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The SaaSy Accountant

Software as a Service is a platform that is replacing desktop applications due to its lower operating costs and ease of use. Learn how it will affect your firm.

July 14, 2008
Sponsored by CPA Service Group

It might seem obvious to think that you need a computer to run a computer program. Indeed, that has always been the case. You purchased software and then needed to purchase hardware upon which to load and run the software. As the years went by, and software became more and more powerful, we needed to buy more and more powerful machines to run them. This “Wintel” effect grew companies like Microsoft, Intel and Dell to multibillion dollar entities, and forced users to comply at whatever the cost.

A long time ago (in technology years), a number of Web technology gurus like Tim O’Reilly began to talk about the rise of the Web as a platform that could replace the computer as the place where applications ran and processed data. If the “network is the computer,” as proposed in 1984 by one of Sun’s founders (John Gage), then the new applications would run above the level of the computer itself. This would lead to an entirely new computing architecture and an entirely new user role and set of behaviors.

The future has arrived. The first of a new generation of computer applications are being delivered in a new paradigm based upon using the Web as a deployment platform. The new technology is called Software as a Service (SaaS), and is as revolutionary a development as the Web was twenty years ago.

In the SaaS model, applications run out in “the cloud,” on servers out in the World Wide Web. The user interacts with the application via components that run in a browser like Internet Explorer or Fire Fox. The software is not installed on the client computer. The data (and the database engine and search technology) are not installed on the local computer. In fact, nothing is locally installed. This is a dramatic improvement in itself, since most of the issues with running local software and data arise whenever you have to install them on you local machine.

No installation means no hassles with security and administrator rights, no corrupted, failed installs and no mismatch of pieces of the bundle assembly.

Nothing to install means that you can run any SaaS application on any device that supports a browser. What does that matter? This opens the world to applications running on old PCs, Macs and even cell phones! The domain of what can be done with technology and information is expanding exponentially. A user will be able to access any information or data from anywhere, at any time and on any device.

More importantly, a user will begin to think of applications that are services, delivered in a utility model, as always available, always up to date and safer than any local model could be. If a firm’s office burned down, blew up, was blown away or flooded out, the most critical assets of the firm would be preserved, since they would not be housed in the company office. In the aftermath of 9/11, when it rained paper and dust in lower Manhattan, people began to realize just how vulnerable they were to losses of data and information.

Using the Web as the computing platform is a great answer. All of the applications and data “live” out on the Web. Software and data are delivered as a service to the user. Multiple copies on the web provide business continuity and the ability to scale easily. Virtual computing means employees, customers, and partners can work collaboratively in cyberspace. A blizzard in Michigan during Tax season would not stop tax preparers if they could login (securely) from home to complete returns.

Software as a Service is the coming thing. Companies like Salesforce and Google are offering complex business applications like CRM, ERP and Office Suites in this model. Users pay as they go, have no separate infrastructure or software maintenance expenses, and are free to focus on their core businesses rather than running IT shops.

The Accounting Software market has a few early entries in the SaaS world, and more will arrive over the next year. Products to manage audits, perform client accounting and even tax preparation will open this new world to the practicing CPA.

The future is here. Computing as a utility and SaaS will become the de-facto standard for the way people use technology.

All of this change will lead to broader use of technology in support of the functions of our business and personal lives. The old age of software installed on a local device is coming to an end.

Are you ready?

For more information, visit CPA Service Group.