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What is Cloud Computing?

The most significant development in software applications since the move from DOS to Windows is occurring in the market.  As companies begin their search for new accounting and other business applications, they are considering not just functionality, but whether  their application should be a traditional on-premises application or a cloud-based application

What is the difference between a traditional on-premises application and a cloud-based application?

Examples of on-premises applications would be Sage ERP Accpac or QuickBooks.  You purchase a software license and have the software loaded onto your company’s server.  By virtue of being housed on your own hardware, which is usually physically located in your office, the software is described as “on-premises” and “single-tenancy.”

When you purchase an on-premises software solution, you have a particular version of the software.  As time passes, the software publisher will release new versions of the software.  In order to keep up-to-date on the software, you pay an annual maintenance and support fee and the publisher makes new versions of the software available that you must install in order to take advantage of any new features.

In the meantime, you must also keep your servers and workstations (PCs or laptops) up-to-date.  Maintaining networks and systems and scheduled updates is usually done by your IT department.

Examples of Cloud-based solutions include Intacct and Avectra.  Other examples that you’ve likely used include LinkedIn, salesforce.com, Facebook, and online banking.  These solutions do not reside within your company’s walls.  They reside on the systems of the publisher at large data centers – and are sometimes referred to as “multi-tenant” solutions.

The term SaaS stands for Software as a Service.  What it means is that rather than purchasing a license, you subscribe to a service that provides the software, which is called cloud-based.  Depending on the solution, you might pay your subscription on a monthly or quarterly basis.

Because the solution is “in the cloud,” you access the software via the internet and your company does not have to invest in the purchase and maintenance of the servers where the solution resides – the solution publisher does that.  Another advantage of a cloud-based solution is that your IT department does not have to worry about any upgrades to the solution – that is handled by the software publisher as well.  At any point, when you log into your cloud-based solution, you are accessing the most current version of the software.

Many companies are looking at the cash flow-friendly nature of monthly subscription fees versus upfront licensing fees as a benefit.  There is also the potential for reducing or eliminating IT capital costs, chargebacks, and other operational expenses  within the company as departments deploy cloud-based solutions.  A further benefit is the anytime, anywhere nature of the solution since all that is needed is an internet connection.

We can help you develop a selection criteria that addresses your current as well as future needs to see if a cloud-based solution makes sense for your company.

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