Sending Applications to the Cloud

Kimberlee Augustine and I'm both CPAs.

Kimberlee, a CPA for more than 20 decades, is meticulous, timely and financially astute. I've held my CPA certificate for more than 20 decades too. If it was close enough, it was good enough. You do not need me as your own accountant. Which is the reason I stopped practicing public accounting quite a long time ago and just sell business software.

So Augustine and I are different kinds of CPAs. She is better with numbers, and I am better with applications and business technology.

And our companies are structured differently also. Like so many tiny companies, I've all of our systems and data in-house. I have a couple of servers and workstations. We relate to our servers over our local area network, which is supported by our IT company. We connect remotely using Windows Terminal Services. This is a standard setup for businesses with 10 individuals, such as mine. And Augustine's company too. Except she's not set up this way.

She does not have a server. She does not have a local area network. All of her applications, databases and files are hosted by a company named Rackspace Hosting. Why? "I am not a technology person," she says. "I'm an accounting individual. I'll let someone else worry about the tech."

Rackspace is a part of a growing industry of companies that provide dedicated hosting. The company says it has over 99,000 customers, many such as Augustine. Dedicated hosting companies provide their customers with servers, support and up-to-the-minute technology housed in highly secure facilities. Technology is a headache, these firms say. Why go to throughout the frustrations and expense when you're able to just allow the pros manage this stuff? A decade ago this could have been quite difficult. But in the modern Web-based, broadband world of high-speed relations, it is reality.

Augustine got lucky because her timing was right. She dived to the cloud in 2007. Fast Internet connections were readily available. Cloud computing was becoming simpler. And she was just starting her up company at this time. So she did not have to worry about dismantling her current network and adapting it all to a brand new setup.

How did it work? After signing up for Rackspace, she replicated all of her existing files (there weren't too many) out of her host to theirs. She then installed her software, such as QuickBooks and Microsoft Office, directly on Rackspace servers using the remote desktop links it provided. "It was like doing it onto a host in my own office," Augustine says. "There's not much difference." From there on, her and her workers just connected straight to the Rackspace server.

The same with customers. A vital part of Augustine's bookkeeping services is that she maintains the accounting procedures for their own clients. She needed a centralized place to get this done, where not only could her workers access the data but her customers could see their books and do data entry when necessary.

Keeping this in-house could be costly and time-consuming. For a company like hers, a controlled server installment became the backbone of her business delivery model. "I wanted to focus on bookkeeping, not become a computer specialist," she explained.

Some software companies offer hosting providers for their clientele. By way of example, Augustine might have had Intuit host her clients' Quickbooks systems. However, the difference here is that Rackspace, like most firms like it, hosts most of its clients' systems, not simply a particular program. In summary, they're simply renting out their servers. And their expertise. That way you do not just get access to the box, but it is always updated with the newest patches, backed up and tuned for optimal performance. Daily. Try getting that out of the local IT guy.

Augustine found the performance to be as good as any Web-connected software. "I don't remember the last time we had some network problems." In reality, she believes that her business has minimized the risk of downtime, both internally and for its own clientele. Without hosting, even if her server got into trouble or her Internet service shut down, no one can do work. Today even if her office were to go dark, her employees and customers would still be able to work with their data as long as they found an Internet connection someplace else.

Listening to Augustine's story, I found something else that particularly appealed to me personally. Rackspace gives Augustine the capacity (for an additional charge ) to additionally host"virtual machines" This way she is able to demo third-party applications and other software in a test environment before linking them into her production systems. Being in the software industry, this is a great feature. Setting up virtual machines for testingto run unique applications in house, can be quite a pain the neck and also call for a lot of funds from a host. Bear in mind that I'm not good with details. So testing my work is highly recommended for every one my clients.

What's hosting the thing to do for small companies? For all, like Augustine, it is a great idea and one which will grow even more over the next several years. And you'd think by reading to the point I'd be a convert. But I'm not sold on this type of service for my business. Surprised? Not as surprised as that client of mine in 1986 when he got a huge tax bill because I forgot to include a few deductions he had.

Sure I appreciate the benefits. I love the easy accessibility from anywhere. The greater degree of security. The accessibility of data to both my employees and clients. And not having to worry about internal systems and other IT-related headaches. I get that.

Except that I do not really have these problems. I've got two servers: one of these, as mentioned before, outfitted with Windows Terminal Services along with also a virtual private network. This was setup by my IT man a few years back. We get everything through a browser, just like Augustine, from anywhere we need. My machine has a daily backup. I'm positive we're not running the most recent versions of Windows and could use some cleaning up, but things are working OK.

I am even more confident that my data is far less protected as it would be when I let a company like Rackspace sponsor it. But we're not maintaining highly sensitive stuff such as credit card numbers available, so I'll take my chances that some kid in Malaysia would like to understand the next week's lineup for my team. And also, we're not the kind of business where customers access their information from our systems the manner Augustine's do.

And the price tag is still pretty high. The majority of the hosting companies I know charge a monthly fee per user for using the servers, generally around $100 per month per user. Augustine says that she pays about $1,500 a month for her support, which includes the digital machines and other premium features. I now pay my IT company less than one-third of the every year, and that contains all the Red Bull they drink. Even replacing a host, which will last me a good four to five years, would put me back about $3,000 to $5,000. I'm not very good with numbers. However, these numbers I understand.

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