One of the more important lessons the pandemic has taught us is that client and firm applications based on a locally based server are not always the best way to handle this important resource. That’s especially true if remote access wasn’t already in place before the lockdown was imposed. For a lot of practices and their clients, the cloud has certainly become a much more attractive way to access these applications and the data that’s required for them.
But being in the cloud doesn’t necessarily mean that an application specifically written to run in the cloud is the only option open to you and your clients. Hosted applications, or software as a service, are a viable alternative for many practitioners and clients. That decision is not one that’s fixed in time, and having a mix of applications that require a different approach, hosted and/or cloud-based, is often a moving target, as clients are added, and client and firm needs change over time.
Hosting offers options
With the large number of applications specifically written for the cloud, you might ask why you should consider using a hosted application. There are several reasons why a hosted solution might be a better choice for you. Hosting of desktop applications is actually a facet of managed IT, and as such, offers many of the benefits of this approach. One of the primary managed IT benefits is that hosting reduces or eliminates the large capital investment that is required to run many of the applications that can be hosted. Rather than having to maintain a dedicated IT department with large equipment and continual upgrade costs, you and your clients may need only the expertise required to maintain your network and serve the immediate needs of your staff.
As to what applications are the most often hosted, you and your clients have lots of choices. Roman Kepczyk, director of firm technology strategy for Right Networks, pointed out that his company hosts a wide variety of common accountant-oriented applications. “Overall, Microsoft Office is the most common application hosted by firms, which would be followed by Intuit QuickBooks Desktop Accounting. While an increasing number of applications are being natively run in the cloud (QuickBooks Online, Sage Intacct) there are still a significant number of on-premise (noncloud) applications that firms utilize that are being hosted so they are accessible and operate entirely in the cloud. … We see many firms hosting their on-premise tax (i.e., CCH Pro fx, Thomson UltraTax, Lacerte, Drake), audit binders (CCH Engagement, Caseware, Thomson Engagement CS), file/document management, practice management, fixed assets applications, etc., and of course QuickBooks Desktop, which is the most common accounting product utilized by firms and clients alike.”
Cetrom also offers a wide menu of hosted solutions, according to president and CEO Christopher Stark: “Most commonly, clients are requesting our customizable application hosting services for the CCH suite of products (e.g., CCH Pfx Tax, CCH Engagement, CCH Fixed Assets, CCH Practice Management, etc.), Thomson Reuters’ Practice Management CS, CaseWare, Sage, and Intuit’s QuickBooks and Lacerte. We are also providing hosting services for back-office applications, including Microsoft 365, Exchange Online, Adobe Acrobat Pro DC and more.”
As Vinay Chhabra, managing director at Ace Cloud Hosting pointed out, “Accountants need a range of software, depending on the industries their clients work in. Some of our clients using software hosted on our servers are from sectors like manufacturing, not-for-profits, retail and more.”
Making the move
Going from desktop to cloud is not necessarily a difficult process. “Dedicated accounting-profession hosting providers have experience in running desktop applications natively in the cloud, along with any cloud applications they may already be using, so there is no learning curve or conversion to move those on-premise applications to cloud hosting,” said Kepczyk. “For firms and clients wanting to move to new online versions of traditional on-premise applications, the cloud vendor often has to do the data conversion process, in which the firm is responsible for verifying the information was transitioned properly. In many cases, the online version is a new product and not as mature as the firm’s existing on-premise application, so the firms have to go through training and live with the nuances of the new program, which is why so many firms just have their desktop applications hosted.”
Cetrom’s Stark agreed, for the most part. “The transition is simple if you are working with a cloud provider who takes care of the heavy lifting,” he pointed out. “Our team reviews the client’s current IT setup and makes recommendations based on speed, performance and security to ensure optimal IT setup in our hosted environment. We make recommendations based on the best, most secure technology available on the market in order to better serve our clients. In terms of look and feel, our virtual desktop solution is custom, meaning our clients can pick and choose which applications show up on their virtual desktop. That way, everything looks familiar, just as if they were working from their local desktop. Additionally, as part of our migration process, the prospective client gains access to a development testing environment prior to migration so that they can see what our environment looks and feels like and make any necessary adjustment before they ‘go live.’”
Sutter Zachman, a vice president at Cloudvara, said that he expects the move to be relatively painless in most circumstances: “Our turnaround time is typically same day, as long as we have access to the software downloads,” he explained. “Depending on the amount of data to migrate from an existing environment, we normally get new clients up and running within 24 hours.”
Ace’s Chhabra also feels that moving to a hosted solution should not necessarily be a daunting experience. “Moving to the cloud from a local setup is seamless,” he said. “Our dedicated onboarding team takes care of the whole process. We start by creating and delivering the server, then installing and setting up the applications, and the final step is data migration. The process is very smooth and is done in six hours after confirmation.”
Not always the best move
Despite the many benefits, our experts also pointed out that there are situations when it’s better to stay on the desktop.
Ace’s Chhabra elaborated: “Yes, there may be such circumstances. However, such instances are very few. A true cloud-based solution would mean a completely different user interface, new pricing modules and functionalities. In contrast, a cloud-hosted solution offers the desktop application with the same functionalities and user interface via the internet. However, there are a few instances where clients demand online solutions. These may be when clients require minimum functionality and want to perform standard tasks; some cloud solutions offer minimum functionalities and are easy to use. Or when providers offer true cloud-based solutions at very competitive prices when compared to desktop solutions. When clients lack awareness of the seamlessness of hosted solutions. Most clients prefer to avoid these changes and opt for a hosted solution that offers both flexibility and familiarity. That said, most industries are moving towards a hybrid model wherein both cloud-based apps and hosted solutions work together to offer maximum flexibility to clients.”
Matt Groom, senior product marketing manager at AbacusNext, tended to agree — somewhat. “While SaaS solutions tend to be highly scalable and secure, they may be more limited than private clouds when it comes to customization and functionality,” he said. “True cloud/SaaS solutions may work well for firms that want a simple, seamless cloud computing experience with little hands-on maintenance responsibility. It’s important to evaluate the functionality of the cloud application, as some cloud applications have limited features.”
The good with the bad
All of the vendors we spoke with pretty much agreed that as bad as the pandemic has been, they have seen a positive effect on their business.
“Overall, we have seen a significant increase in inbound since March of 2020, with 2020 being one of our strongest years yet for new clients,” said Cetrom’s Stark. “Now that many firms are reaping the benefits of a work-from-anywhere model, many are taking the leap to outsource their IT. Additionally, because of the cultural shift to a WFA model, we have spoken to many firms who are now making IT service, security and performance a priority. We are confident this trend will continue as clients are seeing how this model helps improve business continuity, flexibility, employee recruitment and retention.”
Cloudvara is another vendor whose business has benefited from the increased remote work environment. “We are certainly lucky to have benefited from this stay-at-home work economy,” said Zachman. “On the flip side, there is more of a reluctance due to increasing cybersecurity concerns. Technology-wise, the costs are relatively low, so it becomes an attractive alternative to the clunky and expensive IT solutions of the past. The added flexibility of working from anywhere is just the icing on the cake.”
Kepczyk also sees the mixed blessing: “COVID brought an explosion of growth for all hosting providers, especially those focused on hosting desktop/on-premise applications for accounting firms, as they could quickly transition all their applications and data into a cloud environment while only having to learn new login and security protocols,” he explained. “Over the past year and a half, firms have identified that certain personnel and types of work are more efficient when produced remotely, so many are figuring out their hybrid environments to ensure that those more effective components stay remote, whereas those components that are optimized with physical collaboration are scheduled to be performed within the office.”
Words from the wise
When it comes time for a firm to decide which solution might be optimum for their practice or their clients, industry experts have plenty of suggestions for things to bear in mind.
“If the firm identifies cloud applications that are more robust and cost-effective than their on-premise applications, they should move to them, which we have seen firms do, for example, when hosting tax research and Microsoft Office/Exchange,” Kepczyk said. “Firms that want to add robust and reliable remote access to their existing on-premise applications, as well as enterprise-class security and disaster recovery, should consider moving to a hosted solution, particularly for mission-
critical desktop applications such as engagement binders, on-premise tax, practice management, and QuickBooks Desktop.”
Cetrom’s Stark offered another factor to consider: “We caution and advise all clients (current and prospective) to think deeply about their IT security and how your current IT setup could have a major impact on how you are able to respond to a cyber event. It’s not about planning for ‘if’ but ‘when.’ Who’s handling your data security? Do you have multiple reliable data backups using different methods, separate from the network? Do you have first-person or third-person cybersecurity insurance, and in the event of an attack, who pays? Are you actively educating your staff and clients about IT security best practices — because they are likely your weakest link. It’s best to go the extra mile today to protect yourself in the future.”
Cloudvara’s Zackman added, “Get to know the service provider you are partnering with. Are they reliable? Are they transparent? What types of support channels do they have? There will be times when you need immediate assistance and ‘generating a support ticket’ just won’t cut it.”
Finally, AbacusNext’s Groom pointed out, “There’s no one-size-fits-all approach to choosing the right cloud technology. With the options available today, however, there is a right cloud solution for every firm. We suggest that firms consider the applications they need, then evaluate security, scalability, IT support and cost to choose the best cloud solution for them. SaaS cloud solutions are highly cost-effective because, in addition to the user not having to purchase hardware, there’s no need to hire IT staff to manage a network of software, servers, firewalls, routers or anything else. All software support is provided by the vendor as part of the SaaS offering, meaning that applications are constantly maintained and updated with no effort from the user.”
