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December 6, 2022

Accounting News Roundup: Cloud Confusion; France vs. Google; Imposters | 02.02.16

When It Comes to Tech Services, ‘Cloud’ Can Be a Nebulous Term [WSJ]
Jason Blumer, Greg Kyte and I kicked around the topic of the ubiquitous cloud last Friday and we had some back and forth about what "the cloud" is. You see, there seems to be some confusion out there about what applications are cloud-based and what are not cloud-based and interestingly, this cloud confusion seems to be just as ubiquitous as the cloud: 

Trying to stand out in a hot market—Gartner Inc. expects it to grow nearly 17% to $204 billion this year—some providers use “cloud” in their marketing materials, sales pitches and earnings reports to include a whole range of services, say senior technology executives and industry analysts.

The practice, which critics call “cloudwashing,” isn’t new. But as more companies consider shifting key business applications to the cloud, they say mixing cloud with other services is confusing and raises the risk of getting them locked into computing-services contracts they don’t want or that don’t measure up to expectations.

“Vendors are constantly showing up and trying to sell you everything” as cloud, said Clay Johnson, chief information officer of General Electric Co.’s GE Power & Water. He said it takes “extra work” to determine what are and aren’t “true” cloud services, or which services will be around for the long haul. The latter has become a growing concern as software deals stretch to three years or more.

And wouldn't you know it, there's confusion about how to account for cloud revenue, too:

Under current accounting rules, tech companies have wide latitude to define their cloud revenue. But it can be hard to see how providers stack up if a company’s earnings report might reflect not only sales of software subscriptions, but also server parts, and maintenance and consulting fees.

"Cloud is a growing part of our business," an IBM spox said. "As it grows we’re providing more clarity around what comprises it." That Watson fella seems bright. Maybe they should ask him to explain it?

It's February and merger and acquisitions are still rolling out. Grant Thornton acquired Ouellette & Associates in New Brunswick, two Charleston, South Carolina firms got together and, via Auditor Carousel, EisnerAmper acquired Mallah Furman & Co. I reckon some people are relieved that they can retire now.

Is imposter syndrome a sign of greatness? [Quartz]
Probably not. Or maybe. The real question is — do fraudsters ever suffer from imposter syndrome? "Wait, am I just a fraud?" Yes. Yes, you are.

Previously, on Going Concern…
I wrote about face time in accounting firms.

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