Take your time, says APS CEO.
This week I dropped into a demonstration session for APS, Reckon’s practice management software for chartered accountants, and the message about the disruptive effect of cloud computing was intended to soothe.
“Migration is going to take decades. You don’t need to panic,” said Brian Coventry, APS CEO, quoting a 2009 Gartner report. “It’s not like lemmings off a cliff.”
It’s a familiar line from desktop and server-based vendors who are trying to work out how to move their software to the cloud without losing customers or profitability in the process. But jumping up to the cloud while holding onto the ground is gymnastically difficult. The corporate messaging ends up a little confused as a result.
Coventry was spruiking APS’ hosted platform APS Private Cloud. Instead of an accounting firm running APS on its own servers it can rent access to the software on a per user, per month basis from APS’ own data centre.
Coventry explained that the greatest advantage of cloud is reducing operating expenses. Accounting firms want to reduce the opex by half. “How do we do that? The answer is cloud.”
APS Private Cloud can be streamed to an iPad as easily as a PC which means accountants can view their files anywhere they have an internet connection.
In APS’ view, the increased flexibility for employees and lower capital costs from its Private Cloud solution, combined with the years of development in the software, place it at the apex of a pyramid made up of “layers of cloud”.
The pyramid looks like this: the pinnacle is integrated cloud services such as APS Private Cloud; below that is specialist services such as Salesforce.com; then software-as-a-service (SaaS) applications for SMBs such as Reckon’s CashBook Online and Xero; then freemium services such as Gmail and Hotmail.
At the bottom of the pyramid lie infrastructure-as-a-service (IaaS) vendors such as Azure, Amazon and MegaUpload. Accounting firms should be wary about storing their data directly on these services, Coventry said. “You could be putting yourself in a position where that is not safe. It’s a bit worrying for your clients’ data.”
I didn’t understand APS’ pyramid; for one thing, Gmail, Salesforce.com, Xero and Cashbooks Online are all SaaS, so how could they be on different layers of the pyramid?
Coventry explained to me afterwards that the pyramid reflected the value of the software to clients (my phrasing, not his). The feature-heavy APS had been written over many more years than Xero et al., and was now running on hosted infrastructure to boot.
But this was not the end game, it was just a stepping stone.
“Make no bones about it. SaaS is the direction we’re going,” Coventry said. “That is where you get real efficiency.”
This is very true and if you were to draw a pyramid based on efficiency – in how the software is bought, delivered, consumed and maintained – SaaS would be at the apex and a hosted service such as APS Private Cloud a layer or two below.
APS is in the process of turning the 15 modules in its practice management software into individual SaaS programs, the first of which is timesheet billing, Coventry said. But the time billing SaaS program is not yet available and in the meantime SaaS players such as Xero and Saasu keep adding features and customers. “It takes time to move all those modules,” Coventry said.
The problem seems to be one of resources. APS employed its developers to modify its software to run in a hosted service and work on touchscreen tablets. Now the developers have to totally rewrite the software as a SaaS.
In future, although APS will maintain its on-premise and hosted versions, it will only develop for SaaS because the company can’t afford to develop for all three platforms, Coventry said.
So APS’s messaging to its customers boils down to this: “The cloud is the future but you can save money in the short term with our hosted (Private Cloud) solution. Please hold on while we rewrite our software for the cloud.”
Will it take decades to move to SaaS? I doubt Gartner still thinks so given all that has happened in the past four years. The question for APS is will the majority of accounting firms move to SaaS within the next two years, before it has time to rewrite its software?
Right now no-one knows the answer to that one.