In a nutshell, cloud computing is the on-demand availability of computer system resources, especially data storage (cloud storage) and computing power, without direct active management by the user.
A Brief History of Cloud Computing
Who is the father of cloud computing technology? The answer to this trivia night question is American computer scientist J.C.R. Licklider. In the late 1960s, he envisioned a world where everyone would be connected with the ability to access specific programs and data regardless of where the access point was located. This revolutionary idea lead to the development of ARPANET (Advanced Research Projects Agency Network), widely known as the “predecessor of the Internet” and the first network to allow digital sources to be shared among computers that were not in the same physical location. Licklider was inducted into the Internet Hall of Fame in 2013.
The term "cloud computing" was coined in 1997 by University of Texas professor Ramnath Chellappa in a talk on the "new computing paradigm." Since then, developments in bandwidth, processing and open-source networking have made the cloud “as ordinary as the weather,” quipped one SEO blogger.
Evolution of Cloud Computing
So, what does this new and evolving computing paradigm look like? The most definitive model comes from the National Institute of Standards and Technology (NIST), a non-regulatory agency of the U.S. Department of Commerce whose mission is to promote innovation and industrial competitiveness.
The essential characteristics of the NIST’s cloud computing model are convenient, on-demand network access to a shared pool of computing resources (networks, servers, storage, applications and services) that can be rapidly deployed and released with minimal management effort or service provider interaction.
This model asserts that “being a cloud computing provider doesn’t mean just supplementing IT resources, it means providing strategic, core information technology.” The NIST classifies three types of cloud services and four deployment strategies to help organizations compare and determine the best way from them to use cloud computing.
Three service models:
- Software as a Service (SaaS) – This is basically a software distribution model in which a service provider hosts applications for customers and make them available via the internet so they don’t take up limited on-premises resources. Examples include DocuSign and Microsoft Office 365.
- Platform as a Service (PaaS) – This one can be confusing. Basically, it’s a service for developers to create and test apps without the complexities of maintaining the underlying infrastructure such as servers, storage and backup.
- Infrastructure as a Service (IaaS) – This is a business service model of cloud computing that delivers computing, networking and storage resources on-demand, over the internet, and allows users to scale and shrink their resources as needed while reducing the requirement for high, up-front capital expenditures or unnecessary “owned” infrastructure.
Note that these are very broad descriptions and there are many variations within each one. For example, with the IaaS model, the infrastructure is managed by a third party provider, but the administration of that infrastructure can be performed by the business entity or fully hosted and managed by the provider.
Four deployment models:
- Private cloud – This is a single-tenant environment, meaning the organization using it does not share resources with other users. The terms “private cloud” and “virtual private cloud” (VPC) are often used interchangeably. A VPC is a private cloud that uses a third-party cloud provider's infrastructure, while a private cloud – also referred to as an enterprise cloud – is implemented over an internal infrastructure.]
- Community Cloud – This cloud infrastructure is deployed for the exclusive use of a specific community of users from organizations that have common concerns. For instance, federal agencies that share similar requirements related to security levels, audit and privacy might use a community cloud infrastructure.
- Public Cloud – This cloud service provides a large virtual environment of stored and sharable files that can be accessed by people around the world. Examples include Amazon and Netflix.
- Hybrid Cloud – This model combines one or more public cloud providers with a private cloud platform designed for use by a single organization or private IT infrastructure. For instance, financial institutions typically process trade orders using a private cloud while running trade analytics and other business functions in a public cloud infrastructure.
7 Benefits of Fully Hosted and Managed Cloud Solution
With so many choices, it can be overwhelming to decide what to do. All cloud computing options are not created equal. Coaxis recommends a fully hosted and managed cloud solution that can provide a secure, reliable and remote alternative to on-site data centers and IT infrastructures, hosted by a third-party or external provider. Here are seven reasons why this cloud solution is superior to other alternatives.
- Security – Secure cloud hosting of software programs and data files greatly minimizes the threat of cybercrime. In addition, some cloud hosting providers also offer firms a secure portal for clients to connect and share information.
- Compliancy – The right cloud hosting service can eliminate the complexities of adhering to government and industry regulations by supporting Service Organization Controls (SOC 1 and SOC 2) and knowing the details and demands of other relevant regulatory compliances such as the Gramm Leach Bliley Act, Sarbanes Oxley Act, Bank Secrecy Act and Payment Card Industry Data Security.
- Business Continuity – Business disruptions come in many forms, from wild fires and hurricanes to pandemics and cyber-crimes. The impact of unprotected data loss or corruption can be costly and significant.
- Mobility – Cloud solutions provide an in-office desktop experience – including software, apps, files and permissions – that allows CPAs to securely perform remote accounting and tax services from any device that connects to the Internet.
- Cost & Efficiency – Maintaining an onsite server can divert both money and human resources away from other parts of a business that produce revenue growth. Cloud hosting reduces IT costs by curbing the demands of maintaining an IT infrastructure and eliminating the significant capital expenses for hardware upgrades.
- Scalability – A CPA firm’s workforce and IT requirements often fluctuate in size and seasons. A cloud hosting service offers network scalability that can be tailored to a business’s changing requirements. IT resources (hardware and software) and network users can be added or removed from the network without wasted investment or time to scale.
- Ease of Implementation – With the right provider, the transition from an in-house infrastructure to a fully managed cloud hosting service should be efficient and seamless. When the new system closely replicates the current one, workflow disruption and staff learning curves are minimal.
This type of fully managed cloud hosting service provider offers CPA firms solutions to meet today’s technology needs and adapt their business models for the future. These seven features are a good starting point for any firm to begin considering how to plan their resources and business strategies for migrating to a cloud-based IT infrastructure.
The Coaxis Solution
Coaxis is one such company. It provides CPA firms with a fully-hosted and managed network solution from its privately owned, single tenant data center in Tallahassee, Florida that is built, operated and maintained to the highest industry standards. The Coaxis team has extensive experience in supporting a broad range of tax and financial reporting software applications, and its services are compliant with GLBA, HIPAA HITECH, CJIS, and an Industry Audit SOC 2 Type 2- Unqualified Audit Opinion.
As an endorsed program of the FICPA, Coaxis offers special member pricing for its CPA program package. To learn more, call (850) 391-1022 or email [email protected].