The much-hyped market for cloud services has been building exponentially since "cloud computing" became a buzzword. According to research firm Forrester, investment in the cloud topped $18.6 billion last year, and Bank of America Merrill Lynch estimates that corporate spending on cloud services will reach $117 billion per year over the next three-to-five years.

The explosive growth of cloud computing is generally seen as a welcome extension to existing accounting processes.

"We've been building solutions in the cloud for the last decade," said CCH North America president and chief executive Mike Sabbatis. "and they're working well for CPA firms supporting mobility, streamlined work processes, and a paperless, work-anywhere environment. It's a critical intersection of professional productivity, data security, and accessibility for the accounting industry."

For Jim Bourke, partner in the New Jersey CPA firm of WithumSmith+Brown, the value of cloud computing is reinforced by the natural and man-made disasters of the past year. "We've seen the effects of tornadoes and fires on companies and their CPA partners," he said. "When Hurricane Irene struck in the summer of 2011, our 15 offices and 500 professionals were literally able to weather the storm due to our investments in cloud computing. It is a technology that secures data, and ensures that your company data is there when you need it. We are a big advocate of the technology for ourselves and our clients."

And yet, many are either not convinced or have no clear understanding as to what cloud computing is, its benefits, or how to maximize those benefits.

A survey of 30 multinational firms in December found that a fourth currently have no cloud computing plans, and that half of the companies plan to invest in their own internal data centers along with or rather than relying on the cloud. Most cited concerns over data control and security, among other things.

THE CLOUD'S SILVER LININGS

Cloud computing is sometimes referred to as Lego for grown-ups - a system that allows you to create virtually anything you can imagine from a standard set of building blocks. While this may be true in theoretical terms, the benefits for accounting firms often differ from those of their clients, and of businesses in general.

The five general benefits are:

Reduced IT costs. Cloud computing can reduce the costs of hardware, software, networking management and overall IT investment. With cloud computing, you pay for what you use.

Scalability. In real terms, the IT resources can be expanded or reduced according to the needs of the company. This is particularly true of storage space and computing power.

Automatic updates. Software and hardware are updated by the cloud vendor. While these costs may be reflected in monthly or annual fees, they are implemented automatically - reducing implementation costs for the user.

Accessibility. Accountants and their clients can access and update information wherever they are, and meet where they need to meet, with full access to applications and data. This is also true of client employees, who can self-manage their data within the system for payroll and other applications.

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