Cloud Potential in 2012

Transcription

1 Cloud Potential in 2012 Kevin Martin, CPA.CITP, MSCE, MCP+I Martin & Assoc., Cincinnati Ohio OSCPA Hot Topics for Corporate Controllers, April 18 th, 2012 Sharonville Convention Center Accelerate Business Innovation Facilitate delivery of more personalized, contest-aware services Improve employee productivity Optimize the total cost of technology The Promises Heard around Cloud Solutions There will no longer be any need to purchase and maintain servers, applications and all the other expensive hardware/software businesses needs In 1983 PC s Potential Were Accelerate Business Innovation Facilitate delivery of more personalized, contest-aware services Improve employee productivity Optimize the total cost of technology The same purpose, hope and reasons for using technology exists today, as it did when I graduated from college. In Reality Cloud computing is more likely to bring more work (yet productive work) to CFOs, CIOs and CMOs together for several reasons All parties are needed to penetrate the hype to accomplish results Business Processes are still needed to be implemented - The cloud simply describes a system for accessing computing compatibilities at a distance via the internet. Cloud systems have to talk with Legacy systems, data and/or people. Implementing a Cloud Solution is never automatic Reference Point by Decades 1970 s Service Bureaus and Mainframes 1980 s PC introduced Spreadsheets 1990 s PC based ERP and Tax Prep Software 2000 s More 90 s and Early Business Internet 2010 s Cloud Computing and Mobile copyright 1

2 Agenda Facts and Interesting Reference Points Definitions and Terms and Sample Costs Legal Implications and Risks Show Intacct and Adaptive Planning Questions and Answers Facts/Interesting Points (2) SaaS revenue gets more marketing hype in the press. It is growing, but don t count out the importance of On-Premises software SaaS revenue grew 100% over 3 years. $9B revenue in $19B in Overall, approx. $10B growth On-Premises grew approx. 35% (it grew $71B, to $271B (On-Premises grew $61B more then SaaS in revenue) Future SaaSgrowth will come as cannibalization of traditional On-PremAND new software that was never On-Prem. Facts/Interesting Points (3) Saugatuck Technology reports that through 2014, SaaS applications will dominate IT spending (includes Social and Mobility solutions which are new spends relatively speaking when comparing to existing spends in ERP and Tax) During 2011, tablets approached 50 million units (from 15 million in 2010). 80 options include ipad2, Xoom, Galaxy and more. Apple sold 37MM iphones in Q Hot Topics For Facts and Interesting Points Software as a Service (SaaS) is the oldest and most mature of all cloud computing options C-Level are hearing more about promised cost savings, ease of implementation, and matching capacity with Cloud solutions (all versions of?aas) Web traffic is growing. 75% of corporate network traffic in 2011 was from text, graphics, audio and video from the web (up from 50% in 2010). Definitions and Terms copyright 2

3 Cloud Computing Taxonomy You manage On Premise IaaS PaaS You manage You manage Managed by vendor Managed by vendor SaaS Managed by vendor Cloud Defining Attributes Measured Services (applications chosen, features) On-demand self-service (client portals, banking services, etc) Resource Pooling (hardware, software and people costs used for other solutions) Rapid Elasticity (able to add new users, or additional/change storage space) Broad Network Access (includes the speed from your office to the cloud, plus having access everywhere) 3 Key Types of?aas(cloud Flavors) IaaS Infrastructure as a Service Provides data center for infrastructure, hardware and software resources Amazon s Elastic Compute Cloud (EC2), IBM VMWare PaaS Platform as a Service Provides software platforms for ISV to build on without having to buy servers Force.com, Google s app Engine, Microsoft Azure SaaS Software as a Service Vendors make software available over the internet NetSuite, Salesforce.com, Google Gmail, SPC Commerce (EDI) Today s SOC, Yesterday SAS 70 You Will Want Your Cloud Provider or data center to have a SOC2 or SOC3 report. Statement on Auditing Standards (SAS) 70 has changed (2011) and is now covered under Service Organization Control reports 2 and 3 (SOC 2 and SOC 3) All SOC reporting are covered in SSAE 16 (Statements on Standards for Attestation Engagements) Definitions Cloud Computingis the location-independent delivery of IT Management Services that provides significant resources. Cloud Sourcing is the process of sourcing infrastructure and applications from the cloud Private Cloud Infrastructure provided virtually via the Internet. Owned by a vendor, or the company. Protection of data is enhanced. Public Cloud third party owns hardware and software On-Prem On Premises Solutions CapEx vs OpEx CapEx The Capital Expense makes its way to the income statement by depreciation. OpEx Operating Expense hits the income statement as it is expended. Stop and do the math to see what the total spend is over the solution/software/hardware s life. Both of the above require cash both will run their course over time as an expense. Nothing is automatic in either choice. copyright 3

4 and Sample Costs ERP ERP Costs 3 years 10 users Item 10 user, Inventory, Sandbox ServerCosts (hardware and maintenance) Cloud SaaS - Intacct On-Premises $9,000 ($6K and $3K to buy/keep current) Office CRM Software Software Costs (Purchase and Maintain) $34,000 ($19K + $15K) User Fees for 3 Years (per user, per month costs) Base Software Fees 3 years $43,200 $12,960 Access Information Total 3 years costs $56,160 $43,000 Focus on The Following ERP Enterprise Resource Planning (accounting, distribution, project, mfg, service) systems Portals for CPA firms and others CRM (customer relationship management) solutions Office and Business spreadsheets and word files Budgeting and Forecasting Portal Software Well suited for the Cloud. Goal is to move files securely between you and customers Various solutions exists, and are horizontal across industries. All will allow you to brand your company and firms messages into splash screens My dollar costs examples later in my presentation are a point of reference you need to always confirm and negotiate pricing. The key point is you doing the analysis of a 3 year costs (and longer) ERP NetSuite( SAP Business By Design ( Carillon ERP ( Sage ( MAS 90, Peachtree, others) Microsoft Dynamics ( Intacct( Acumatica( (hosted or on premise) Intuit (all flavors)( Freshbooks( Plex( solution) xtuple( Portal Software Links XCM Solutions. Endorsed and sold by CPA2BIZ (AICPA) CCH Incorporated ShareFile SmartVault Corporation Thomson Reuters Microsoft copyright 4

5 Portal Software Costs Solution Parameter Parameter 3 Year Costs XCM $150 per month You manage access and versions CCH ShareFile $1,250/year + adds 500 portals, 10GB in total $15per user, per month You need to control access SmartVault $30per month You need to control access Thomson Reuters $2,100/year 1000 portals, 500MB each $5,400 $3,750 $1,500 $1,500 $6,300 Office and Business Apps Microsoft Office 365 Exchange Online (Business Productivity Online Suite), Sharepoint, Lync, Office Approx. $10 per user/per month for full features $7,200 for 3 years, 20 people Google Docs - missing Sharepoint features. Price is about 60% of Office 365 CRM SalesForce Microsoft Dynamics CRM Online - Microsoft Dynamics CRM - Sage CRM SugarCRM CPA2Biz Core Solutions GruntWorx Paperless Tax Workflow Solution for documents Confirmation.com secure online confirmations Intacct financial accounting and client write up XCM Firm-Wide Workflow Automation Apptix Solutions business-class platform **** not owned by CPA2Biz but endorsed **** CRM Costs 3 Years 20 users Software Parameters Parameter 3Year Costs SalesForce $125 per user/mo Premier user $90,000 MS CRM Online $44/month ***** $32,000 MS CRM Sage CRM $30K software and maint. $33K- Software and Maint $17 hardware and maint. $17 hardware and maint. $57,000 $50,000 Sugar CRM $100/month Ultimate version $72,000 icloud Announced in June, The typical Apple phenomenon occurred many users though it was new and first. icloudstores your content and wirelessly pushes it to all your devices. And because it seamlessly integrates with your apps, everything happens automatically. icloud is about storage and syncing, versus streaming, real-time. (like Google Chrome will be) The business revenue to Apple will remain with the Apps. The Apps store is where Apple makes it revenue 1 st 5GB is free. $20/year for 10GB, $40/year for 20GB copyright 5

6 Legal Implications and Risks 5 Basic Legal Questions on SaaS How is the SaaS deal/contract different than a traditional software license? PaaS or IaaS? Who owns the data? Who is responsible if the data is lost, damaged or compromised? How should you handle privacy issues? What are the Service Level Agreements (SLAs)? Showing 3 Solutions Before Questions and Answers, let s see Intacct(accounting) Adaptive Planning (budgeting and forecasting) Office 365 New Risks Around The Cloud Ownership both how to get it back, and who is the steward Performance SLAs and guarantees Security hackers and physical Multi-tenant and governance AICPA SSAE 16 (SOC 2 and SOC 3 reports) Availability of Vendor (can you reach a voice) Thank You Kevin Martin Martin & Assoc. Kevin.Martin@martinandassoc.com Question Answer copyright 6