Head in the Clouds

Can Web-based applications aka “cloud services” really be the wave of the future, or do the people who believe that have their heads in the clouds?   Online or software-as-a-service (SaaS) applications have been around for years, but businesses—and especially accountants---fought the idea of putting their financials on the Internet. The biggest reason was fear around security.   That’s finally starting to change as people get used to online bill paying and plugging their credit card numbers into their computers.   As a result, more vendors are emerging to offer all kinds of online capabilities—things like document management, invoicing and dashboards--to see which clients owe a firm money.   Intacct, whose core SaaS offering is accounting, realizes it can’t create all these other apps itself, so it’s partnering with dozens of companies, letting Intacct customers visit a shopping mall in the sky, where they can buy what they need for their specific businesses. Oh yeah, and those third-party add-ons already are integrated with the core product.   One of those add-ons comes from sales and use tax vendor Avalara, which announced its partnership at Intacct’s conference this week in San Jose, Calif.   Interestingly, Intacct has its own tax engine, but executives on the technology side of the company acknowledged that only experts knew how to use it, so they needed to go to Avalara to do the behind-the-scenes calculations in hopes that more customers will actually use it.   The best part for Avalara is that it didn’t need to sell the SaaS story to Intacct customers, because they’ve already bought into it. Most attendees said they use three to five SaaS applications in addition to Intacct. But a few years ago, Avalara had to provide prospects with four-hour demos, three of which were spent proving the Internet was safe to conduct these types of transactions on.   When it comes to the channel, customers are starting to ask resellers of on-premise accounting products like those offered by Microsoft and Sage what’s available online, which drove about 100 of them to add Intacct to their toolkits.   Those on-premise guys don’t want to be left in the dust, either, so they’re starting to embark on their own SaaS strategies, for example Microsoft Dynamics CRM and Intuit’s QuickBooks online, and are pitching the cloud applications to their resellers. But they still have a long way to go.   And Intacct likes that.   “The channel is getting a message things are changing,” Intacct CEO Mike Braun said. “[Microsoft CEO] Steve Ballmer says it’s time to get on the bandwagon, but they don’t have an ERP SaaS solution , so we’re happy he’s delivering that message.”   Intuit cut 7 percent of its workforce in June in a move to realign the company toward what it calls “Connected Services.” The company outlined what that means at last week’s QuickBooks Enterprise Solutions Conference in Dallas: Intuit is opening its platform to allow third parties to offer SaaS products that connect to QuickBooks—similar to what Intacct is doing except that the core offering itself is not SaaS.   Executives stressed the fact that Intuit is not abandoning its desktop applications but that the Web needs to be an area of intense concentration in order to attract more customers and appeal to mobile workers.   Braun’s answer to that is that Intuit isn’t fully committed to SaaS. And if a customer wants all these other SaaS applications, wouldn’t they want the whole kit and caboodle?   The problem is, Intacct, which prides itself on being a replacement for QuickBooks, hardly ever runs up against QBES, likely because many QuickBooks customers looking to upgrade don’t know about companies like Intacct, or its competitor, NetSuite, for that matter.   Could there ever be a day when even Microsoft Word will become obsolete, servers will cease to exist and everything will run from a wireless router, as one attendee suggested?   That may be a bit of a stretch, but the clouds no longer seem out of reach.   Alexandra DeFelice can be reached at alexandra.defelice@sourcemedia.com.