When the Open Cloud Manifesto was unveiled last week by IBM et al I wrote "The (Cloud) Bastards say, Welcome"
And I invited several cloud pioneers who have been at it - delivering cloud based products and services or helping evaluate and nurture them for several years - to discuss the manifesto and what they have learned in Cloud Computing over the last few years.
This time it is Dan Druker, SVP of Marketing and Business Development at Intacct, a financial applications company. He has been in the cloud world since 2000 with Trigo, a supply chain company that is now part of IBM, Postini, an email security firm that is now part of Google, and now Intacct. Here he pays tribute to an unexpected set of cloud pioneers: conservative CPAs.
“When I read the Open Cloud manifesto, I was struck by how looking at the cloud through the lens of a technologist schooled in “grid computing, utility computing, and SOA” can cause you to entirely miss the transformational nature of cloud computing. The key to the cloud is not about technical architecture, it’s about understanding how you can solve business problems in ways that were impractical or impossible without it.
Since 2000, I’ve been lucky enough to have spent time at three cloud pioneers – Trigo, Postini and Intacct. What drives innovation at each of these three great companies is absolutely not the technical or economic characteristics of multi-tenancy, cloud scaling or SOA. Instead, each of these firms focuses on how to create business value that is unique precisely because our applications are cloud-based.
Intacct is a fascinating example of this. Intacct was originally founded in 2000 to help improve the productivity of the accounting profession. Accounting and tax services are a $100 billion sector of the US economy, encompassing more than 100,000 firms and touching millions of businesses. But despite the size of this industry, it had been underserved by technology.
In 2000, the typical accountant operated much the same way he did in the 1950’s – a single professional would serve a handful of local clients, exchanging information in an entirely offline fashion – perhaps mailing paper documents or QuickBooks files back and forth once a quarter or once a year. The founders of Intacct saw that connecting accountants and their clients via a single, collaborative on-line system – moving accounting into the cloud – would cause immediate structural improvements across the profession.
Since the cloud makes physical location meaningless, accounting firms can for the first time align labor supply with client demand. They can apply labor from less expensive geographies and can bring talented, part-time professionals back into the workforce. Because they can serve clients anywhere, it is much easier to specialize, providing better career paths for their people and higher value for their clients. Leading edge firms that have moved to the cloud are beginning to shift their business models from billable hours to intellectual capital monetization.
Because the cloud is always on and always connected, both the accountant and their client always share the same financial information in real-time. This allows accountants to become proactive advisors – they are no longer looking at a QuickBooks file at the end of the month or a shoebox of receipts at the end of the year. The client and the accountant are connected 24x7, bringing tremendous benefits to both – the firm generates higher value billings and the client receives more timely and impactful guidance.
As I said above, my experience is to think about the cloud not in terms of technology but rather in terms of how it can uniquely make business work better. In the world of accountants – that means just about everything - spending less time on mundane tasks, monetizing intellectual capital, becoming better trusted advisors to clients, delivering better service and more easily aligning labor supply with client demand. For the average mid-sized accounting firm, the business impact of moving to the cloud is, give or take, a 50% increase in productivity. This is what the cloud revolution is all about – transforming business processes in ways that have never been possible before.
But don’t just take my word for it. Earlier this week, Intacct announced a historic new partnership with the American Institute of Certified Public Accountants (AICPA), the national professional association for CPAs. The AICPA announced that it will spearhead major initiatives to drive its more than 350,000 members and their millions of clients to adopt “cloud accounting.” They made this move and selected Intacct as their preferred financial applications precisely because, after years of research, they have seen how dramatic and positive the impact of moving to cloud computing is in the real world. They expect it to be so impactful that their subsidiary, CPA2Biz, is even taking on the distribution of Intacct to their 45,000 member firms.
The endorsement of cloud computing for core financial applications by the largest professional organization in North America is a milestone in itself. An inherently conservative organization like the AICPA does not make a move like this lightly. Over time, literally millions of small and midsized businesses across America will be touched by accounting in the cloud. It has a shot at improving transparency and productivity, particularly for small business, on a macroeconomic scale.
To me, this is the real promise of cloud computing. And this is where the Open Cloud manifesto misses the mark. “Streamlining the Data Center” and “Scalability on Demand” are small, incremental ideas. Breakthrough innovation like transforming a $100 billion profession comes from thinking about and addressing unique real-world, high-value business problems that just can’t be solved in any other way than in the cloud.”
