There is a big cloud coming. That much is certain about "cloud computing," a hot topic of late. The questions accountants everywhere are asking are:
Software has traditionally been distributed on hard medium like CD, or by download. The computer program needs to be installed and run on a local machine. "Cloud" software is hosted and run on the web and can be accessed through a web browser. If you have a CPA Website you're very likely already using with "the cloud". Most CPAs use ready-built websites from providers like CPA Site Solutions, Accountant's World, or Complete Site Interactive. Many other accountants and CPAs have built their own website through a service like GoDaddy or Network Solutions. These website builders don't require you to download any software to build or maintain your site. Instead the content management software is accessed online through your web browser. All you need to do is log-in and make your modifications on-line. This is an example of "software as a service", or more colloquially... "the cloud". All the specialized software you need to make the changes to your site is stored and maintained on the server. You don't need to download, install, or update a website editor on your computer to use it.
One thing's assured: the idea seems to already be catching on with accountants. Some experts - like Gregory LaFollette, consultant and Executive Editor of The TechGap, speaking from the 2010 New Jersey Accounting, Business & Technology Show - suggest that unless accountants are quick to embrace Internet-based applications to improve workflow, the latecomers will be left competitively in the dust.
Accountants have always been slow to adopt new methods of doing business, LaFollette explained, citing the switch from DOS to Windows operating systems. "Think of it this way: What are you going to do when a client comes in and asks to post their completed tax returns on your portal so they can download it?" LaFollette asked.
"You will be at a severe disadvantage if you can't do that. Imagine going to a bank that doesn't allow you to do online banking. You'd go somewhere else."
Others, like David McClure, president of the US Internet Industry Association, and Trey James, co-founder and CEO of Xcentric, which specializes in technology for CPA firms, are more cautious about the coming of cloud computing with accountants.
To McClure, cloud computing is the ugly older brother of the decades-deceased client/mainframe system—which today can be found in underfunded education institutions and libraries—yet with an Internet-age spin that he claims is like "putting lipstick on a pig."
He compares the Cloud to client/mainframe in the sense that it still provides control over the infrastructure and software, but it doesn't have any say about where the data actually ends up.
The reach of the Cloud is vast and because of that, accountant data could wind up as far afield as Russia and China. McClue asks how badly do accountants want their data stored in an area with foreign laws on how information can be accessed and used?
According to Trey James, who compares the Internet to a complex network of pipes, the technical side of cloud computing also deserves attention. Some firms may find that they don't have enough connectivity to make accessing the Cloud as fast or efficient as it should be.
James states, a network is only as strong as its weakest link, and if a business wants to invest in the Cloud, it must first make sure its Internet connectivity is up to par.
Undoubtedly, upgrading to cloud-ready status will take come effort. Greg LaFollette makes the point that a number of large companies, in spite of the risk, have already made the commitment, with systems ready to roll out in the next few years - including Thomson Reuters and CCH.
With these important vendors and an ever-growing buzz leading the way, it is assured: the Cloud is rolling in.
Brian O'Connell is the owner and founder of CPA Site Solutions, one of the country's most successful web design firms dedicated entirely to Accounting Websites. His company at present provides websites for more than 4000 CPA, accounting, and bookkeeping firms.