This is a presentation given at the first Cloud Xero event held in San Francisco on February 29, 2012. As this was the first in an ongoing series of Cloud Xero events, we decided to introduce the concepts of cloud computing especially as it relates to the accounting industry. We followed this with a demo of Xero - Beautiful Accounting Software (http://xero.com/). All images used under creative commons and are owned by their respective owners.

1. An introduction to the Cloud
Craig Walker, CTO @storminwalker

2. So what is the Cloud?

3. It’s not using a laptop on a mountain...

4. or on an airplane...

5. Unless you’ve been living
under a rock...
you’re in the Cloud

11. So what is the Cloud?

12. So what is the Cloud?
It is computing on the Internet.

13. The mainframe era...

14. with the client-server era...

18. The Cloud

19. Out of the box and into the cloud
On-Premise
Applications
Data
You manage O/S
Virtualization
Servers
Storage
Networking

20. Out of the box and into the cloud
On-Premise Infrastructure
(as a Service)
You manage
Applications Applications
Data Data
O/S O/S
You manage
Managed by vendor
Virtualization Virtualization
Servers Servers
Storage Storage
Networking Networking

21. Out of the box and into the cloud
Infrastructure Software
On-Premise (as a Service)
(as a Service)
You manage
Applications Applications Applications
Data Data Data
Managed by vendor
O/S O/S O/S
You manage
Managed by vendor
Virtualization Virtualization Virtualization
Servers Servers Servers
Storage Storage Storage
Networking Networking Networking

22. Out of the box and into the cloud
Infrastructure Hosted Software
(as a Service) Applications (as a Service)
You manage
Applications Apps Apps Applications
You manage
Data Data Data Data
Managed by vendor
Managed by vendor
O/S O/S O/S O/S
Managed by vendor
Virtualization Virtualization Virtualization
Servers Servers Servers
Storage Storage Storage
Networking Networking Networking

23. But why the Cloud?

24. Anytime. Anywhere. Any device.

25. Simplification of IT

26. No more upgrades!

27. No more upgrades!

28. Meter up, meter down...

29. No more server rooms...

30. No more server rooms...

31. Disaster Recovery

32. Business Continuity

33. Queensland, Australia - 2011/2012

34. We picked up our laptops on Friday afternoon and
went out the door with them. Because we can work
from anywhere we had not one hour of downtime &
enjoyed working from the coffee shop & our lovely
park across the road...
We didn’t have to worry about ensuring everything
had backed up correctly.
We didn’t have to worry about disks to re-install
software on computers.
Other than where to see our clients we didn’t have
to worry about anything at all.
@growthwise
http://www.growthwise.com.au/our-flooded-office-experience/

35. Christchurch, New Zealand - February 22, 2011

36. Our building was damaged… the 2 buildings next to
us came down.
Initially made sure everyone was OK & told them to
take a day or 2 to make sure their families were OK.
On Friday that week we met at my house for lunch &
told war stories.
On Monday everyone turned up at my house with
whatever laptops they could find & started working,
processing everyone's January GST returns due that
day.
As long as we had an Internet connection we could
carry on.
@djcaSidekick
http://www.stuff.co.nz/the-press/business/6333225/Accounting-firm-shifts-to-the-cloud

37. Reduced Cost

38. Capex → OpEx

39. Total cost of ownership
The old way The cloud way
BUSINESS SOFTWARE SELF MANAGED SERVERS
Word, Excel Server hardware
Exchange Networking infrastructure
Sharepoint Server operating system,
virus scanner, firewalls, etc
ACCOUNTING SOFTWARE Server(s) support and
updates
Quickbooks, Sage PeachTree
Software licenses
Software maintenance
PRACTICE SOFTWARE Upgrades & maintenance
Thompson Reuters Storage/backups
$10,000’s (up front)
$100’s (per month)
$$$ (ongoing)

40. Value

41. Times are tough
Global Changing Organization
economic strategies demands
downturn
• limited credit • budgets cut • do more with less
& do it better
• shrinking markets • projects stalled
• find new markets
• deficit spending • lost resources
• innovate

42. Transform your business
• Democratization of computing
• Reduced time to value
• Limitless scale
• Forces agility
• Gives you reach
• Provides opportunities to re-invent with limited disruption
The cloud dissolves time, space & geography

43. Fake SaaS vs Real SaaS

44. Multi-tenancy

45. Hosted Apps vs SaaS
Hosted apps SaaS
New versions released yearly (if you’re lucky) &
Xero does 10-12 release pa (versionless)
may not be applied
Bug fixes, updates, enhancements instantaneous
Updates per customer, requires outage
& for everyone
Same crappy user experience UX designed for the web - rich, sleek and
(designed for desktop) productive Internet experiences
Can only handle small numbers of
Designed to scale with your business
concurrent users
Less durable & limited by hardware Unlimited
Support provided by hosted vendor Free, full, support provided by the vendor (who
but not by software vendor controls everything)
Backups running constantly
Backups nightly
(no data loss)
Reduced cost structure
High cost structure
(economies of scale)

46. Caveat Emptor:
if it’s not multi-tenant,
it’s not SaaS

47. How do you measure up?
Average hourly rate
Write offs
WIP/lock up days
Revenue : Salary ratio
Average fee per client
Debtor days
Net profit before tax %

48. How do you measure up?
Average hourly rate
Write offs
WIP/lock up days
Revenue : Salary ratio
Average fee per client
Debtor days
Net profit before tax %

49. Efficient
Real Time
Integrated
Connected Smart
The cloud opportunity

50. The cloud opportunity for accountants
OLD WAY Friction CLOUD WAY No Friction
Ask client for datafile Login to Xero
Remind client to send the datafile Compile reports
Check email & save datafile to hard drive Review data & make adjustments
Remember client’s password & version
Upload to my copy of the software
Compile reports
Review data & make adjustments
Send file back to client
Explain & remind how to overwrite current file
$$$ No cost!

51. Old way: customize reports for each client
REPORTS REPORTS REPORTS REPORTS
REPORTS REPORTS REPORTS
Customize Customize Customize Customize Customize Customize
REPORTS REPORTS REPORTS REPORTS
REPORTS REPORTS REPORTS
Customize Customize Customize Customize Customize Customize

52. Cloud way: customize for groups of clients
REPORTS REPORTS REPORTS REPORTS REPORTS REPORTS
REPORTS REPORTS REPORTS REPORTS REPORTS REPORTS
REPORTS REPORTS REPORTS REPORTS REPORTS REPORTS
Customize Customize Customize

53. The Single Ledger
For the For the
accounting practice small business
General ledger Shared Invoicing
Debtors
Financial statements data
Creditors
Management reports
Expense claims
Fixed assets
Contacts

54. The SaaS accounting journey
payment graph
business network
group buying
smart
invoicing
EDI
portal notifications
bank feeds
connected benchmarking
API
multi-user
payments leads and
anywhere
opportunities
online anytime
mobile

55. You can see your clients business in real time...

56. Get alerts when something is wrong...

57. Provide benchmarking across your client base...

58. Become the Virtual CFO

60. Your clients’ business in your pocket...

61. Anytime. Anywhere. Real time.

62. Demo

63. So how do you get started?

64. Get some advice
• Classify your information
assets
• Determine your
requirements & risks
• Do some sums on your
ROI
• hardware/software
savings
• organizational
efficiency
• organization growth

65. Identify the low hanging fruit

66. Research the vendors

67. Research your vendors
• Check their reputation - but remember size isn’t everything
• Security
• understand how secure your data has to be & how the vendor
solves your security problems
• Data protection
• how do they protect your data?
• what’s their backup strategy?
• how can you get the data out?
• who owns the data? (Note: YOU DO!)
• Reliability/availability
• what’s their service level agreement?

68. Try before you buy!

69. Beautiful accounting software

70. Questions?

71. Beautiful accounting software