Throughout the first 30 years of modern digital computing, one computational model prevailed. This was the concept of the mainframe computer, which centrally performed all major computational tasks, while being accessed from terminals or client machines. This was the prevailing way in which organizational computing systems for business and government were set up. But all of this started to change in the early-1980s, with the advent of the personal computer.
Throughout the 80s, personal computers quickly gained enough power to perform most computational tasks completely on their own, eventually being able to run applications of the size that could have once only been run on mainframes. By the late-90s, the personal computing model, where most computation was performed directly on client machines, even on organizational networks, was the dominant model.
But in the early-2000s, the winds of technological change began blowing back towards the computer’s roots and mainframe computing. This was the result of dramatic increases in internet connectivity speeds, because of such infrastructural improvements as widespread fiber optic cables. Developers began realizing that the mainframe computing model of old could be updated, except this time on a scale never before imagined. This marked the birth of cloud computing, which quickly began growing at staggering rates.
Why accounting in the cloud is displacing the traditional computing model
What was quickly realized is that cloud computing resources can be precisely tweaked to maximize efficiency and productivity always. With efficiency and productivity gains on the order of 10 times what an organization using its own computing resources could achieve, the cloud was able to immediately save businesses massive amounts in capital outlays and ongoing expenses, while streamlining IT operations and providing for a level of scalability that had never been imagined.
For small to medium businesses that need to implement accounting solutions, going with cloud accounting can completely obviate the need for internal networking, capital expenditures on rapidly depreciating computational resources and the growing pains associated with rapid growth, as well as the excess capacity left during contractions. Whereas implementing an in-house accounting system can easily run a typical small to mid-sized business high-five to low-six figures, a cloud accounting solution may cost as little as $100 per month. This can quickly become a no-brainer. The efficiency gains and savings offered by cloud accounting are so vast that in-house computing simply can’t compete.
Another important aspect of cloud accounting is the fact that it can seamlessly accommodate growth. In times past, growing too quickly could result in a company’s accounting operations becoming crippled, as they struggled to scale up, hiring more IT staff, trying to quickly implement ad-hoc networking solutions and spending massive amounts of money on new computer equipment. With cloud accounting, these scaling issues are virtually non-existent. The cloud can handle 100 clients with exactly the same ease as it can handle a single client.
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