In scenarios such as Single-family Offices, or where High Net Worth individuals are managing a significant personal portfolio with help simply from accounting staff, there is a need for an uncomplicated and user-friendly software system to deliver:
the recording of financial transactions,
basic performance evaluation and reporting,
simplified financial management tasks such as bank and cash management, and
the productions of accounts.
Not everyone has the resources to deliver on these functions, and perhaps would rather not implement an On-premise infrastructure and IT support system. If this sounds like you, Cloud-based software could be the answer you've been looking for.
What is “Cloud”?
Cloud-based computing is a form of Internet-based type of computing that allows individual users or organisations to make use of remotely-located, shared computer resources for the storing and processing of data in instances where problems are too intensive for any stand-alone machine.
Additionally, cloud computing enables SaaS (Software as a Service), a software licensing and delivery model that allows an organisation’s computers and devices to access software hosted on a remote server on-demand, without having to purchase software licenses. In cloud computing, access and data transmission is facilitated by an Internet connection and the infrastructure and software is provided by specialist cloud computing providers like Microsoft, Amazon or Google.
Different Cloud Computing Models
Within the sphere of Cloud-based computing, organisations can opt for a Public, or a Private Cloud model.
The Public Cloud
The Public Cloud is considered to be Cloud Computing in its purest form. One of the most widely quoted definitions of Cloud, by The National Institute of Science and Technology, explains the technical aspects:
“... a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources... that can be rapidly provisioned and released with minimal management effort or service provider interaction. This model promotes availability and is composed of five essential characteristics (On-demand self-service, Broad network access, Resource pooling, Rapid elasticity, Measured Service); three service models (Cloud Software as a Service (SaaS), Cloud Platform as a Service (PaaS), Cloud Infrastructure as a Service (IaaS)); and, four deployment models (Private Cloud, Community Cloud, Public Cloud, Hybrid Cloud). Key enabling technologies include: fast wide-area networks, powerful, inexpensive server computers, and high-performance virtualisation for commodity hardware.”
Let’s cut through the jargon and break it down to the 4 key factors of Public Cloud:
On-demand: the infrastructure or hardware is already set up and ready to be deployed
Self-service: you can choose what you want when you want it
Scalable: you can choose how much you want and scale up, or down, if necessary
Measurable: Cloud providers make available metering/reporting, so you can be assured that you are getting what you pay for
The Benefits of Public Cloud
Cloud providers who own the infrastructure deliver these services to the general public and large organisations alike and cater for almost any size budget, a big scoring point in scenarios such as a start-up wealth management company.
They do this by using virtualisation technology to split servers into many instances each with their own operating system and computing resources, even if the customer could not necessarily afford their own dedicated server. It’s this ability to create multiple computing instances that drives the benefits of Public Cloud:
Cost Savings – Public Cloud is in most cases less expensive from the perspective of ‘total cost of ownership’ than traditional on-premise computing and will often be cheaper than Private Cloud
Low, or no, Upfront Costs – Public Cloud should require no capital outlay
Reduced Infrastructure Footprint – Since the Public Cloud is located on the vendor’s property, there is no physical infrastructure footprint for Public Cloud customers
Increased Flexibility – Public Cloud gives high degrees of flexibility which allows capacity to be closely mapped to demand
Software can be Decoupled from Infrastructure Constraints – by moving to the Public Cloud, organisations can scale software without concerns about related infrastructure needs
Capacity Planning – Public Cloud results in virtually unlimited capacity, as and when an organisation needs it
Despite the benefits that Public Cloud can bring, especially for smaller organisations, there are some cases where industry or regional legislation might require the use of a Private Cloud model.
The Private Cloud
Private Cloud is much the same as Public Cloud, with the key differentiator that the hardware and software deployed is dedicated to the sole use of a particular organisation. It still makes use of multiple virtual machines across a server and data storage centre, but in this instance it can be managed by the client or outsourced to a Cloud Computing provider. On top of that, it could be located on-premise or hosted within a third party’s data centre.
There are four common combinations that Private Cloud follows:
Off-premise, managed by a third party
On-premise, managed by a third party
Off-premise, managed by the client
On-premise, managed by the client
The first approach would be the solution to achieve optimal business results in order to capitalize on the key benefits of a move to the Cloud:
a) lower the level of operations management that the business must perform on the infrastructure, and
b) lower the amount of capital expenditure needed to set-up the infrastructure;
Security Concerns Regarding Cloud
Cyber security is an important consideration when it comes to Cloud-based services, even more so for individuals who are storing highly sensitive data regarding their personal and financial interests.
The reality is that the level of sophistication in modern data centres far outweighs what most standalone organisations could afford to set up and maintain. From extreme physical security measures, uninterruptable power supplies, HVAC level air conditioning and advanced fire suppression systems, modern data centres leave no stone unturned in their pursuit of security and uptime.
The question that individuals and organisations have to ask themselves is whether they are able and willing to invest in such top of the range infrastructure on-premise and deliver these maintenance services internally. If not, commissioning a Cloud provider that specialises in industry-specific specifications can be more far more secure and less of a headache than an on-premise solution.
The Cloud Vision
The Cloud vision is to make enterprise level technology available to any business big or small. By delegating the installation and maintenance of your financial system to a third party specialist you not only save on capital expenditure, but you gain the assurance that your technology is in the hands of specialists, which allows you to focus on your core business: managing and growing your wealth.
Would you like to know more about Cloud-based Computing options for Financial Accounting and Wealth Management software? Make sure you download our FREE eBook now!
Tony is a member of the Institute of Chartered Accountants in England and Wales and has worked for many years both in accounting practice as well as in the finance industry. He has a long track record in the application of financial and other software both as an end user as well as a provider of software and services to third parties.