In the recent past, there has been much written by me in research reports, by various peers in the analyst community as well as other practitioners (such as IT), singing the praises of solutions hosted in the cloud or SaaS. The advantages are many, as are the avenues to maximize these benefits. It seems only fitting that I pay tribute to the cloud by identifying and modestly underscoring many of these within this blog environment.
It’s not just my personal opinion around SaaS superiority; the data supports this claim. Leaders are 3.2 times as likely to employ solutions residing in the cloud or as SaaS, measured against All Others (see chart below). Leaders embrace cloud-based solutions, because have cost saving benefits, superior remote accessibility, and tighter security.
Access Information Anywhere
Operating in the cloud creates significantly easier remote accessibility. While seemingly similar to the end user, the remote access choice is typically between Virtual Private Network (VPN) and the cloud. VPN is a private network accessed via public network (remotely), whereas cloud computing translates data to various online services or locations via enterprise applications. The principal benefit of operating within the cloud is that VPN networks are privately owned and maintained by the organization hosting the website or online services. This incurs additional stress and costly expenses on IT resources (i.e. data centers, firewalls, etc.)
Lower TCO and Higher Security
Cloud services differ in that they are enterprises unto themselves. They “rent” space on their servers and often outsource the cost-prohibitive elements of their services, but at discounted prices due to the larger volumes. They also operate with superior redundancies and security parameters. Cloud providers invest excessive amounts in R&D security-based measures because focusing solely on their online service means the viability and success of their business models means unequivocally demonstrating success and confidence in performance around their security. The greater ease of access (by not being constrained to a VPN if remote), the deferred cost savings, and enhanced security all make the cloud an attractive alternative.
The operational benefits of cloud-based solutions are numerous and undeniable. By operating in the cloud, back-up data and storage capacity is greater and frees up on-premises server bandwidth for other vital business operations and is far more scalable. This nullifies strains on IT infrastructure, and reduces necessary capital expenditures for future expansion, while simultaneously decreasing operating expenses.
Collaboration Enhances Productivity
Operationally, cloud-based solutions provide more robust enterprise wide collaboration. This is accomplished via integrating SaaS with enhanced, remote social applications (i.e. web/video conferencing, IM/Chat). By sharing information to key business unites and stakeholders, information and analytics is more timely and accurate. Data silos begin to dissolve. Accuracy is improved by the combined efforts of the inter-related departments. In short — the technology afforded by cloud based solutions lends to an elevated collaborative culture.
Automate Workflows and System Upgrades
The automation enjoyed on the cloud is end-to-end service. The processing is executed by defined workflows and parameters (established by one’s AP/AR guidelines). Automatic Software Upgrades are executed externally, with minimal, to no service interruptions for end-users. Backup/Disaster recovery is also provided as part SaaS offerings, which along with bandwidth and power redundancies, help to reduce organizational IT operations expenditures.
Anxiety around the cloud is also systematically lessened by the growing use of cloud-based applications in our daily lives. Many mobile and smart phone technologies rely heavily on cloud-based application compatibility. SaaS organizations are heavily reliant on their reputations as the attractive option for server functionality in the rapidly evolving smartphone and tablet environments. Because business reliance on platform accessibility is simultaneously developing to a pro-mobile and remote-friendly business world, the accounting solutions that are best situated to adapt in lockstep are those residing in the cloud.
With so many clear cut advantages to operating in the cloud – the question isn’t why you should host solutions in the cloud, but really is why wouldn’t you host them in the cloud? If you can answer this question – please share here. I’m sure those Best-in-Class purveyors of cloud based solutions would love to hear how that is working out. I know I would…