The Pros and Cons of Moving to the Cloud
By Andrew Lassoes
There has been much talk in recent years about migrating your accounting firm to the cloud. With the recent outbreak of COVID-19, it has become even more appealing as the work-from-home movement is in full force.
While it is a hot buzzword, many do not understand what it means to move to the cloud. Essentially, moving to the cloud means that you do not need to physically be in an office in order to access centralized data. This can be your client’s tax returns, documents, spreadsheets, and anything else that in the past you needed to login at your desk in the office to access.
Change is never easy, but during these unprecedented times it may be a good idea for you to migrate your firm to the cloud. Some organizations are opting to dip their toes in the water and do a hybrid solution, where the main server is cloud-based, but the other machines are still physical.
While there are a huge number of advantages to moving to the cloud, there are some cons that are associated with it as well.
To help you decide which is best for your firm, weigh the following pros and cons.
Pros: Access anywhere with internet
The huge advantage of cloud versus on-premise (on-prem) is that you have full access to your firm from any device connected to the internet. This means that you can be in quarantine in your living room and have the exact same setup and security that you have in your actual office.
Pros: No hardware required
The second huge advantage to migrating to the cloud is that physical hardware is not required. Full servers can cost thousands of dollars and require electricity, cooling, and upkeep. Then, without warning, one piece of hardware can fail and stop your whole firm from operating.
Since cloud technology does not require moving parts, it is impossible for something to break due to normal wear and tear.
Pros: Easy to upgrade
With on-prem servers, you will be “stuck” with technology that is becoming more and more obsolete as each day passes. At a trade show in the 1980s, Bill Gates allegedly said that 640K of RAM would be more memory than anyone will ever need on a computer. Today, you can’t buy a cheap Walmart laptop with less than 4GB of RAM (that’s 6,250 times more powerful than his prediction).
As software becomes more and more complex, computing power needs to constantly be upgraded. Being on the cloud changes upgrading performance from needing a technician to come in, purchase correct parts and a hefty on-site visit fee, to simply clicking a button on a drop-down menu and voila — faster machines!
Pros: Disaster recovery
Having a cloud-based firm makes disaster recovery a breeze. With traditional on-premise servers, if there is a problem with the server, a restore can take anywhere from a few hours to a few weeks depending on the size of the amount of data lost and the action that caused the issue to occur.
With a cloud-based solution, it is very easy to simply click “undo” and restore your company back to the state it was in a few hours ago, suffering very little down time as the result of a catastrophic incident.
Pros: OPEX versus CAPEX
As servers and computers can be very expensive upfront costs, they are usually categorized as capital expenditures and depreciated. With a cloud-based organization, you only pay for what you use, and can scale up and down very easily. This makes your computer system an operating expense, just like any other SaaS product or utility that your business usually pays for on a monthly basis.
It is also important to note the scalability where if you have spikes in usage, like tax season, you can dedicate more resources, and in the off-season, you can turn off machines to save money.
Cons: Requires high speed and stable internet connection
Even though we are in the Information Age, there are some areas of the country and the world that are not able to have the high-speed internet that is required for a cloud-based operation to run smoothly. If you are currently using satellite or a hot spot for internet access, then cloud is most likely not for you.
Test your current internet speed at www.fast.com. If you currently are below 50 MBPS, then cloud may be out of the question. If you must pay per GB of data from a hotspot, this will be unreasonably expensive to maintain.
Cons: Complicated setup
While there have been major improvements over the past few years in migrating existing on-premise organizations to the cloud, it is still a complicated process that isn’t a simple drag and drop. Risking your entire database hoping that you can figure it out or trusting your nephew who is a “computer whiz” who has never done a cloud migration is not a viable solution.
Cons: You may still need tech support
A common misconception is that since there are no moving parts, the machines never break. The operating system is the cause of most computer issues, and that is the same software, cloud or physical. So if you have issues opening a PDF file with a physical computer, that exact same problem will still exist in the cloud. You cut out physical hardware failure, not software or user error.
Source: Accounting Today, July 22, 2020 (https://www.accountingtoday.com/opinion/how-to-structure-multiple-businesses)