A lot of people are confused about “cloud” computing, as it is a buzzword used to describe a variety of tools and remote access situations which can encompass a fairly broad spectrum of technologies. In its truest form, cloud computing is a completely outsourced solution (Saas-Software as a service) where the firm pays a vendor a usage fee to access applications and information that the vendor manages in an Internet accessible facility.
CCH Research and CCH SaaS Portal are solid examples of stand-alone cloud products that have been well adopted by the marketplace where the firm pays a fee for what it uses and CCH is responsible for all maintenance and infrastructure. CCH is in the process of building out a comprehensive suite of Saas-based accounting products that will eventually encompass Practice Management, Document Management, Workflow, and Audit Engagement tools that will take advantage of the next generation of programming tools and information technologies. But what do firms do today if they want to take advantage of the benefits of cloud technology and have their entire suite of applications including CCH accounting products, email, Microsoft Office and other applications that they are required to support like QuickBooks, accessible in a cloud-like environment?
The most common answer has been to build their own “firm cloud” by allowing remote access through Virtual Private Networking (VPN) or thin client technology, such as Citrix and Microsoft Windows Terminal Server (WTS), which provides reliable remote access through the Internet. VPN technology allows for a secure connection from a remote site to the firm’s file servers, but it requires a huge amount of bandwidth to be as effective as working in the office, so this is an acceptable solution that firms use to connect static offices that have great Internet bandwidth between them. Unfortunately, it is harder to standardize VPN connections and performance for remote workers such as auditors or consultants in the field, or tax people at home, where the bandwidth speed can vary dramatically.
For situations where the client’s Internet connection is not so great or when the accountant only has access through a digital cellular connection (via an air card or smartphone), firms have transitioned to using “thin” client technologies like WTS and Citrix. In essence the WTS/Citrix servers allow users in the field to work very fast by having their workstation act as a “dumb” terminal into the firm’s servers where keystrokes are sent up, heavy processing is done on the firm’s production servers, and only the final screen changes are sent to the terminal. This makes it appear that the application is running similarly to when the accountant is at their desk in the office. In fact, many firms have adopted thin client technology not only for remote users, but for all firm workstations, which extends the life of most workstations to five or more years as they are only utilized as terminals.
The adoption of this technology ties the discussion back to the “cloud” concept, as it no longer matters where the physical servers and applications reside as long as a person sitting at a workstation can effectively utilize their tools. This is extensively more complex for accounting firms than for most other industries because most accounting firms utilize a very broad range of applications from different vendors, which today are usually not hosted by a single accounting software vendor. To work optimally, any applications that need to integrate should be housed in the same location, which leads to having tax, workflow, scanning, document management, engagement, portal and productivity (Microsoft Office) all in one server farm. This traditionally has been most convenient in the firm’s own office or in an offsite collocation facility, where there is adequate Internet connectivity and redundant disaster recovery options. To further bolster the cloud concept, managing IT within an accounting firm is becoming even more difficult and many firms are experiencing that their IT personnel are having a harder time successfully adopting the latest technologies and keeping up with the support demands of increasingly complex applications. One of the more interesting promises of the cloud is that firms without access to higher level network integration experience can outsource the support and maintenance to a vendor who has specific accounting firm experience at a competitive cost.
This combination of accounting firm complexity, Internet accessibility, and desire to be on the front edge of technology has driven the creation of a hybrid solution, where an external support vendor builds a “custom” cloud for the firm which they can oversee in the firm’s own data center or which the network integrator hosts entirely in their own data center. While some firms have built this with their local IT integrator, one natural evolution has been the emergence of enterprise class hosting companies with specific experience in hosting the entire suite of accounting products that the firm is using, regardless of the vendor. According to industry analyst Greg LaFollette, there are a number of cloud hosting providers including Right Networks, Cloud9, Coaxis, Insynq, Uni-Data, NovelAspect, and MyASP that host accounting firms, but below we summarize five vendors that have specifically targeted the accounting profession and are cognizant of the demands of accounting busy seasons as well as supporting accounting products from an IT perspective.
Xcentric (www.xcentric.com) has built and maintained over 300 networks within accounting firms over the past 20 years and today hosts 65 accounting firms in their US-based cloud infrastructure. Their largest firm is 115 members and they host a total of 1,350 seats. According to CEO Trey James, their cloud service “provides unparalleled performance, security, and redundancy from multiple US-based SAS70 Type-2 data centers and the complete service is often delivered for a cost that is less than the firm’s current IT labor costs.” Xcentric hosts all CCH, Thomson Reuters, Intuit/Lacerte applications and are one of only nine Certified QuickBooks Hosting vendors.
NMGI (NMGI.com): Over the past 30 years, NMGI has worked directly with over 450 firms and began providing 24×7 IT support coverage in June 2010. Today, NMGI hosts 37 accounting firms in their Net Cloud hosting center, comprising 575 seats. According to NMGI Executive Vice President Randy Johnston, this service “has enabled more firms to drive down IT support costs,” which is one of the primary reasons for firms moving to the cloud environment.
Simplified Innovations (www.GoApps.us): According to CEO Byron Patrick, Simplified Innovations TrueCloud ™ is “a comprehensive network hosting solution and IT outsourcing provider specifically geared to servicing the public accounting industry.” Simplified Innovations has 19 accounting firms in their cloud consisting of 250 end users.
MyTroi (www.MyTROI.com): MyTROI is an offshoot of CPA Firm LeMaster Daniels (now LarsonAllen) and currently hosts two CPA firms with 350 seats. According to CEO Randy Kembel, “ firms will continue to look for full-service solutions and the cloud will be a key component in this model. It’s being seen as a way to reduce risk, gain more “anytime / anywhere” access to information and provide a higher return on the dollars spent on technology.”
Oxford Technology Group (www.oxfordtechnologygroup.com): This organization is based in Woodstock, Ontario, Canada and hosts over 300 seats in their OTG Remote Office ™ environment. This includes two Canadian accounting firms with planned expansion in the Canadian marketplace.
The cloud environment works ideally for those firms that want more mobility and to outsource their IT infrastructure to a vendor with experience managing accounting IT. Economically, it makes most sense for firms that are scheduled to replace the majority of their server infrastructure soon or make significant enhancements to it, as well as those firms that may not have access to competent IT support resources for their accounting products. To evaluate vendors it is always advisable to ask for references of their accounting firm clients that are approximately the same size and running the same applications to ensure that the vendor is competent for your firm specific needs. This analysis should also include inquiring about the size of the company, number for firms and seats (users) supported in their cloud as well as the number of personnel they have on staff. Firms should also review their service level agreements and business continuation plans so that they can be assured that the data infrastructure will function effectively, even in a disaster.
This article is reprinted with the publisher’s permission from the CPA Practice Management, Forum a journal published by CCH INCORPORATED. Copying or distribution without the publisher’s permission is prohibited. To subscribe to the CPA Practice Management Forum or other CCH Journals please call 800-449-8114 or visit www.tax.cchgroup.com.