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Cloud Accounting Software
[This post was originally made on the AccountingWeb 'Cloud Accounting Discussion Group' forum.]
A different perspective on the cloud from an accounting software developer
As an established business software developer, including accounts packages, we are keeping a close eye on the cloud accounting software market and wanted to make some comments from a developer’s viewpoint that wasn’t based on trying to sell our cloud application.
There are obvious benefits to cloud-delivered software, but for most established businesses and accountants, the benefits aren’t significant enough and there is not enough pain being experienced with existing systems to make them jump over to cloud applications. Yet. No doubt this will change but not at the speed interested parties say it will and maybe not for all markets. Accountsportal’s estimate of 5-10 years seems realistic. Getting some decent Broadband speeds might be a start.
Talking to our customers, mostly established businesses, many aren’t bothered about cloud computing even if they know what it really is. And I’m not talking about people who don’t know much about IT. Accounting software is a tool at the core of their business. It works and they aren’t going to change just because they can access the software from home if there’s a rail strike or someone can’t get a child minder? They deal with these things already. (VPN’s aren’t that expensive or difficult to set up, and remote access software is child’s play.) The view is often that the cloud model is too new and unproven, security is not adequate (even if theirs is worse!) and broadband is too slow and unreliable. This will change, but it will take time.
There are early adopters in all markets and there are clearly benefits to cloud accounting software for many businesses, particularly sole traders and start-ups. However, I wonder how many of them will end up moving to more established desktop applications as their business grows? Ridiculous? Well, that depends on many factors including new operating systems and how quickly the functionality of cloud accounts packages develops.
From what we’ve seen, there isn’t anywhere near the level of functionality in cloud accounting software that you can get with desktop applications. We feel one reason for this is that the development tools for developing cloud applications are not as advanced or mature as those for local applications. What is available is fine for basic book-keeping, CRM, document management systems etc, but not for more advanced accounting. Looking at Microsoft’s Silverlight last year it was clear it just wasn’t up to the task. With the latest version, a lot, but not all, of these issues have been addressed.
One comment was that this discussion wasn’t about technology. Of course it is. People don’t trust new technology and IT firms very much where their business is concerned. Unfortunately this is based on experience. They aren’t bothered about getting cloud software just because it’s new. In fact that’s more likely to put them off. Keeping their business functioning is too important and many are sensibly cautious.
There are also issues about broadband speeds and data centres being able to deliver the reliability and access people need. I saw a message recently: “Twitter is over capacity.Too many tweets! Please wait a moment and try again.”! How is a business going to feel if that starts happening to them when they’re trying to allocate 5,000 order lines? Admittedly, they already experience down-time with existing systems, but at least they know what demands are going to be put on their IT systems and they are in control of dealing with it.
Another advantage to Cloud-based applications is the developer being able to update the software version at a single point and not having to upgrade each customer individually. True, but is this a benefit to the customer or the developer? One customer of ours doesn’t install the latest version of their CAD software until they see the first Service Pack. If the developer is in charge on when the cloud-based application is upgraded, how much hassle could a ‘buggy’ release cause businesses who have no control about when they start to use a new version?
Are cloud applications the future? Certainly in some markets, but maybe not in others. Cloud-based Corporate Social Responsibility (CSR) software is ideal for global organizations, but that is completely different to accounting software for UK SME’s. We are developing cloud applications, but our customers tell us it will be some time before they’re interested in a cloud alternative to accounting software. As we’ve said, it’s a naturally cautious market. Are accountant’s who don’t embrace cloud accounting software right now going to disappear? I’m sure any accountant who has survived the technology changes of the last ten years will adapt to cloud computing as and when they feel it is appropriate and what their clients want and need.
We think we’re being realistic about what our customers’ needs and expectations are. Others may disagree, but experience tells us that it’s going to happen when businesses feel that the advantages outweigh the disadvantages and this will take longer than people think.