The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight — everything you need to help you prosper and enjoy the accounting profession.
Microsoft is beta testing a new subscription-based product called Office 3 following applications: Microsoft Office Professional Plus (Microsoft’s flagship productivity suite, which includes Word, Excel, PowerPoint, and other applications); Microsoft Exchange Online (e-mail, mobile access, contacts, anti-virus, and anti-spam); Microsoft Sharepoint Online (collaboration tool for building public or team-based Web sites); and Microsoft Lync Online (an instant messaging and online meeting tool).
In 2011, Microsoft Dynamics CRM Online will join the above offerings. This is not Microsoft’s first foray into Cloud-based apps. Anyone with a free SkyDrive account can use the Office Web Apps (browser-based versions of Word, Excel, and PowerPoint) and store up to 25 GB of documents online. Further, Microsoft has been offering subscription plans for the Business Productivity Online Standard Suite that has offered a similar mix of communication products sans Microsoft Office.
Anyone interested can sign up for the beta of either the Small Business or Enterprise versions of the program. Those who are accepted into the beta program receive the desktop version of Office 2010 Professional Plus, along with online access to Exchange, SharePoint, and Lync. Once Office 365 leaves beta, the service should be of particular interest to small business owners.
Exchange and SharePoint typically require dedicated servers, which in turn require specialized information technology expertise. These cloud-based versions will enable just about any business to take advantage of these powerful applications for e-mail, group calendaring, and collaboration.
The Small Business plan will cost $6/user/month for 1 to 25 users and will include:
• Office Web Apps
• Exchange Online, including 25 GB mailboxes, and the ability to send 25 MB attachments
• SharePoint Online
• Lync Online
• Support provided via a moderated community forum
The Enterprise plan will cost $24/user/month and will include:
• Office Professional desktop software
• Office Web Apps
• Exchange Online, including 25 GB mailboxes, and the ability to send 25 MB attachments
• Sharepoint Online, including Forms, Access, Visio, and Excel services
• Lync Online
• 24/7 IT-level phone support
• Financially-backed 99.9% uptime service, or, in other words, downtime of less than 9 hours per year
Larger businesses also will be able to subscribe to a kiosk plan that starts at $2/user/month to offer e-mail, SharePoint sites, and Office Web Apps to workers without dedicated computers. An Office 365 for education will be available in the future to help educational institutions provide services to students without maintaining servers.
Many businesses aren’t yet comfortable with having mission-critical applications and data residing in the Cloud, but this combination of low cost and high flexibility might cause skeptics to pause and consider the possibilities.
About the author:
David Ringstrom, CPA, heads up Accounting Advisors, Inc., an Atlanta-based software and database consulting firm. Contact David at [email protected].
Blockbuster Files for Bankruptcy After Online Rivals Gain [Bloomberg]
“Blockbuster Inc., the world’s biggest movie-rental company, filed for bankruptcy after failing to adapt its storefront model to online technology pioneered by rivals such as Netflix Inc.
The company listed assets of $1.02 billion against debt of $1.46 billion on a Chapter 11 petition filed today in U.S. Bankruptcy Court in New York. The company said it reached a deal with a group of bondholders on a plan of reorganization and secured a $125 million loan to finance operations.”
SaaS security: McAfee’s response [AccMan]
“One question that gets raised time and again: Is SaaS secure? The answer depends on with whom you speak. My take is that any vendor that cannot answer a set of well defined questions is probably not going to meet the minimum requirements for me to recommend a service.
Earlier today I attended a Salesforce.com presentation and among the speakers were Dell, Wells Fargo and McAfee. Both companies are deploying Salesforce and in particular its Chatter service to thousands of users. I put the question to Marc Benioff, CEO Salesforce: ‘How do you demonstrate to users that services such as yours are secure without going down technical rat holes?’ ”
Friended for $100 Million [WSJ]
“Mark Zuckerberg, the 26-year-old founder and chief executive of Facebook Inc., plans to announce a donation of up to $100 million to the Newark schools this week, in a bold bid to improve one of the country’s worst performing public school systems.”
Senate Holds Hearing Today on Lessons from the Tax Reform Act of 1986 [TaxProf Blog]
“Senate Finance Committee Chairman Max Baucus (D-Mont.) will convene a hearing [today] to examine the lessons from the Tax Reform Act of 1986 and look at ideas for tax reform that will make the code simpler and fairer, while helping American businesses compete in the global economy.”
Top Marginal Effective Tax Rates by State under Rival Tax Plans from Congressional Democrats and Republicans [Tax Foundation]
The big winner is Hawaii with California taking first runner-up.
The Richest People in America [Forbes]
The usual: Gates, Buffett, Ellison, a lot of Sam Walton offspring, a pair of Kochs and Hizzoner.
FASB’s Tort Bar Gift [WSJ]
“In the eternal war between the plaintiffs bar and corporations, the lawsuit pack already owns the Senate andNow it seems the nation’s accountants want to give the lawyers another edge.
The Financial Accounting Standards Board (FASB) will soon begin considering whether to require companies to account for the potential cost of ongoing litigation. Supporters insist this is merely about disclosure, but the proposal would hurt investors by offering roadmaps for new litigation and bigger settlements. We first wrote about this in 2008, and FASB retreated amid a business backlash. But FASB’s revised proposal, issued last month, isn’t much better.
Take the provision requiring companies to disclose their liability insurance coverage. Lawyers would be able to target their damage requests to the coverage maximum, or launch new lawsuits in the knowledge that more insurance dollars remain. This is why judges typically insist that coverage only be divulged under a secrecy order.”
Emmy votes are in and now it’s time to start counting [Los Angeles Times]
“With the Emmy Awards just a week and a half away, Ernst & Young LLP, the accounting firm in charge of counting the thousands of votes, will now kick into high gear figuring out who will be going home with a trophy come Aug. 29.
The deadline to get ballots in was 5 p.m. Tuesday. The last vote, as always, was turned in by veteran actress Jody Carter, who actually comes down to the firm’s downtown offices to fill out her ballot in person and turn it in to Andy Sales, the Ernst & Young lead partner for the prime-time Emmy Awards.”
Judge Denounces a Barclays Settlement [Reuters]
“The judge, Emmet G. Sullivan of Federal District Court, said at a hearing Tuesday that he was concerned about the proposed deal in which the bank had agreed to pay $298 million to resolve the charges over its dealings with Cuba, Iran, Libya, Sudan and Myanmar.
“This is a sweetheart deal,” Judge Sullivan said, adding that the average American citizen who gets caught robbing a bank does not get a deferred prosecution agreement, as Barclays did.
PricewaterhouseCoopers Calls on Organizations to Manage Diversity with their ‘Heads, Hearts and Wallets’ [PR Newswire]
“Organizations that leverage diverse talent and manage diversity with their ‘heads, hearts and wallets’ will gain long-term competitive advantages, noted Greg Garrison, Partner and Vice Chairman, PricewaterhouseCoopers LLP (PwC), in a keynote speech at the 2010 Ascend Annual Gala. Ascend is a 5,000-member professional leadership organization dedicated to leveraging the potential of pan-Asians.
Though organizations typically approach diversity from three perspectives — the head, which looks at diversity academically; the heart, which view it in moral terms; and the wallet, which ties diversity efforts directly to the bottom line — unsuccessful diversity commitments often occur because organizations approach the effort from just one of those mindsets.
‘Successful leaders approach diversity using all three lenses,’ stressed Garrison. ‘Looking through these lenses, leaders must act upon what they see and anticipate what is to come to successfully shape the talent that will drive business performance.’ ”
Office-Leasing Rebound Could Be Deceiving [WSJ]
“In New York, accounting giant Deloitte recently asked the city for $11 million in tax breaks that would support a consolidation of its New York offices at 4 World Financial Center in downtown Manhattan. Under the lease deal, which isn’t final, Deloitte—which now occupies some 934,000 square feet of office space in the city—would eventually move those operations into just 390,000 square feet at 4 World Financial Center, with options to expand to 630,000 square feet.
Deloitte would spend more than $90 million on building and fitting out the space with a new, more efficient design, according to its application for the tax breaks.”
IRS Probes Apple Employee for Kickbacks [Debits & Credits]
“A grand jury charged Apple’s global supply manager, Paul Shin Devine, who was responsible for selecting suppliers of enclosure materials for headsets for the iPhone and iPod. According to Justice Department prosecutors, who carried out a joint investigation with the IRS’s Criminal Investigation division and the FBI, Devine allegedly transmitted confidential internal Apple information to suppliers in China, Singapore, South Korea, and Taiwan. In return, the suppliers agreed to pay him kickbacks, including payments based on a percentage of the business they did with Apple.”
SaaS switching – should we care? [AccMan]
“In theory at least, a SaaS/cloud approach makes it very easy to switch and the cost is relatively low, provided there isn’t a huge amount of data that needs unpicking and reforming. There is no throwing away of capital investments so no need to justify the decision in the same way you would if you’d installed an on-premise solution. Service providers that offer a freemium approach or a limited try-before-you-buy arrangement may appear attractive but even then it is only as you start to iron out the wrinkles that you find where the weaknesses lay.”
I don’t have a problem with that result. We can argue all day long abo really “needed” as opposed to “pushed”. That’s a philosophical debate, indeed, it’s a MORALISTIC debate. In Obama’s address to the USA (re: BP oil sands) he prayed for a “hand to guide us.” Was he talking about the hand of god, or the invisible hand? … But I digress.
My point about CRM was much less lofty. CRM systems are simply about attempting to know your customer. How much data can we collate and analyze in order to maximize our value proposition? Or, if you’re a cynic – how can we, as Homer Simpson would say, “cram one more salty treat into America’s already bloated snack hole?”
Sidenote: Back in the heyday of the SUV craze, there was a great interview on 60 Minutes with some analyst/pundit who described the motivation that seemed to underlie the populating of these beasts. He described it as “reptilian.” The term stuck with me and I find it helpful to think about in around any purchasing decision of consequence. A well executed CRM can create a veritable “Jurassic Park” of suckers if that is what one is so inclined to create. Although, it doesn’t have to be that way. It doesn’t have to be evil.
My point this week though is less about CRM per se and more about what happens when an enterprise software implementation goes awry. A different kind of evil. There have been two big stories recently detailing lawsuits being leveled against firms who had been contracted to install an enterprise system and had allegedly failed to deliver on the contract.
In one case, EDS (now owned by Hewlett Packard) just agreed to pay British Sky Broadcasting $460 million for a failed CRM implementation. This was from a project undertaken in the year 2000 and abandoned two years later. The settlement is four times the value of the budgeted project cost.
In a second case, Marin County, CA is suing Deloitte Consulting for an alleged failure in rolling out an ERP (Enterprise Resource Planning) system. Marin County is seeking $30 million. Their contention is that Deloitte didn’t have the technical skills on the software in question. That’s an important point. This type of technical skill is of the “use it or lose it” variety.
You see, buying an enterprise software system isn’t like buying a vehicle. You can’t just hand the wheel over to your reptilian brain and pray for the invisible hand to hook up financing and you’re on your way.
There’s work involved, normally a third party, that is paid to configure the software and integrate it into your organization’s existing infrastructure. In a complex business model, the process of defining and integrating all the business rules, data flows, and connections can be daunting… sometimes, impossible. Failure, unfortunately, is always an option.
These recent examples deal with alleged failures on the part of the third party implementers, but failures can occur anywhere within “hell’s half-acre.”
I’ve seen examples where it was clearly a management failure to provide project leadership that created an implementation failure. The example I am thinking about resulted in the company taking a $2 million dollar charge then having to start over. When I went to see them, it looked like they were heading right back down the same road. Making the same mistakes. Me? I can’t help someone who doesn’t want to be helped.
Some folks point to Saas products as a way to alleviate these nightmare scenarios. If only it was that easy. Wherever a business has an existing IT architecture, there is the possibility of an integration problem (assuming you want integrated systems which I have to believe that you’ll want). There is another company I can think of who, when I met them, had been working for at least 6 months on an integration with a Saas ERP system and their back office. For a number of reasons, it really just didn’t seem like it was going to work. And the red flag for me was that the CFO and the Director of Finance had vastly different views as to how the project was going.
These are just a couple examples I can name from my own experiences and I’m not even in the software implementation game!
The moral of the story is know the statement of work inside out. Understand the terms of the contract. Technical skills are finite. Be very clear on the desired outcomes.
And beware of the reptilian brain.
Geoff Devereux as been active in Vancouver’s technology start-up community for the past 5 years. Prior to getting lured into tech start-ups, Geoff worked in various fields including a 5 year stint in a tax accounting firm. You can see more of his posts for GC here.
Earlier this week we got the chance to speak with Mario Armstrong, on-air tech contributor for NPR’s Morning Edition and tech contributor to CNN. We discussed several technology issues, including SaaS and social media, for small businesses to consider to mark National Small Business Week.
There you have it! Cloud solutions, SaaS, social media. They’re all important tools for small business owners. You can spend your weekend boning up.
Adelphia’s Rigases Win New Hearing in Tax-Fraud Case [Bloomberg]
John and Timothy Rigas are both doing time for their convictions in the Adelphia fraud but the their conviction in New York doesn’t seem to have satisfied the Keystone State. The two mean have been indicted on several tax-related charges in PA. Despite the prosecutorial zealousness, the federal appeals court in Philly ruled that prosecutors must allow the Rigases to present evidence that they are getting the double jeopardy treatment, as the tax charges are directly related to their crimes at Adelphia.
FASB Codifies SEC Announcement on Foreign Currency [Compliance Week]
Occurrences in Venezuela are capable of affecting the FASB’s agenda as Compliance Week reports that this recent guidance, “focuses on foreign currency issues related to investments or operations in Venezuela.” So, if you’ve got clients or do business in Hugo Land, you should probably check out Accounting Standards Update No. 2010-19.
Sage: Paul Walker CEO’s successor [AccMan]
“Let’s be honest – Sage is in the crapper,” sayeth Dennis Howlett.
Grant Thornton LLP purchases assets of Dallas-based firm Avalion Consulting LLC [GT Press Release]
Grant Thornton’s purchase of the group, “comprises two partners; Avalion’s IT consulting staff; and its IT and governance, risk and compliance (GRC) intellectual property, including Avalion’s patented GRC software solution – ComplianceSet®.”
ComplianceSet is a SaaS solution that “serves as the technical foundation for a process-based approach” for governance, risk and compliance; SOx, internal audit, and enterprise risk management.
Cloud Computing can be an intimidating subject area simply due to the sheer number of articles, blogs, conferences, and information on the matter. My goal in this post is to split the discussion based on the perspective of the writer.
While researching this post on “Cloudsplitting”, I became formally acquainted to the concept of an unreliable narrator:
“a narrator, whether in literature, film, or theatre, whose credibility has been seriously compromised.”
The nature of the narrator may be immediately clear or it may be revealed later in the story. Sometimes it is revealed at the very end, at which point you find out your narrator has been totally unreliable! This makes yo story… which you should…. the guy was unreliable.
The author, Russell Banks, creates new context around the real events through his imagining of what Owen Brown’s views might have been. In this case, John Brown comes off as a lot less crazy than he may have come off otherwise.
(It’s also a hill in upstate NY near Bank’s home – ‘Tahawus‘ is the native Algonquin name for Mt. Marcy – the highest peak in the Adirondacks. It translates to ‘Cloudsplitter.’)
Emotional attachment and years of hermit-like isolation warp the perspective of our fictional version of Owen Brown. Unreliable. Quite frankly, I’ve seen the same in business.
I don’t want to fall for the same mistake.
We’re not hermits holed up in a cabin somewhere living on bottled water and beef jerky.
That’s one of the biggest differences between the introduction of Cloud technology and the introduction of previous computing technology. This time around information abounds. Whereas in the past, information about new technology was carried through very limited channels. And even then, it may have traveled indirect routes.
With our proliferation of information, it’s more important than ever to consider the source of the information. After all, the greatest trick the narrator ever pulled was convincing the world he didn’t exist…. or something.
Be it me and my Cloud Computing story or the guy at your office who waves his arms and decries this “parlour trick” technology.
Where is your information coming from?
I’ll point you to a few resources in a minute that, hopefully, will pass the narrator reliability test. First, if I may, I want to take the opportunity to split Cloud Computing into two separate camps.
In one camp, we’ll have Techie Cloud. In the other, we’ll have Business Cloud.
This is the stuff relating to the functioning of a cloud environment. What’s the architecture? Where’s the data? How do I manage it?
It’s the kind of stuff your Systems Administrators and DBAs and IT Managers would want to know. For instance, I want to play around with Amazon Web Services to create a new computing environment. Do I need any special tools to work there?
Yes, there’s a front-end tool called Rightscale that makes creating a computing environment easy.
While interesting from an academic perspective, your average business user will probably get limited value from seeking out tonnes of information about Techie Cloud. Recognize it when you see it.
This is the stuff relating to using cloud-based software. The business user who is looking for a “consumerized” web experience. What does it do? Is it easy to learn? What’s the cost? How do I sign up?
It’s the kind of stuff the accountants, marketers, and salespeople would want to know. For instance, I want to find a way to manage my team’s projects. Can I get going with something quickly?
Yes, try Basecamp.
And Business Cloud is separate from the business of cloud which we’ll get into later.
The reason I am going around Cloudsplitting is because the content I’ve been finding lately doesn’t discriminate with respect to audience. You are as likely to jump into an article that’s geared toward IT as you are to find an article for a Business User’s perspective.
Forward the Techie Cloud articles on to your IT departments. There’s a view out there that Cloud is going to make IT deparments obsolete. I disagree. I think Cloud will free up IT from the mundane custodial services of server maintenance becoming a more strategic partner with management. I’ve written before about accountants being the dishwashers of business. We’re the dishwashers and IT are the custodians (or janitors if you want to be unkind about it).
Evaluate the reliability of the source. Evaluate for audience.
8 Tips for Getting Started in Cloud Computing (by Rackspace)
What Does the Future Hold for IT? (Bloomberg)
Cloudcamp – formed to provide a common ground for the introduction and advancement of cloud computing
ICPA Trusted Business Solutions (CPA2Biz) – all of these are Saas offerings
Geoff Devereux works in a marketing/social media role with Indicee, a Saas Business Intelligence company, bringing B.I. to mere mortals. You can see more of his posts for GC here. H/t to Jesse from Cloudsplitter Mountain Guides for the translation and Greg_Smith for the pic.
“How dare Sage criticise anyone else! They exist because clients and accountants don’t want to change. If only clients could see what SAAS would give them (provided they had the right accountants). Perhaps I need to become an evangelist!”
Sen. Sherrod Brown Prods SEC/FASB to Fix Accounting Standards [The Summa]
This is Professor Albrecht’s take on Senator Brown’s amendment SA 3853 to the S. 3217: Restoring American Financial Stability Act of 2010. The Professor is less concerned about this particular attempt at financial accounting legislation, reasoning that the SEC and the FASB have had plenty of opportunities to fix these issues (e.g. repurchase accounting) and have passed them up.
Given the severity of the problems, and the inability of today’s standard setters to gird their loins and solve the problems, is it appropriate for Congress to pass a law directing the SEC and its standard setter to produce a desired outcome? Absolutely. Accounting standard setting is an inherently political process, as I explained in my popular essay, “Economic Consequences and the Political Nature of Accounting Standard Setting.” Because the SEC has passed on its legislative charge to establish accounting standards that adjudicate between competing economic interests, and because the private standard setters follow their own political agendas when preparing accounting standards, it behooves Congress to step in when things get too far out of whack with national priorities. Such is the case here.
In other words, s— or get off the pot, FASB and SEC. The argument is a fine one, however, if legislation of accounting has to force the FASB’s into action, where does it end? When FAS 157 was being decried as the cause of all our problems, Barney Frank called in Bob Herz, scared the living bejeesus out of him, and got the result he wanted. Is that preferable to this situation? That depends. At the very least, the Sherrod Brown method susceptible to the influences of others while the B. Frank method skips the voting and signing stuff altogether (which has proven tricky in the past).
Former H&R Block CFO gets $620,000 cash in severance [KCBJ]
Becky Shulman (no relation to the Commish, as far as we can tell) is getting $620k for walking away from H&RB along with automatic vesting of 148,725 outstanding stock options. There’s no indication that she is eligible for lifetime complimentary tax prep service.
Intuit to buy Medfusion in $91M deal [SV/SJ Business Journal]
Intuit, owner of QuickBooks, Mint.com, Quicken, etc. has now added Medfusion to its stable, expanding its SaaS holdings. The deal is scheduled to close this July, the 4th Quarter of the company’s fiscal year. CEO Brad Smith, from the press release:
“This transaction expands our software-as-a-service offerings with a solution currently used by more than 30,000 healthcare providers, the vast majority of whom are essentially small businesses. The combination of Medfusion’s industry-leading patient-provider communication solutions and Intuit’s expertise in creating innovative solutions that improve the financial lives of small businesses and consumers, will help us create new solutions that make the clinical, administrative and financial side of healthcare easier for everyone.”
Figuring out how to sum up Cloud Computing and Software as a service (SaaS) in the space of ~800 words would absolutely require the biggest, puffiest, most cumulus metaphor that ever precipitated understanding over the dry, barren plains of ignorance EVER! Something like….
king Business Applications By Storm, or
– Burning off the Fog Around Cloud Computing, or
– Cloud Computing goes from Light Showers to Torrential Downpour, or even
– Quit Jiiiivin’ Me Turkey, You Got to SaaS it! (a Turkey is a bad person)
Because this thing is growing like a Class 5 Hurricane sucking up warm air over the Gulf of Mexico in mid-September, and you’re in the eye of the storm baby!
Enough! I can’t… I just can’t brew up another hackneyed metaphor!
All joking aside, Cloud Computing and SaaS are now “required reading” if you’re even remotely involved with technology (i.e. you use a computer). I can help you understand this stuff better, but first some disclosure:
I work for a SaaS company. My paycheck depends upon acceptance of this technology.
If you can accept this embedded bias, I’ll try to suppress any overt advocacy while providing a synopsis of this space over the course of the next few weeks. Call it Saas 101.
So, what is it?
We’ll get into this in more detail soon because there’s more to it, but very simply:
Software as a Service – A software application that you access online without having to download anything to your computer.
Cloud Computing – Provides computing power and data storage on an “as needed” basis much the same way as a public utility provides electricity.
Why should you care?
At the very least, you should care because you are already using this stuff for personal web activities (e.g. Facebook – think privacy, Twitter, LinkedIn, Gmail, etc). And I’ll bet you dollars to donuts that the next software sourcing project your company undertakes will include Cloud and Saas representation.
This is a bet I’ll win because even the big, established players in the software world like IBM, Oracle, SAP, and Microsoft are running to try and get in front of this thing on the business side.
You want to know about this.
Where did it come from?
How did Software as a Service and Cloud Computing as we know it come about?
Well, what’s in a word?
Again, there’s more to it, but without rekindling the internecine nerd-fighting I think tracing the roots of this movement back to Marc Benioff, the founder, Chairman & CEO of Salesforce.com is not unreasonable for our purposes. He was arguably the most vocal advocate for looking at software delivery in a new way back before this stuff HAD a name. Salesforce.com launched as an unknown start-up back in 1999 and is now one of the leading CRM (Customer Relationship Management) products Cloud or otherwise and is traded on NYSE with a market cap of over $10 Billion.
Along with another early entrant, Netsuite, these guys let the genie out of the bottle. Interestingly, both companies have deep, deep roots back into Oracle Corp., Oracle, a company that, according to Oracle, “would change the face of business computing forever.” I don’t dispute the claim though. And I would take it one further saying, the apple doesn’t fall far from the tree.
The creation of Salesforce and Netsuite were both extremely capital intensive. In order to host their customers (i.e. users of the software), tens of millions of dollars were required to build the data center infrastructure. You’re not required to buy servers and hardware, so where do you think all your data is residing? In a cloud? We haven’t advanced that far.
But we have advanced.
Today companies building Cloud apps don’t tend to build their own data centers, at least not right off the hop. Another important innovation in Cloud comes from companies like Amazon. Apart from books, Amazon has a whole other line of business providing computer infrastructure on a rental basis. It’s like a power grid for computing.
This changes the business model for companies who build software in the same way these Cloud app companies are changing things for you.
Suddenly, your IT goes from being a Fixed Cost to a Variable Cost.
More next week.
Geoff Devereux as been active in Vancouver’s technology start-up community for the past 5 years. He regularly attends and contributes to the growing entrepreneurial ecosystem in the city through the Vancouver Enterprise Forum, guest blogging on Techvibes.com, and as a mentor with ISS of BC. Prior to getting lured into tech start-ups, Geoff worked in various fields including a 5 year stint in a tax accounting firm. He is currently working in a marketing/social media role with Indicee, a Saas Business Intelligence company, bringing B.I. to mere mortals.