistically be reinstated onto your system in the event of a hardware failure?

There’s no doubt, gainsayers notwithstanding, The Cloud is here to stay and in eighteen months to two years, I predict it will become the norm. A note there for all of us that it’s important to gain the high ground now, whilst the opportunity exists.