A business guide to the cloud

Business applications are moving from the desktop into the cloud. But what does it actually mean for businesses and professionals?

Apple may have adopted the name with iCloud – its online application and storage service that was launched with the iPhone 4S late last year – but cloud technology certainly isn’t new. Many of us have been using cloud applications for years, in the shape of Gmail, Hotmail or other online email services. If you work for a large organisation, the chances are that at least some of its IT infrastructure is now “in the cloud”.

Cloud technology is gaining momentum.

Cloud technology is gaining momentum.

However, cloud technology is really gaining momentum. According to a 2011 survey of Australian organisations by IT research firm IDC, 20.6 per cent of respondents were using cloud computing, 32.4 per cent plan to use it within the next six to 12 months and 41.2 per cent after 12 months. Cloud services revenue in Australia is forecast to increase from A$470.3 million in 2010 to A$2030 million in 2015, says Raj Mudaliar, senior market analyst, services, at IDC Australia.

With this type of growth it’s hardly surprising that even traditional software companies such as Microsoft, Sage, MYOB and Reckon now offer cloud versions of their applications. Server software such as Microsoft Exchange and SharePoint are also often available in the cloud, as are most enterprise resource planning (ERP) applications.

For Reckon, at least, the move is paying dividends. Gavin Dixon, CEO of Reckon’s business division, says its cloud business has grown at almost 100 per cent year‑on‑year – so now about half the company’s new customers are buying one of its online accounting products, which include Cashbook Online and QuickBooks Hosted.

The trend isn’t just restricted to online applications, either. Increasingly, IT infrastructure such as storage and servers are being outsourced to online providers.

Some of the attractions of the cloud to business are obvious – everyone understands the cost benefits of outsourcing. However, with cloud apps there are other benefits, too:
  • There’s no capital expenditure. You only pay for a cloud app as you use it, just like a subscription – hence the other common name for cloud apps, software-as-a-service (usually abbreviated to SaaS).
  • No special software is needed on client computers, just a web browser, which means faster deployment and lower hardware and software costs.
  • Being based on web technology also means that cloud apps can be accessed anywhere, including on smartphones and tablet computers, either via a browser or mobile app.
  • This broad accessibility also makes collaboration easier.
  • Software updates are instant (and free) and it’s often easy to add extra functionality as your business grows.
In the case of Reckon, Dixon reports that QuickBooks Hosted has been well received by accountants as well as businesses. “A big advantage is having both the client and accountant accessing the same data file simultaneously, reducing the need to exchange data files and reducing the chance of errors,” he says.  

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The traps

Despite the benefits, there are still concerns about cloud computing. Of the respondents to IDC’s 2011 survey, 67.9 per cent cited security as the main one, followed by loss of control over data (62.3 per cent), and IT governance, regulatory and compliance issues (54.7 per cent).

These concerns were brought into sharp focus in January when the US Justice Department shut down the Megaupload file-hosting service and charged its owners with copyright infringement. Regardless of the rights and wrongs of the case, the fact that millions of Megaupload users lost access to the data stored in their accounts graphically illustrates one of the dangers of relying on a cloud service.

Less extreme but still potentially damaging is the possibility of temporary outages, either at the cloud provider end or with a local internet connection. The cloud’s broad accessibility is another potential security concern if, say, a smartphone is lost or stolen.

Then there’s the confusing array of cloud services to choose from and subtle differences, such as the difference between cloud and “hosted” apps. Both are online, but hosted apps don’t necessarily use web technology, so you may get some but not all of the benefits of true cloud apps.

Customisation is another potential problem. Cloud services are relatively inexpensive and easy to manage because they sell the same service to everyone. If you can’t find one that exactly fits your needs, you could be restricted to a custom on-site or hosted solution.

Pronto Software managing director David Jackman agrees that cloud apps aren’t for everyone. An Australian provider of ERP software, Pronto offers on-site, hosted and cloud versions. Jackman espouses the cloud app, particularly for small- to medium-sized enterprises (SMEs), but warns: “In cases where there are specific needs, for example, sensitivity of data or detailed customisation of the software is required, an on-site solution may be more suitable.”

Similarly, Dixon acknowledges that businesses which use third-party applications integrated with their desktop accounting software may have trouble migrating to the cloud in the near future. “That is an important part of why we will release an online SDK (software development kit) for third-party developers to produce applications that integrate easily with QuickBooks Hosted – we expect this to be made available in the second half of the year,” he says.

Best practices

Of course, there are ways to minimise the risks involved with cloud applications.
“Before embarking on a cloud solution, customers need to do their due diligence in terms of where their data is stored, security, access-uptime issues, software upgrade paths and so on, and work with a trusted vendor with strong credentials,” Jackman says.

Mudaliar agrees, recommending that businesses carefully assess each provider’s financial position, the location and capacity of its data centres and details such as what happens to your data if the company goes bust. Even so, for large organisations he recommends planning for a worst-case scenario by preparing a business continuity and disaster recovery plan, and ensuring the cloud service can provide automated regular data replication, preferably to your premises.

To maximise productivity from cloud apps, it’s advisable to have a fast, business-grade internet connection from a reliable provider. It’s also worth looking out for cloud apps that offer offline capability, enabling you to work (or at least view data) without internet access.
If cloud apps are accessed by smartphones or tablet computers, they should be secured with encryption or at least remote-wipe capability.

Small businesses can take precautions, too, such as ensuring you can easily back up data from the cloud app. Google Docs, for example, allows you to easily select and download documents such as Microsoft Office files. This isn’t always easy with online email services, so instead you could ensure the service can be used with an email client, such as Microsoft Outlook, keeping copies of your emails both online and on your computer.

Apps for SMEs

Here is a small sample of cloud apps available for SMEs.

Accounting applications

CashBook Online
Price: A$198 for first year, then A$18.15 per month
Web: http://online.reckon.com.au/Products/CashBookOnline.aspx
Description: Basic online bookkeeping app for very small businesses. Features include BAS and other reports, a desktop app (PC or Mac) for working offline and links to some bank accounts (for an extra price)
Desktop alternatives: QuickBooks EasyStart, Quicken Home & Business, MYOB AccountRight Basics

QuickBooks Hosted
Price: A$310 per user per year (PC access only), or A$435 for the Premium service (access via PC, Mac, iPad or Android device)
Web: http://online.reckon.com.au/Products/QuickBooksHosted.aspx
Description: Hosted version of the full QuickBooks accounting suite. Features include the ability to work offline (using a separate licence of QuickBooks Enterprise desktop software)
Desktop alternatives: QuickBooks Plus or higher, MYOB AccountRight Plus or higher

MYOB LiveAccounts
Price: A$25 per month
Web: bit.ly/myob_liveacc
Description: Cloud accounting app for small businesses that includes features such as invoicing and payroll, and links to a broad range of banks and financial institutions
Desktop alternatives: QuickBooks Accounting or higher, MYOB AccountRight Standard or higher
Price: A$35 per month (unlimited transactions)
Web: www.saasu.com
Description: Fully featured cloud accounting application that scales from very small businesses (A$9 for up to 50 transactions per month) to medium-sized businesses, including payroll for 25-plus employees
Desktop alternatives: QuickBooks Accounting or higher, MYOB AccountRight Standard or higher

Price: A$49 per month (unlimited transactions)
Web: www.xero.com
Description: Another scalable cloud accounting application, starting at A$29 per month for up to 20 bank transactions, with third-party add-ons available for payroll, inventory, point of sale and more
Desktop alternatives: QuickBooks Accounting or higher, MYOB AccountRight Standard or higher

Sage My Business
Price: A$25 per month
Web: www.sagemybusiness.com.au
Description: Online accounting app for small businesses that includes features such as invoicing, inventory management, BAS and other reporting
Desktop alternatives: QuickBooks Accounting, MYOB AccountRight Standard

Other business applications

Google Apps for Business
Price: A$5 per user per month
Web: www.google.com/apps/intl/en/group/index.html
Description: Google Apps builds on Google’s free Gmail and Google Docs service, adding collaboration features and custom email domain name, and access to other business apps. There’s a free version, but the paid version offers more storage
Desktop/onsite alternative: Microsoft Office with Microsoft Exchange and SharePoint

Microsoft 365
Price: From A$7 per user per month
Web: www.microsoft.com/en-au/office365/online-software.aspx
Description: The cloud versions of Microsoft Exchange and SharePoint, adding advanced email and collaboration features to Microsoft’s free Hotmail/Live and Office Web Apps service (which includes cut-down online versions of Word, Excel, PowerPoint and OneNote)
Desktop/onsite alternative: Microsoft Office with Microsoft Exchange and SharePoint

Price: A$95 per month (unlimited users)
Web: www.salesforce.com
Description: A cloud customer relationship management (CRM) application that scales from very small businesses (A$5 per month for basic contact management for up to five users) right up to large businesses, and includes smartphone access
Desktop alternatives: Maximizer CRM 12, MYOB ClientConnect Plus
Price: From A$12 per user per month (for each business or collaboration app)
Web: www.zoho.com
Description: A broad range of cloud apps, including free word processor and spreadsheet apps. Zoho also offers business and collaboration apps such as invoicing, project management and CRM. You pay for each, although in most cases they are free for a small number of users
Desktop/onsite alternatives: Microsoft Office, among others

Price: A$20 per month for up to 10 projects
Web: http://basecamp.com
Description: Cloud application that allows teams to manage and collaborate on projects, delegate tasks, discuss ideas and more
Desktop/onsite alternative: Microsoft Project Server with SharePoint

October 2021
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