hosting provider – Cooper Mann Consulting

October 20, 2015September 25, 2018

QuickBooks Online is Pretty Cool

Doesn’t Simplify Overall IT Requirement for SMBs

Intuit is doing some pretty cool things with the QuickBooks Online product. I really like the fact that there are mobile apps available, the product can auto-send reports, form templates can be imported from Word, and there’s a desktop application available to replace pure browser-based access. There are those who might believe that I’m a QBO hater, but I’m not. I am evangelist for cloud computing, mobility and cloud service… I just don’t necessarily believe that only one flavor of “cloud” applies to everyone. QuickBooks Online is some good stuff – but is it really making things simpler?

What QuickBooks Online does better than QuickBooks desktop, really, is provide a cloud-based accounting solution for small businesses for an affordable price. QuickBooks Online was built as a SaaS solution, so web-based access and a subscription service model are part of the package. On the other hand, QuickBooks desktop editions were designed to not simply function for the user, but to deliver the user experience expected from software running on the given OS/platform (e.g., Windows or Mac). When QuickBooks is running on Windows, it behaves like a Windows application and uses standard Windows conventions. Same deal with QuickBooks on Mac. It’s … Apple-y. Whether on Windows or Mac, QB desktop editions are considered to be the workhorses that really help get things done.

What some folks don’t know is that QuickBooks desktop editions can be hosted in the cloud so that they also have the benefit of anytime, anywhere accessibility and managed service. Businesses can have their QuickBooks desktop applications hosted and managed by a cloud service providers, and can access the applications and the data via the Internet just as QuickBooks Online users are able. The oft’ forgotten additional aspect of cloud hosting is that the other business applications may also be hosted by the service provider, turning the entire business IT environment into a managed, anytime/anywhere resource.

When I look at outsourced IT and how businesses might benefit from subscription and SaaS solutions, I tend to view things more holistically rather than pursuing one application or functional area at a time. The reason is that the business is an ecosystem of users, processes and capabilities. Altering one part of the ecosystem will, without doubt, impact the others. Note that, in many businesses, the accounting and finance systems are integrated with line of business applications and operational processes. At minimum, there are likely to be connections or dependencies upon certain standard productivity tools for reporting and such, potentially generating lots of data.

Consider the QuickBooks Online capability of allowing form templates to be imported in .docx format. Those templates had to be developed somewhere, and it was probably in MS Word on guess where? You got it… the desktop. How is that local non-QBO data being managed, and how accessible is that part of the system? Having accounting in the cloud is cool, but may also create separation in data silos and breaks in processes when it is removed so completely from the rest of the business information systems environment. This introduces a layer of complexity for the business, where making sure all the information assets of the company are protected and recoverable isn’t as easy as doing a complete backup and archiving offsite, especially when the data is in a variety of formats and it doesn’t all exist on your PCs or servers.

Addressing the compartmentalization of business data becomes a potentially bigger issue when connecting two or more SaaS solutions via API. Granted, this type of “extension” to the financial system helps businesses apply the right tool for the job, and ensures that workers are interacting with the information they need and not the entire financial system. Yet small business owners generally lack the technical sophistication required to understand where and how to fully preserve and protect even a single business data silo much less multiple silos. The ease of connecting systems to each other in the cloud often overshadows the complexity of creating a single data management strategy for the business. And another item to remember is to disconnect those SaaS services which are no longer in use, as they represent an ongoing potential threat to the security of your data as long as they are accessing it without the data owner’s watchful monitoring.

The moral of this story is that I believe businesses that approach their information technology needs with a holistic view will have greater success than those who focus only on particular processes or functional requirements. I think QuickBooks Online is pretty cool (especially now that there’s a desktop app!), and I (and a few million others) think QuickBooks desktop editions are pretty good, too…. They’re just different pieces of software that do things differently – each carrying different risks and rewards. The point is that neither solution stands alone in the business operation, so each should be viewed in the context of the overall business information management strategy in order to see whether they’re properly selected, placed, and managed. Trying to make things simpler doesn’t always actually make things simpler. Welcome to the cloud.

Joanie Mann Bunny Feet Make Sense?

March 5, 2014February 28, 2017

Small #NonProfits, Crummy Computers and the #Cloud

Small NonProfits, Crummy Computers and the Cloud

There are many benefits included in the “value proposition” for cloud computing models, but there are some hidden gems in terms of how these outsourced IT models can specifically and directly address one of the biggest problems facing many smaller nonprofit organizations: they have to use old, outdated, and often just pretty crummy equipment. But now it’s OK, because even crummy old PCs can work just fine when the applications are hosted in the cloud.

Small nonprofit organizations often rely exclusively on donations to keep the business running. Donations don’t always come in the form of dollars; sometimes donations include used computer equipment. For many nonprofits, using donated equipment is the only option they have due to various budgeting constraints, and nonprofits need computers just as badly as any other business. Not only do these underfunded businesses have to try to operate with what most users would consider to be sub-par equipment, they frequently operate their systems and networks without the aid of skilled or experienced technicians. For a small nonprofit organization, keeping up with business is tough when the computers and software aren’t able to fully meet the need.

To complicate things even more, many people working in smaller nonprofit organizations are mobile workers – functioning either as part-time participants or users who simply need to work from a variety of possible locations. And they almost always have to use their own mobile devices. Supporting a remote or mobile workforce is particularly challenging when even the most basic of computing requirements are barely met, so addressing the variables of everyone having their own mobile devices and remote computers is frightful at best.

With the introduction of cloud computing, affordable broadband access, and value-priced application hosting services, small nonprofit organizations finally have a workable answer. Working with an application hosting provider, the business can move applications and data to outsourced infrastructure, where the solution is effectively delivered back in the form of a subscription service.

Accessing applications and data on central servers, and using those applications from a “virtual” or hosted desktop, can allow these small businesses to use current versions of business applications without having to purchase the powerful desktop or portable computers necessary to run them. The applications run from the host’s servers, reducing the local PC’s involvement to handling the display, keyboard and mouse inputs, and printer outputs. Even older computers which would be incapable of running current versions of applications like Microsoft Office or QuickBooks are generally able to access and run those applications from the cloud.

Predicting costs of operations is essential for any business but is crucial for the nonprofit. Budgeting around a limited financial resource, small nonprofits are hard hit when unplanned failures in computer systems occur. In many cases, there simply isn’t room in the budget to recover from these events, and productivity and performance suffers because of it.

Approaching IT services from an outsourced perspective, these small businesses can build a significant level of predictability into their business technology costs – and get higher levels of fault tolerance and disaster recovery capability along with it. The hosting service is responsible for maintaining the operating environment, securing the systems, backing up the data, and keeping things running. The costs associated with server hardware failures, and even regular server and system maintenance, are covered in the subscription service. This means that unexpected break/fix, update and maintenance costs are no longer of concern.

Every small business, not just the nonprofit, should explore the options available to them with cloud and application hosting services. Performance within any organization depends on the systems and tools available to get work done. Owning the problem of managing and maintaining the information technology platforms and systems makes little sense these days; better to outsource the problems to a professional service provider. Not only can this type of service introduce predictable costs for business IT services, it makes working with crummy old donated equipment a workable situation.

Joanie Mann Bunny Feet Make Sense?

September 23, 2013

Licensing the Cloud: Software Distribution and Use in a Remote Access World

Whether we like it or not, and whether we agree or not – software developers have a right to decide how and where their licensed products are run. There have always been arguments in this area, where software license purchasers take the position that they should be able to do what they want with their licenses, and where commercial software developers believe they have the rights to dictate authorized usage. Truly, when it comes down to the legalities of it all, the software companies will win because they have the legal footing to fall back on – the EULA containing use rights and terms which licensed users have agreed to.

The problem has been ongoing, with software developers constantly and consistently seeking methods to reduce unauthorized software distribution and unsupported use, and users spending amazing amounts of time and resources finding ways to break the rule. Copy protection, “phone home” license validation models and all sorts of approaches have been developed to prevent software theft and unauthorized distribution. But it happens anyway – a lot – and the cloud is turning into a great facilitator. Surprisingly, it’s an “in your face” approach, too, where the previous iteration of web-enabled software theft (unauthorized digital downloads and license cracking) was fairly quiet and tried to be secretive to stay out of the gun sights of the developer. Today’s “flavor” is right out there, being marketed to any and all who care to view the ads.

With businesses more frequently turning to “cloud” server providers to run business applications, it is no wonder that the IaaS and PaaS companies would want to make their services easier and more valuable to acquire than the next guy’s. Aside from a groovy control panel and great networking and VM pricing, the added value from these providers is in the applications they are able to service. More frequently, hosting service providers are marketing their solutions in the context of the applications customers run on the service (which makes sense, because the application’s what really matters). Leveraging the brand value and recognition of popular commercial software products makes sense, as it improves overall visibility and increases the potential of the “right” kind of prospect engaging and becoming a customer.

The problem arises when these service providers sell hosting services for, or which support, applications they are not authorized or licensed to deliver, and this is where the argument comes full circle. The hosting provider wants to host applications customers use, customers have licenses for those applications, but not a right to have them hosted. The host deploys the application anyway, because that’s what the customer wants. “What’s the risk?” they ask… “the customer has the software license”.

The risk is, unfortunately, greater for the service provider than for the customer. Even if the customer has a license for the software product, that license may not actually be eligible to run on a hosted server. “Businesses lease computer equipment all the time, and they can run the software on those systems” is the next argument generally offered by the service provider. But, in the eyes of the software developer, there may be a big difference between leased equipment run in-house versus subscribed platform services deployed via a commercial hosting provider. Even Microsoft recognizes the benefit and value of providing “mobility” of application licensing, and has specific licensing models to allow commercial hosts to deploy customer-owned licenses. While many service providers understand and recognize the requirements to ensure that customer applications are properly licensed for hosted delivery, there are a great many who think the rules simply do not apply to them. These folks are introducing a great deal of risk into their hosting businesses, even if they are not willing to recognize it.

When a customer runs their software in an unauthorized manner, they risk losing the rights and benefits associated with their software license. When a commercial hosting company runs software on their servers that they have no right to install and run… they are potentially guilty of unauthorized software distribution and copyright theft.

Actions against facilitators of unauthorized content distribution – you can equate “software” with “content” – have received much press in past months, yet much of the discussion centers on music and video content (as in the Megaupload story). Actions involving commercial software products tend to be somewhat less visible, probably due to reluctance by commercial developers to have what could be perceived as negative press flowing through social media venues. It’s popular to protect music and videos, but hosting providers aren’t seeing the wisdom of preserving the integrity of a commercial software product license. Instead, they’re relying on the customer to indemnify them (the customer has a license, remember?). But the customer can’t protect the host; the host must protect the host – it’s the prudent business approach.

Infrastructure providers, platform providers and businesses operating as application hosting companies should pay close attention to the content living on their servers. Taking a position that the customer has the right to do whatever they want with the system is not a viable position; the precedent has been set that the hosting provider is responsible for the content on their systems. In the case of hosts offering service for small business applications like Microsoft Office and Intuit QuickBooks, for example, it is essential that a service model which conforms to and supports proper license usage be in place, and that any required authorizations are, too.

Software is just another form of content, and the cloud makes distribution of and access to content a lot easier, even when it shouldn’t be.

Make sense?

September 12, 2013August 11, 2017

Lease Accounting Rules, Small Business Financing and the Cloud

Cloud Service Financing There are changes in lease accounting rules that may have broader implications than expected. Lease accounting, or accounting in general, isn’t exactly an exciting topic and generally doesn’t come up in conversation. But the changes to how business equipment and other leases are accounted for and reported could become additional fuel for cloud adoption by businesses – small business looking for financing, in particular (= lots).

First, what does accounting for leases have to do with small business financing? Quite a bit, actually. The balance sheet is one of the things a lender will look at when considering a small business for a loan, and if lease obligations and leased assets are on the balance sheet, they’re going to want to talk about them. They’ll also possibly look at asset turnover – trying to understand exactly how much in assets it takes for the business to make “x” amount of money. Banks and other lenders like to know they’re loaning money to a business that is going to pay it back, and in a reasonable amount of time. They will limit their risk potential as much as possible, and they do it by looking through the financials and related information.

Business value is generating sustainable cash flow. If you run a highly efficient business, the more top-line growth you deliver, the more cash flow you enjoy. For capital-intensive businesses (either through the need for capital equipment or working capital), growth can actually lower your cash flow and diminish your business value. To understand which side of the equation your business resides, accounting professionals will often look at the return on total assets calculated over time, dividing the operating income for each period from the P&L by the appropriate period values of total assets from the balance sheet. The resulting metric describes how efficiently assets are applied to creating earnings.

https://coopermann.com/2013/01/22/why-is-asset-management-important-to-a-business/

This can be a difficult conversation with the banker for new businesses, as they have little to go on in terms of historic data to show the bank. The P&L (profit & loss, or Income Statement) only reflects current business performance, not what it can do in a few months or years. By putting leases on the balance sheet, businesses are now reflecting a more realistic view of things, but are also introducing additional items for scrutiny and question by the lender; things which are often described more in terms of business strategy than in proveable numbers. That makes getting the loan just that much tougher.

Previous rules relating to business leases didn’t necessarily require that the business recognize operating leases (leased items and lease obligations) as assets and liabilities on the balance sheet. This is among the reasons why businesses lease equipment – they are able to obtain the item without having to record a single large capital expenditure.

The FASB changes demand that accounting for leases should be standardized, forcing the lesees to report all leases on the balance sheet, reflecting both the benefit (asset) and the cost (liability) associated with the lease. Stated in a press release on the subject: “The new guidance responds to requests from investors and other financial statement users for a more faithful representation of an organization’s leasing activities,” stated FASB Chair Russell G. Golden. “It ends what the U.S. Securities and Exchange Commission and other stakeholders have identified as one of the largest forms of off-balance sheet accounting, while requiring more disclosures related to leasing transactions.”

“a capital lease creates a tangible right where you own the equipment; the liability in a capital lease is true debt…”

http://www3.cfo.com/article/2013/9/gaap-ifrs_lease-accounting-elfa-fasb-iasb-global-convergence

By understanding how these changes in accounting for leases impact businesses, cloud solutions providers now have an additional lever to use with prospective customers: leasing equipment isn’t necessarily the way to keep capex off the balance sheet any longer.

One of the big value propositions offered by many cloud solution providers is that their service is paid for as a monthly business expense rather than a large up-front capital expenditure and investment. Businesses are able to use the solution and benefit from it without actually “buying” anything, it’s just subscribed instead. All of this is really a fancy way of saying “renting but not owning”, but the result to financial reporting is the same: it’s not on the balance sheet, it’s on the P&L in chewy chunks. This used to be a preferred treatment for leases, too, allowing businesses to reflect the usage and payment in little parts rather than a big one. It was “gentler” on the balance sheet. But leasing equipment and software for on-premises use won’t be competing with the cloud and subscription service any longer, closing off the “impact to the balance sheet” conversation entirely and making cloud IT just that much more important to small businesses who need cash to fuel business growth.