The cloud is not just running a server elsewhere.
One of the most frequent comments I hear from tech-minded people is that the cloud is nothing new. “It’s just software running on a server in a data centre instead of your office,” or, “We’re just going back to mainframes and terminal services”.
Yes, both statements are true to an extent but they miss the point. The difference of the cloud needs to be measured not by how it’s hosted but what the user experiences.
The changes can be split into several benefits.
Improvement #1: Work from anywhere. This is the most basic improvement and it really can be life changing. In yesterday’s story about TradiePad and tradespeople moving to the cloud, plumber Dave Robbins no longer had to trek back to the office at the end of the day to do the paperwork afterhours – filing invoices and job cards, updating accounts and customer lists. He could do it on the road while at a job or if necessary at home.
Benefit #1: Robbins spends more time “on the tools” during working hours and more time at home with family after hours. Not only is he earning more money, he has a better quality of life.
Improvement #2: No more servers. Accountants moving to cloud-based practice management software such as CCH’s iFirm or Xero’s WorkflowMax Practice Manager no longer need to buy servers to run most of their practice. Once these vendors develop their cloud tax solutions, a firm will be able to operate without a single server.
This is huge news when you consider the hassle of buying and owning servers and their accompanying backup tapes, server software and so on.
One golf warehouse retailer told me he had an IT guy look after the server which runs his point-of-sale and inventory databases and he never thought twice about it. The same retailer was forced to go to the cloud because the inventory maker stopped supporting its server software and the retailer conceded it made a huge difference to not even think about backup procedures and replacing hardware.
Benefit #2: Businesses are safer, more robust and less distracted. They can get on with running their business and not worry about buying and running servers. And crucially, a professional IT outfit (the software company) is responsible for backing up their data, not the receptionist or business owner. Ask anyone who lived through the Queensland floods how important that is.
Improvement #3: No more software. This applies to browser-based cloud software where the only responsibility of the business is to download an internet browser. The cloud software company makes all updates to the software automatically and without any intervention from the business owner or employees.
Benefit #3: Again, businesses are safer and less distracted. Desktop or server-based applications need to be updated regularly to stay up to date with the latest features and security patches. Running old versions, especially on servers, can be a security risk. It can also lead to compatibility issues between different versions. Ultimately updating software is an IT process which a business shouldn’t have to think about.
Improvement #4: Software talks to software. You really just have to see this in action. I’ve tried explaining this to many businesses but they don’t get it until someone steps in and shows you. TradiePad’s builders, carpenters and electricians would no doubt struggle to understand why data should automatically flow from your accounting system to job management to inventory to calendar and email – and back again.
But show them how they can look up past jobs at a customer’s site or send the invoice from the van or know they are always looking at the latest plans and they will move to the cloud in a flash.
Benefit #4: Cloud software which talks to cloud software makes businesses highly efficient. In plain terms, Robbins the plumber not only can do his accounts and filing from anywhere, he has to do much less of it because the software does it for him. Which again means more time earning money or with the family.
This relates to an ongoing discussion with a couple of accountants and IT providers about the definition of cloud accounting software. I have to concede there will be plenty of accountants for whom just one improvement, the ability to work from anywhere, will be a sufficient advance to call it cloud. Fair enough.
But to unlock all the benefits it is essential for cloud software to talk to other cloud software, and to make that process as easy as clicking a couple of buttons.
All the accounting software companies now realise this and are working on making it a reality (in tech terms, it means creating an API or application programming interface for their software).
So the next time someone says to you, “the cloud is just a re-run of mainframes”, tell them they’re only half right.
In absolute terms, the move to the cloud will help businesses earn more money and have more family or personal time. This is what hours gained through efficiency and productivity mean to a small business.