Category: cloud computing

Accounting for business change

Cloud computing is changing the accounting industry, how are the incumbents dealing with this?

Small businesses owe a lot to Craig Winkler – in 1991 he bought a obscure Mac based accounting package called Mind Your Own Business (MYOB) and built it into Australia’s leading small business accounting software.

Today Craig is a director and investor of Xero, a cloud computing service which is MYOB’s fastest growing competitor

At Xero’s Australian partner conference, Craig described how the development of business accounting software has evolved around technology opportunities.

MYOB’s massive growth happened as desktop computers became accessible to small businesses. Prior to 1990, it was rare to find a computer sitting on a business desk and they were largely confined to large financial, engineering and government organisations.

In the early 1990s computer prices dropped and as small businesses started using them, the need for desktop based office software exploded. This drove the growth of software like MYOB, Quickbooks and – most profitably of all – Microsoft Office.

Today a similar revolution is happening as computing moves onto the cloud, further reducing business costs and giving small organisations access to the same resources that only big corporations could access a decade ago.

Cloud based companies like Xero and Saasu are now threatening the incumbents like Quickbooks and MYOB who are responding with their own online products.

Tim Reed, the CEO of MYOB yesterday discussed how his business is moving to the cloud. With MYOB’s legacy of desktop based applications which they claim is used by 40% of Australia’s small to medium businesses it isn’t a straight forward process of dropping the old software and embracing the cloud.

Not that their customers are rushing to the cloud, Tim claims that a survey of their clients found that most want a ‘hybrid’ system where data is saved both on the cloud and on the desktop.

MYOB are catering for the hybrid cloud demand with a pilot program of their AccountRight Live product that adds online capabilities to their desktop software.

This is clear difference between MYOB and its cloud competitors. Xero’s founder Rod Drury maintains that those hybrid solutions are cumbersome and adds far more complexity into software. In Rod’s view, “cloud technologies are the right technologies.”

The difference between the philosophies of MYOB and Xero is reflected across the software industry – most notably this is the difference between Google and Microsoft or Apple.

Both Microsoft and Apple see cloud computing as an adjunct to their desktop, tablet and smartphone products. Data is synchronised between the cloud and the device while work is carried out on both.

Google on the other hand tries to do everything on the cloud.

Both approaches have their benefits, particularly in a world where Internet access cannot always be taken for granted which is the cloud’s biggest weakness. Although as mobile broadband becomes ubiquitous in the developed world, that disadvantage is quickly eroding.

Regardless of the differences in the philosophies, everybody agrees that cloud services are going to revolutionise small business. Both Tim Reed and Rod Drury see how the Big Data opportunities in the cloud are going to give business much more access to real time sales, banking and expense data while being able to benchmark their operations against industry performance.

As Craig Winkler described, we are on another big wave of change and there are great opportunities for the businesses that figure out how to use it.

Paul travelled to Melbourne attended the Xero Australian Partner conference courtesy of Xero. He received a private media briefing from MYOB.

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Building an ecosphere

How customers, followers and developers make a business dominant in its field

One of the keys to success for a software platform is its ecosphere  – the community of developers, consultants and advocates that grow around a service.

By far the most successful company in building a community around its products is Microsoft, who over the years have attracted hundreds of thousands of developers and partners to support Windows.

Microsoft’s thousands of partners are the company’s greatest asset in beating back the threat posed by Google, cloud computing and Apple. The sheer size Microsoft’s supporter base gives it a natural buffer against competitors.

Apple too have that buffer, in the company’s darkest days during the late 1990s it was the true believers who kept the flame burning. The ecosphere that has developed around the iPhone and iPad has now cemented Apple’s iOS as being the dominant mobile platform.

The same thing happens around various industry software packages, as one company becomes identified as the leader in their sector they develop a following among users in that industry.

At the Xero conference last weekend, the cloud accounting software company showed how an ecosystem of developers, accountants and bookkeepers are developing around their software platform.

Companies as diverse as inventory management, point of sale system and document scanning services are plugging into Xero’s accounting data which adds functionality for customers.

In turn, those third party services makes Xero more attractive to the bookkeepers and accountants looking for ways to make their jobs, and those of their clients, easier.

Xero’s biggest competitor, MYOB, also has that strength with an army of certified consultants from long being the incumbent in their market.

The battle between Xero and MYOB for dominance in the business accounting software market will depend upon how well the incumbent can hold onto their existing markets and the effectiveness in the incumbent building a ecosphere that makes the newer product more attractive.

Disclaimer: Paul travelled to Melbourne and attended the Xero Partner conference courtesy of Xero.

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Driving Windows 8

Can Microsoft Office 2013 drive Windows 8 sales?

Microsoft today released their preview edition of Office 2013, the product that underpins the company’s dominance of the business IT sector.

Users sticking with an older version of Windows hurt Microsoft’s bottom line and one of the key parts of the company strategy with Office is to drive adoption of the latest operating systems which usually means buying new computers.

The problem for Microsoft is that there has been no real compelling reason for users to upgrade for a decade since the release of Office 2003.

Coupled with the failure of Microsoft Vista, this had damaged the PC industry’s model of users upgrading computers every three to five years.

Microsoft would be hoping the cloud integration features, the same versions on desktops, tablets and smartphones coupled with keen prices will be enough to make contented XP users make the jump to Windows 8 and buy a new computer as well.

Whether it does will depend on the market caring – if users simply don’t care about Office 2013, let alone Windows 8 on either desktops or smartphones, then Microsoft will struggle.

Unfortunately for Microsoft, the era where they could dictate what people used on their computers is over and that could be their biggest management challenge of all.

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ABC Nightlife Computers: The state of tech

July’s ABC Nightlife tech looks at viruses, online frauds, security and social media

Join Paul and Tony Delroy to look at some of the trends and events that are affecting how you use phones, computers and internet in your home or business.

A lot’s happened in the tech world over the last few weeks – Facebook has gone from the web’s golden business to being shunned, new tablet computers have been launched and we’ve had a virus threaten to knock people off the Internet.

If you missed the show, you can listen to it online through the Nightlife website. Some of the topics we looked at included;

  • So what was the DNS Changer Trojan? Did the FBI really take over a criminal computer network?
  • Could a virus really damage computers and bring the Internet to a halt?
  • Is it true the US, Israel and North Korea are using viruses to attack other countries’ computers?
  • Should we worry about viruses on smartphones and tablet computers?
  • What about virus hoaxes? There’s a good one going around about Facebook at the moment?
  • Both Microsoft and Google have launched new tablet computers, will they knock off the iPad?
  • Microsoft’s tablet is going to run the new Windows 8 operating system, how does that look?
  • Facebook seems to have gone from hero to zero since they launched on the stock market. What happened?
  • There’s been some pretty serious Facebook privacy changes recently, what should people watch out for?
  • Microsoft have had some big security updates this week, what are they.

For the Microsoft updates we mentioned, the major security updates can be downloaded from the Windows Update page or the Automatic Updates in Windows Vista and 7.

Windows 7 and Vista users should also disable the desktop widget feature, Microsoft have two fix it tools available for download and users should run both.

Listeners questions included the following problems;

Alternatives to Outlook Express

George was looking at upgrading to a new version of Windows that doesn’t have Outlook Express included but still wants a computer based email client rather than trusting a cloud service.

Some of the alternatives include;

Antivirus programs

Margaret asked about antivirus options for Macs, there’s a couple of free antivirus programs designed for the Apple Mac

For Windows users, the easiest free anti-virus to use is Microsoft Security Essentials.

Microsoft Silverlight on Android

Accessing Microsoft Silverlight based services like NineMSN on Google Android devices can be a problem as Jason found.

Unfortunately at this stage there’s no clear solution for playing Silverlight sites on Android devices as Moonlight, the open source Silverlight player has been abandoned.

Next Nightlife spot

Our next Nightlife tech spot will be on August 6 and we’ll decide the topics closer to the dates. Watch the website for details over the next few weeks.

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Hanging on the telephone

Is there a digital divide appearing in customer support services.

Ever tried to call an online company about a problem? As the New York Times explains, it’s often hard to find the telephone number, let alone someone to answer your call.

The NY Times article worries a new type of digital divide is appearing between those happy to do business using email or social media and those who who demand to speak to someone.

In reality, the truth is more subtle than just generational differences – it’s about the web2.0 service-free business model where few, if any, resources are spent on customer support. The idea is the an assistance can be given out on “self service” basis through a website or, better still, crowdsourced on a user forum where the customers work together to figure out solutions themselves.

For many of the web based cloud computing and social media businesses, this model is essential to their survival. If you were to add a customer support department answering telephones, the viability of the business would collapse.

While it’s uncertain if that business model is sustainable for many of these web based companies, it’s interesting to ponder how many phone calls most businesses could avoid by having relevant information on their website.

It’s worthwhile looking at call logs and asking your staff what are the most common questions to your business. Answering those on the company web site might mean happier customers and fewer staff distractions.

For some businesses, letting customers discuss issues in an online company forum might be a way of crowdsourcing support and giving ideas for future products or service improvements.

Rather than leaving customers and staff hanging on the phone, having relevant and helpful information on the website saves everybody time and money.

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How much did Vista really cost Microsoft?

Microsoft Vista’s failure hurts Microsoft today.

Microsoft Vista was the company’s despised stepchild – released way past schedule, clunky, slow and disdained so much by the market that PC manufacturers started offering “downgrades” to Windows XP to attract customers.

Despite the embarrassment, Microsoft retained its position as the world’s leading software company and does so today. But Vista certainly did hurt Microsoft and today’s marketplace shows the deep, long term effects of that damage.

Research website Asymco earlier this week looked at the ratio of Windows PCs sold to the sales of Apple Macs over the last 30 years. The ratio peaked at 56 to 1 in 2004.

Today that ratio is 18 and when phone and tablet sales are added in, the ratio is approaching 1:1. Apple has caught up.

It’s no accident 2004 is the peak of the Windows-Apple ratio. In 2004 Windows XP had matured after three years on the market, the older computers running Windows 98 or ME (another hated operating system) were being retired and a new version of Windows – codenamed Longhorn – taking advantage of newer technologies and with improved security was due to be released.

On August 27, 2004 things started to change with Microsoft’s announcement Longhorn would be delayed two years. This effectively broke the product roadmap that underpinned the business models of Microsoft and their partners.

To make matters worse, Apple were back in the game with their OSX operating system well established and a steady stream of well designed new products coming onto the market.

For consumers and businesses one of the advantages Windows systems had over Apple was the cost difference. The “Apple Tax” started to be eroded by the company’s move to Intel CPUs which delivered economies of scale coupled an aggressive program of tying up the supply chain with key manufacturers.

Then Longhorn – now known as Microsoft Vista – was released.

Despite the cheerleading of the Microsoft friendly parts of the technology media, consumers weren’t fooled. The product was slow and buggy with a new interface that confused users. Making matters worse was Microsoft’s ongoing obsession with multiple versions offering different features, something mocked by Steve Jobs,  which further confused the marketplace.

Vista languished, customers decided to stick with Windows XP or to look at the faster and better designed Apple computers, and Microsoft’s market share started to slowly erode.

By the time Windows 7 was released Apple had clawed back their market position, launched the iPhone and caught the shift from personal computers to smartphones.

Probably the biggest embarrassment of all to Microsoft was the launch of the iPad, the market had been gagging for good tablet computer since the late 1990s and Microsoft’s partners had failed to deliver, partly because Windows XP, Vista and 7 didn’t perform as well as Apple’s iOS on the tablet form factor.

Microsoft’s completely blowing a decade’s lead in the tablet market is almost certainly due to the misguided priorities and feature creep that dogged Vista’s development. This is now costing the company dearly.

Asymco’s conclusion of Microsoft’s new market position is stunning and accurate.

The consequences are dire for Microsoft. The wiping out of any platform advantage around Windows will render it vulnerable to direct competition. This is not something it had to worry about before. Windows will have to compete not only for users, but for developer talent, investment by enterprises and the implicit goodwill it has had for more than a decade.

It will, most importantly, have a psychological effect. Realizing that Windows is not a hegemony will unleash market forces that nobody can predict.

Vista’s cost to Microsoft was great, it meant the company missed the smartphone surge, the rise of tablets and – possibly most dangerous of all to Microsoft – the move to cloud computing.

A lot hangs on Microsoft’s next operating system, Windows 8. Another Vista could kill the company.

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Leaping seconds, new millennia

The leap second brings back memories of the Y2K frenzy

Along with a storm disrupting cloud computing services, last weekend also saw computer networks being disrupted by the leap second.

Servers needed to rebooted, websites froze and – as usual whenever there’s a technical glitch – airline check in systems fell over causing chaos for thousands for travellers.

It’s all very reminiscent of what we thought would happen with the Y2K bug. While sensible people didn’t think planes would fall from the sky, dams collapse and the world financial system grind to a halt (we had to wait another eight years for that), we did think there would be a lot of dumb little things to irritate us over the first few days of the year 2000.

That no real disruption happened, not even the airlines check in systems failed or tried to check in people for 1901, was credit to the entire IT industry. It a shame that the success in dealing with the complex unknowns of what was called the Y2K “bug” – which wasn’t really a bug but a feature – ended up being portrayed a scam by the entire IT sector.

A couple of years ago I was talking to a finance guy who claimed “the whole global financial crisis was a scam, just like Y2K.”

That view overlooks how the IT industry knew it had a problem and dealt with it, as opposed to the banksters and their friends in government who denied there was a problem right up to the moment it happened.

Of course it’s easy to ignore your business or industry has a problem if you know your friends in government will make sure your bonuses, holiday homes and private school fees will be guaranteed by the taxpayer, the taxpayers’ children and the taxpayers’ grandchildren.

Last weekend’s leap second and the cloud computing outage teach us that technology isn’t infallible and that things do go wrong.

For most of us when they do go wrong, we won’t have the government to bail us out.

This isn’t anything new. In any complex society, the unexpected can disrupt our comfortable way of living in ways we don’t expect. It’s something all of us should occasionally think about.

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