The Cloud Beyond SaaS: What IaaS Means for Accounting Firms

Phrases such as “Cloud Computing” and “Moving to the Cloud” have been a consistent part of the conversation around IT strategy in the accounting profession for a number of years. It means different things to different firms based on several factors, but at the very least the journey to the cloud has resulted in the strong adoption of Software as a Service (SaaS). SaaS applications are hosted and maintained by the software vendor, providing some key benefits of the cloud. While SaaS offerings have greatly reduced, and in some cases eliminated, resources required to run and maintain many applications in the firm’s local environment, the opportunities and advantages of the cloud extend far beyond software applications.

Our profession’s software vendors have accelerated SaaS adoption by reinventing their flagship products as SaaS offerings, including entire solution ecosystems in some cases. Microsoft has also moved the needle on SaaS adoption with Office 365, an ever-growing suite of applications hosted in the Microsoft Cloud. This path has been a “toe in the water” approach to cloud computing, allowing firms to gain confidence with this technology shift and its impact on firm processes, employees and clients.

This approach, however, does not address the opportunities around moving core network infrastructure and services to the cloud. These network components, such as servers or host machines and network storage, often remain in place with the associated software and maintenance contracts to support them. As that infrastructure ages and needs to be replaced, it’s a good time to look at the next iteration of cloud computing: Infrastructure as a Service (IaaS). IaaS gives us a path to lift the firm’s physical network into the cloud and provides virtualized computing resources over the internet. In this model, an IaaS provider hosts some or all network infrastructure components including servers, storage and network hardware, as well as virtualization platforms and tools. IaaS providers can supply a wide range of services on top of infrastructure including identity management services, monitoring, patch management, load balancing, clustering and storage resiliency such as backups, replication and recovery.

Like SaaS, IaaS is offered as a subscription-based model providing the firm a more predictive and cost-effective use of the firm’s technology dollars. IaaS eliminates the need to budget for regular infrastructure hardware replacement. With the capital expense of hardware removed, the firm pays for the infrastructure services on a more regular basis and only pays for the resources it uses during that period. Therefore, it’s worth noting that the granular billing method of IaaS details every resource that is used. This can result in some sticker shock if you’re not careful to consider savings associated with things like maintaining and replacing on-premise hardware. It also requires that you pay careful attention to the resources you have commissioned and decommissioned over time. Unused servers, for instance, will rack up costs in this environment where they did not have an analogous cost previously.

Similarly, firms that experience rapid growth, or those whose needs fluctuate significantly seasonally, can leverage the flexibility IaaS offers to scale up or down based on the firm’s current needs. IaaS provides the nimbleness needed to expand into new markets, whether the expansion strategy includes opening a new office or bringing a newly acquired office into the fold of the existing organization. Procuring and configuring hardware becomes moot, no longer slowing down the onboarding and integration processes. You can easily add additional IaaS resources through the service provider.

Advantages of IaaS extend beyond the financial returns; it offers upskilling opportunities for the IT staff as well. In recent years, we have seen accounting staff looking for more opportunities faster along with more responsibility sooner in their tenure with the firm. Many firms leverage technology to automate repetitive lower-level tasks, that provide little value to the accountant or the client, such as data entry in the tax process. Technology professionals possess the same hunger to elevate their knowledge and contribution to the organization more quickly. IaaS allows IT to automate or eliminate some mundane tasks taking up IT’s time while introducing some technical complexities challenging the team to up their infrastructure game. Additionally, the IaaS model typically introduces additional vendors, putting IT staff in the more strategic position of quarterback.

As with SaaS offerings, there are several ways to approach IaaS. Public cloud vendors, such as Amazon Web Services (AWS) and Microsoft Azure, offer IaaS to host your infrastructure in their data centers. These vendors specialize in IaaS with large suites of add-ons and innovative tools ̶ many of which are available as free trials. There are also smaller niche service providers, some of whom focus on the accounting profession. Working with providers who are familiar with the applications used in our profession can result in an added benefit. They will understand legacy applications and be able to help in optimizing performance.

IaaS does not require an all-or-nothing model. You can also approach it in a hybrid fashion, leaving your network infrastructure in place while leveraging some of the IaaS resources. For instance, some organizations enter the world of IaaS by lifting their data backup processes into the cloud. Utilizing Managed Service Providers (MSPs) to help you transition to IaaS is a fairly popular option. Many MSPs are already leveraging IaaS and are familiar with the AWS and Microsoft Azure offerings. Additionally, MPSs free up your internal IT team by providing help with mundane but critical tasks required to maintain the new network environment such as patch management and network monitoring.

As with any major shift in technology, due diligence is imperative. Be sure to analyze all aspects of your network, storage and the many applications on which your firm relies. During this phase, it’s a good idea to evaluate the skills that exist on your IT team and plan to augment those skills in the process of negotiating for services. Remember, IaaS is an opportunity to build a more flexible and resilient environment for the firm and an opportunity upskill your IT staff. Up front planning increases the success of both.

Firms ready for the next iteration of cloud computing beyond SaaS, are exploring IaaS as part of their IT roadmap. However, each firm’s cloud strategy is extremely unique based on their size, resources, and current environment. Similarly, innovation that supports your firm’s vision and strategic objectives is very particular to firm culture and processes. These strategies cannot be outsourced to anyone. Additionally, the process of protecting your client and employee data ultimately remains the firm’s responsibility. While providers in both the IaaS and SaaS spaces can provide tools to assist with security and innovation, they will not be able to effectively or solely own these areas. No matter how your path to the cloud unfolds, it is important to remember that security and innovation must always be driven from within.

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Amanda Wilkie is a Consultant with Boomer Consulting, Inc., and Kate Krupey, MSCE, PMP, is Chief Information Officer for KatzAbosch, a Maryland accounting and business consultancy.

[Image from www.quotecolo.com, a provider of IaaS services.]