What happens in Vegas stays in Vegas, but sorry, not in this case.   We have just come back from presenting at the Sleeters Conference in Las Vegas and the battle between desktop versus the cloud is being waged.  According to David Leary, Senior Developer Evangelist (exactly as it states on his card) of intuit who are now betting everything on QB online, he opens our one on one discussion with, “anyone who is not in the SAAS (cloud) environment is going to disappear”, “they predicted that in 2008 but they have yet to touch the surface” says Brian Sweat of Alterity Inc.   On the one hand just about every new presented technology at the conference is cloud based software services being launched with their booths being managed by young upcomings who for some reason all seem to have lost their razors and manage to somehow maintain this perfect two day shadow and yet there is still a strong representation of what is known as Desktop software that are continuing to grow.  In fact “we continue to see a noticeable increase in traffic and lead generation into Advancepro” says Darryl Reid, Vice-President of Advancepro Technologies.   Companies like Sales Pad another .net desktop software continue to invest in their technology continuing to code and adding features.  They along with Advancepro Technologies and others have introduced cloud features that connect to the desktop mainframe.    I think at the end of the day listening to what the attendees have to say is the most important since these CPA’s, Bookkeepers, and Management consultants are those who make their recommendations to the business owners looking for solutions.   After talking to many of these individuals what stands out is that their real concern is providing the best solution to their clients and recommending the best technology for their purposes, and from what I hear desktop is far from on its last breath.  “Business owners are concerned about connectivity”; “The cloud systems offer limited functionality – as soon as we make the call to QB online they refer us to the desktop enterprise version”; “I do not like how I am being pushed into something that I do not think is mass market ready, everyone preaches – you have to get on the cloud, but I am not going to do it just for the sake of doing it”; “Sure the cloud seems to be the direction its all moving in and that is true for certain basic functions but I am not convinced for core business GL functions especially for companies heavily involved in manufacturing and inventory management”(are there).

So if the Cloud is “it” what’s all the fuss?  Why is everything not operating on the cloud?  What does the future look like and when and who does it affect and how?  What does it all really mean anyway?

When I look up at the clouds I see an endless expanse of the unknown leading into a universe and when I look down I see the hard surface of the earth that supports my footing, and I think that is a fairly good intro into trying to get a handle on this debate.  The reality check on all this right now can be anyone’s educated guess and will all depend on who you are and the space you operate in.  I am a great believer in progress and cloud technology already has a firm place in our lives – it’s convenient, available, and the future.  Once however you get beyond simple service models the cloud has much to answer for when dealing with more complex, secure, time sensitive operations.  Yes, we already participate in many complex transactional cloud environments but these are still tied ultimately into a single server environment that is based on a single data base hosted system i.e. banking.   The true cloud is multi tenanted with limited if any off line redundancies.

Let’s take a quick step back for those of you who are confused enough with the fast pace of how our information technology is in a constant evolution, which by the way is nothing new.  Most of you have grown up with some of the most accelerated changes in software, devices, and communications.  The important thing to keep in mind as with anything else is that just because it’s there doesn’t mean you have to jump into it.  Everything has its right time and whatever your business is its important to try and take advantage of progress when it makes sense.  Too soon can have dire consequences and too late can leave you in the dust of your competitors.

On the one side we have what is commonly referred to as Desktop technology which is software that is locally installed on a server and then on each client machine or in single none networked environs, could be on a single machine.  This software can be referred to as single tenanted as opposed to multi tenanted which is the basis of what the cloud is all about and for this author the other side of this discussion.  A true cloud is what is commonly known today as an APP that is single data base engine hosted in one environment for everyone.  Multi tenanted is the term which refers to how the environment operates where every user is in the same database.  An illustration of this can be that your traditional desktop would represent a single home dwelling and a cloud app is more like an apartment building where everyone lives at the same address and whatever happens to the structure of the building affects everyone just the same no matter how large their apartment is, as opposed to a sub division of single family dwellings where what affects one home has no affect on the others.   This is actually an important illustration and the use of the word apartment in this instance is intentional.  Rather than using the word condominium which as in a single dwelling home would imply opportunity for ownership, in a cloud application you never own your software, like an apartment you can only rent it.   This is why the entire cloud space has become known as the SAAS model; Software as a service.  There are some important distinctions that we have covered here thus far.  Desktop software is usually owned by buying a license and is hosted in a single tenant environment where only your information is stored in a single data base whereas you will never own your cloud driven software – you are renting it and as long as you pay that monthly bill you have access to it.  (I do not see any price regulatory agreements in the Terms and Conditions, in other words you may see price increase to your services without notice).   You data is stored in a collected data base (multi-tenant) and you are completely dependent on the gatekeepers of your data to protect and secure you, not too mention to survive financially (If a cloud company stops paying its server bills, they get shut down and so do you).    For these distinctions alone most governmental national agencies, DOD, and many large essential services companies are not allowed to maintain their operations on cloud models.    Yes, David brought up salesforce.com as an example of one of the most widely used cloud technologies by the same organizations I refer to – and that is true but this is a CRM function only – non essential to running the day to day.  If sales force goes down it’s a big issue but you aren’t at risk of not being able to operate.

There are other distinctions that separate these two chasms.  Cloud services are totally device independent and are available to its users 24/7 from anywhere that there is an internet connection available.  This is hugely convenient especially for mobile and virtual workforces.  The key point here is connectivity and if you lose internet connection you are down whereas in a desktop environment you are still in business.  Most transactional services today are all cloud dependent.  Banking, social media, e commerce are almost all exclusively cloud today but when you have a production or distribution company it makes for an awfully vicarious situation if your entire operation can be taken down because you cannot connect to the internet.  Watching 50 employees with their hands in their pockets is bound to give any business owner heart burn.   Connectivity infrastructure has been a major focus for all developed societies with a focus on securing connectivity and availability.   The dependency and use of cloud services for business and personal use has put tremendous pressure on bandwidth for the utility services but this too can be augmented by private alternatives and redundancies including RF, wireless and satellite.  All coming at a cost.

Another important distinction is migration between services.   SAAS models are designed in user friendly competitive environment usually with no contracts.  If you are not satisfied with one service provider you can with ease transition to another.   Migration for desktop software is a different story.   Competitive desktop software do not often operate in the exact same fashion and will usually distinguish themselves with unique front end user interface and functionality.  There is also upfront license fees and investment in technology hardware that is capitalized over years.  Changing desktop software can often be expensive and tricky for management and operations.  So the process of choosing a desktop software is usually more intense and more permanent than your choice for cloud.

For companies dealing outside of services such as manufacturing, kitting, distribution, and POS that require functionality  particularly for inventory and material management there is little in the true cloud today that can answer to these needs entirely.  There are still questions involving connectivity, security, dependability that need to be answered.  That being said desktop software companies like Advancepro have proactively recognized the advantages of the cloud and have opted instead to develop hybrid solutions that provide cloud advantages while maintain desktop fundamentals.  I will tell people in conversation that we recognize the benefits of mobile accessibility but understand for our customers that the desktop technology is more than just about technology but also about relationships.   If you go cloud you can expect a noticeable decrease in the kind of traditional customer service you may consider important when working with an application you come to depend on.  The SAAS model is all about customer disconnection.  Think about it.   You can be online with a SAAS company in very little time.  It’s a monthly relationship and for the most part you are on your own.   It has to be that way because the SAAS company cannot afford to invest in the customer interaction.   Personally, as a business leader I have issue with that.  OKay, for watching my bank account, booking my airline tickets, making hotel reservations I can do these one off transactions easily online – in fact I prefer it.  But when it comes to a software technology that is the core to my operations, an ERP business intelligence tool like Advancepro, I want to be able to pick up the phone and talk to someone, call me old fashioned, but I want a relationship.   For the thousands of businesses we have set up I have come to know many other business leaders to know that no one business the same and having someone to reach out to is a significant difference.  SAAS companies cannot afford anything more than off shore “make you feel better” customer service.  At Advancepro we have built the company based on our direct and often long term relationships with our clients.   As the CEO I am very accessible to our customer base and am often on site doing discoveries under our CEO outreach and white glove service offerings.  “we have become strong in our professional services because customers are demanding that relationship ingredient to our product offering” says Darryl.  Most desk top solutions offer a ready to go product at an affordable investment level and in almost every business case there is some level of customization to meet that business unique differentiators – you cannot get that in a cloud product.  In the cloud, the product comes as is for everyone.  You will find that with the cloud you will be working to make your processes work with the software, for Advancepro our attitude is to make the software solution work for you and not the other way around.   Cloud solutions tend to fall into the commoditization trap far sooner than desktop solutions.

As I mentioned earlier desktop software companies, recognizing the advantages of the cloud have adopted middle ground Hybrid solutions;  I can only speak for Advancepro about what we have done to bridge the gap.  We offer customers a complete cloud hosted solution by hosting the APT application and Quickbooks in a web environment with a 100% up time guaranteed.   This immediately gives our users the option of using the software on the go, anywhere 24/7/365 all in real time and from any device so effectively they are benefiting from cloud style accessibility but are not giving up single tenancy environment.  We have also done some other advanced features that tie nicely into a connective technology that dances in both worlds.  Advancepro provides a web mobile application that feeds directly into its desktop software.  Effectively this is true cloud with sync to a single tenancy server.  We also offer a range of web services that we call portals which include B2C consumer shopping carts,  B2B customer shopping carts, Sales rep portal and newly launched 3PA which is our third party approval portal.  Between all our integrated portals, mobile apps, and hosting you have a very powerful total business solution product.

So is the desktop becoming legacy system?  I would argue that desktop technologies will not be gathering dust anytime too soon.   Beyond servicing transactions there is not much out there.  That being said the desktop needs to answer the call to evolve and that is not an easy course to navigate for companies traditionally established in the desktop world or for their customers.  What I see is a transitional transformational period from desktop to cloud offering the choice to the business owner of how they ultimately want their information stored and accessed.  I do not believe the desktop is dead – for many, single tenancy will always be the safest route to go, taking advantage of the peripheral branches to serve efficiencies in operations and customer convenience.

2014-11-10 20.16.20

Israel Ellis is the CEO of Advancepro Technologies

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