What is Cloud Accounting? – Part 1
June 24, 2009What is the cloud? This is part 1 of a 3 part series.
This is a very good question and one that many companies are trying to define with their products. In this first part, I will try to define what the cloud is and where you see it every day.
Typically, the could refers to cloud computing. Cloud computing is defined in Wikipedia as a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet. Users need not have knowledge of, expertise in, or control over the technology infrastructure in the “cloud” that supports them.
Interesting, but what does that mean to you and me? A lot, actually. It basically means you use software or a system that you do not have to maintain, store, or care about. By using this service, you gain economies of scale of large storage and processing arrays, best practices by having learned persons managing the systems, and lower costs through the application of these principles.
I hear many people say they do not use cloud computing. But I argue that anyone reading this email is using cloud computing. Google mail (Gmail), Hotmail, Yahoo mail and similar services are all examples of cloud computing. I do not care where it is stored, how it is backed up, or who manages it. What matters is that I can access it and use it when I need it.
Online banking is another example. I can access my Bank of America account from any computer anywhere. I don’t know where they store my data and frankly I do not care. Other examples are Comcast On Demand, Facebook, Myspace, and a host of other online applications.
But businesses have more choices. Many software companies are putting their applications online and they are hosted as a Software as a Service (SaaS). SAP, Oracle, QuickBooks, and a host of other applications are now online and are classified as cloud computing applications.
What does this mean to the business owner? More and more applications are going online to the cloud. It is inevitable and should be embraced, not feared. It can be an incredible time and money saver.
In part 2 of this post, I will explain the concept of Cloud Accounting. In part 3, I will give the best practices for choosing and implementing cloud technology.
