Get SaaSy: What Does Software as a Service Mean for You?

Practice Management Cloud computing service. Cupped hands holding cloud symbol.

At every turn these days, you hear the buzzwords, the “cloud,” “SaaS” and “hosted.” If you are like most accounting professionals, you are likely a bit confused on what each means and how they apply to the value to your firm.

The fact is that each type of solution – whether it’s described as in the cloud, SaaS or hosted – offers true value to today’s busy firm. You simply have to know which is the right choice for your practice. But, before you can do that, you must be clear on what each means. Let’s examine these terms and work to make sense of it all.

  • SaaS/the cloud – These terms, in my mind, are truly interchangeable. SaaS (Software as a Service), or cloud-based applications, are written to run natively over the Internet (or in the Cloud). Some classic examples of SaaS/cloud-based applications are Intuit Tax Online, QuickBooks Online, Bill.com, SmartVault and Salesforce.com. These solutions are not offered in desktop versions; they are only offered via the Internet and accessed with a unique URL (e.g., SmartVault.com).
  • Hosted solutions – These solutions are typically written to run as a desktop version, but due to the value of anytime-anywhere access, they’re moved to a data center where they can be accessed online. Hosted solutions mimic SaaS applications, allowing users to operate desktop software via the Web and enjoy some of the same benefits as a SaaS solution (convenient online access, anytime-anywhere capabilities and other benefits).

Which Solution Do I Use?

Both categories of solutions offer value to accountants, primarily in the form of elevated client service. Both SaaS/cloud-based and hosted solutions enable firms to create a collaborative environment where information can easily be exchanged and accessed between staff and clients. Real efficiency is only realized when both the accountant and client have access to information when and where needed. Compare this to working on desktop applications, where real-time communication and data sharing with clients is not possible. The value of these solutions is overtly clear.

If we agree that collaborating is valuable, the real question is: “Is SaaS/cloud or hosted the better solution?” Many thought leaders in the profession feel that “hosted” is a transitional technology. Essentially, this means that the technology helps us get from where we are today to where we should be tomorrow. Today, there are many great desktop applications that have served our firms and our clients very well, such as various QuickBooks® Desktop apps, but where the market is leading us is to the cloud, where real-time, immediate collaboration is supported.

Moving to hosted solutions is ideal for firms that aren’t comfortable with making the bigger leap to SaaS/cloud. It’s an easy transition because it’s far less disruptive to simply move from a desktop application to a hosting center. The look and feel of the software is preserved – and that provides comfort to users. In these types of cases, firms may want to choose hosted apps first, and then work their way up to SaaS.

SaaS solutions, such as Intuit Tax Online, QuickBooks Online, Salesforce, SmartVault and Bill.com, elevate collaboration and ease of use to a whole new level. These apps are written as native Web applications, so it’s as easy as typing in a web address and getting to work! And, because there is no “sync time” required, you are assured that you and your clients are always looking at current documents and data.

The benefits of SaaS applications go far beyond collaboration. SaaS solutions don’t have versions, so version control is never an issue. Users don’t have to worry about major software updates or clients accessing outdated solution versions. Updates to SaaS apps occur automatically online, completely insulating users from IT issues and maintenance. In addition, because apps live on the Web, enhancements happen much faster than with traditional desktop/hosted software.

At the end of the day, SaaS/cloud applications win in the area of value over hosted solutions. However, based on where a firm is on building internal systems, it’s best to choose the solution that feels right. If you are transitioning from desktop software, hosted solutions are less disruptive. If you are well past desktop and want to experience the immediate benefits of online apps, SaaS/cloud is the way to go. Either way, the goal is to get to real-time collaboration!