I recently read the article “Thinking About Moving to the Cloud? There Are Trade-Offs” by David Freedman in the New York Times. In my opinion, David favors installed software over cloud offerings. With thousands of registered users performing their stock plan administration and option expensing work in the cloud using our system Corporate Focus, I wanted to respond to each of the questions presented in the article.

Will it Work?
David’s bottom line: “If you have complex or industry-specific information technology needs, you may be better off with packaged or custom-designed software.”

Corporate Focus users tracks complicated capitalization tables, perform option expensing work required under ASC Topic 718, and generate reports and documents for counsel, employees, and auditors. Cloud offerings like Corporate Focus not only perform complicated functions and tasks, but developers can easily patch bugs that all users receive immediately. Try getting a patch to all users of an installed system. Definitely not an easy task. I’m also an avid user of Google Apps. Their patch system is so robust that I’ll see features pop-up as I’m working in their system. It is pretty amazing.

Is the Monthly Fee a Deal?
David’s bottom line: “Functionality is paramount, but choose the cloud if you prefer to avoid large short-term expenses.” Here David seems to be pro-cloud, but there is a but as he mentions a user of QuickBooks who went for the installed version, because “I have it forever.”

Unfortunately, you do not have installed software forever. Operating systems change, computers die, and additional functionality is needed. In all of those cases, you’ll need to purchase additional software, especially if you don’t have that original CD the software came on.

The fee people pay for a cloud offering like Corporate Focus is used to continue to improve the software and give users what they need. In fact, cloud providers release updates to their software 3 or 4 times a year. When was the last time you received (or wanted to deal with) installing 4 updates to software you install?

Will You Always Get Access?
David’s bottom line: “The cloud is ideal if you and your employees need access to tools and data from different computers and devices. The cloud can be a problem, though, if you do not always have fast, reliable Internet access, especially if you upload or download large files.”

First, the cloud is more than ideal for giving access to employees. Corporate Focus customers range from attorneys and paralegals to CFOs and controllers to auditors. These people have to work together to ensure capitalization tables are up-to-date, option expensing information is correct, and employee notifications are sent out. The old way of sharing this information was to pass Excel files back and forth. With Corporate Focus, they all log into one place. Of course, that is true about all cloud offerings. Plus, how many companies have all of their employees come into the office everyday to do their work and expect them to only work those hours? Answer…not any that I know. The cloud makes it easy for them to connect from anywhere. I’ll confess that I’ve connected to a cloud offering while on the beach.

The Internet Service in this country could definitely be better, but I’d say we’ve come along way since the days of the 14.4 modem to access the internet.

Will You Get Support?
David’s bottom line: “If you need handholding or if you are not comfortable trying to find advice on user forums, the cloud probably is not ideal.”

This is the item I take the most umbrage with. In our case, users call into support and talk to highly trained individuals who can assist customers in their questions. We do supply FAQs and other online content, but it is to bolster the personal support we give customers…not to avoid it.

Any company who provides a cloud offering who does not provide adequate support for their customer’s needs will have the same type of feedback as companies of installed software who do not support their customers … Bad feedback.

Is Your Data Safe?
David’s bottom line: “If you do not like the idea of trusting anyone but yourself to keep your data safe, the cloud may take you out of your comfort zone.”

Cloud providers will ensure data is secure by utilizing SSL certificates, data encryption, policies and procedures, and SAS 70 Type II documents. It is their job to keep your data secure and any cloud provider who does not and breaks that trust will quickly be out of business.

He mentions one user who keeps financial and HR data on their servers and will not put it in the cloud. I’m guessing their servers are not physically monitored 24/7, require fingerprint access to get into the building, nor track all of the incoming and outgoing traffic. Cloud providers provide that type of security, which most business owners simply cannot do.

In summary, cloud offerings are the way to go in almost all cases. They are flexible, secure, feature rich, and constantly improved. By the way, I practice what I preach. All of Two Step’s business services utilize cloud systems, such as Salesforce, Google Apps, and Quickbooks Online.

If you would like to start your stock plan administration and option expensing work in the cloud today, sign up for a demo of Corporate Focus.