Is a Hybrid Cloud a Reality for CPA Firms?

By Roy Keely, VP of Market Strategy, Xcentric, LLC
 
In short, no. 
 
It may be a matter of nuance of terms but, nonetheless, an important aspect to hone in on so we can get a truer picture of things. 
 
Many firms have been moving to a "hybrid Cloud" model  rather, what they think is a hybrid Cloud model. This is where a firm chooses to slice an aspect of its own private network off to a Cloud somewhere, thus creating a hybrid model having both a private, on-premise Cloud and a third-party Cloud (or Clouds) offsite. This is what many think is a hybrid Cloud, but it's not  it's a "Franken Cloud." 
 
A hybrid Cloud is truly a hybrid Cloud when the following are in place:
  • Single sign on (SSO). A user can use both Clouds with one set of credentials.
  • Application Programming Interface (API). The Clouds communicate with one another through the use of APIs.
  • Seamless provisioning/migration. A server and/or storage can be moved seamlessly across Clouds through an interface versus actually having to move/shut down/build/etc., the storage/server on the other end/Cloud.
The Franken Cloud
So what many firms have done is create a Franken Cloud where they've strung together non-connected parts to tell a bigger IT narrative. This, like in the book Frankenstein (a really weird novel, mind you, and also not the actual name of the monster, but of the doctor), doesn't work out too well for the creator of such a creature. Stringing together solutions that cure particular problems in theory is a good thing, unless of course, the solutions don't work in concert and/or dismiss the presupposition that they should indeed work in concert. 
 
A simple way you know you have a Franken Cloud is when you have to go to multiple places, multiple times, and use your multiple passwords to get through your average day. Graphically, the below explains the moving parts involved in both a hybrid Cloud and a Franken Cloud. As you can see in the Franken Cloud, you're relying on a few vendors to deliver a variety of resources. 
 
True Hybrid Cloud:
 

 
Franken Cloud:
 
 
In the end, philosophically I think a hybrid model could be a valuable asset for the enterprise, but that's not a reality right now. (Actually, it's not even close to be being a reality for a CPA firm.) I'm not at all in favor of the Franken Cloud model that has crept into our space. The Franken Cloud model breaks down for the following reasons:
  • Inefficient. Users have to go multiple places during their day, which means wasted time and a certain level of inefficiency built into every process. These mental fidgets are death by paper cuts in a billable business. 
  • Not connected. The Clouds aren't connected. To get a document from one Cloud to another, you have to e-mail it to yourself or download it, then upload it into another Cloud. That's just one example  yuck! 
  • More overhead. You have costs to support your internal network of people, cap-x, and recurring expenses. Your third-party vendors have those same cost centers (perhaps at more scale, but they still have them), plus the need to make a profit. It's simple math at this point  you're spending more in smaller chunks. 
  • More management. More Clouds mean more vendors, more bills, more contracts to negotiate  the whole nine. 
  • Who's on first? When something isn't working just right, who do you call? Which vendor can manage the issue until resolution? Where do you point the finger? It gets very confusing. When it comes to IT management, I like the adage "One throat to choke."
Thus, in the end, I'm in favor of a whole Cloud model. A true, one-stop-shop for all your firm's apps and data managed securely by people who know your world as much as possible. This means building a Cloud in-house that can serve your firm's needs or trusting a strategic third party that can support your whole Cloud.
 
Read more articles by Roy Keely.
 
About the author:
Roy Keely is the VP of Market Strategy at Xcentric and is charged with articulating Xcentric's value proposition to the accounting community. Roy offers a broad range of experience in marketing, sales, and consulting and is passionate about technology, productivity, and market strategy. He enjoys writing and speaking to professional service firms looking to bring practical insight and action to their firms and was recognized in The CPA Practice Advisor "40 Under 40″ for 2012. Roy graduated from the University of Houston with a degree in marketing. He can be reached at info@xcentric.com or (678) 297-0066 ext. 525.

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