- Cloud computing gives you access to an environment that you can customize or build out to suit your needs. With SaaS, you're limited to the features and capabilities written into the software, but cloud computing offers the ability to increase server capacity or storage space on demand.
- Cloud computing offers elasticity, meaning your resources and costs can increase or decrease with your demands. SaaS typically involves a set fee per user, per month, so costs and the functionality offered tend to be fixed.
- In short, cloud computing is highly customizable, whereas SaaS offers more of one-size-fits-all approach.
- Amazon Simple Storage Service (Amazon S3) – This service allows you to store and retrieve an unlimited amount of data, at anytime of day, from any computer connected to the Internet.
- Microsoft's Windows Azure – This service provides virtual servers that can be used for application development and delivery.
- Rackspace.com — Similar to Windows Azure, Rackspace.com provides servers for hire, but with a wider array of operating systems to choose from.
A primary benefit to cloud computing is that users outsource the care and maintenance of servers to firms that specialize in that capability. When demand warrants, new servers can be brought online in minutes, rather than the days required when a company maintains its own data center. Any sort of computer-based application can be hosted on cloud-based computers, from a website or shopping cart to custom programs for internal use. Thus, with cloud computing, the user is generally responsible for maintaining the applications on the server, while the hosting companies maintain the underlying physical equipment and operating system.
- Applications, such as QuickBooks Online, allow you to access accounting records from anywhere in the world, instead of from specific computers within your office.
- New features appear in the software automatically, so there's no need to purchase a software upgrade to be physically installed on each of your computers.
- Your data is backed up automatically, so a local hard drive crash won't affect your data.
- Consider the recent situation with megaupload.com, where certain purported illegal actions by a subset of users caused everyone using the service to lose access to data. Think about a toddler having a certain bodily function in a public swimming pool – everyone has to suddenly get out of the water. Similarly, actions by one or more rogue users can cause unexpected and dramatic disruptions for everyone else sharing a cloud-based resource.
- Both cloud computing and SaaS involve trust, in that you're trusting an organization to hold up its end of the bargain. Intuit, maker of QuickBooks, last year experienced a spate of outages that caused business interruptions for users of their myriad online services.
- A service you trust and rely on could suddenly change hands, such as Facebook's recent acquisition of Instagram . You may then be forced to find a new service provider if you have philosophical differences with the new owner of a tool that you've relied on or if customer service levels start to slip to unacceptable levels.
- If you stop paying for the service, access to your data can be immediately terminated. However, many providers offer a grace period. For instance, if you cancel your QuickBooks Online account, your data is maintained for a year, should you decide to resubscribe to the service.
A previous version of this article first appeared on www.accountingweb.com .
David H. Ringstrom, CPA heads up Accounting Advisors, Inc., an Atlanta-based software and database consulting firm providing training and consulting services nationwide. Contact David at firstname.lastname@example.org or follow him on Twitter. David speaks at conferences about Microsoft Excel, and presents webcasts for several CPE providers, including AccountingWEB partner CPE Link