Larry Ellison, the CEO of Oracle, dismisses cloud computing as merely the latest fashion in the computer industry. I suppose he also dismisses that more than one-in-five IT decision makers have deployed over half of their total applications to the cloud, according to the Cisco Global Cloud Networking Survey. Regardless of any debate, cloud computing adoption rates are on the rise. According CDW LLC’s State of the Cloud Report, 39% of organizations either already utilize cloud computing solutions or are currently implementing them. This number is up from 28%.

Maybe somewhat surprisingly, cloud computing is a very attractive option for business accounting software. Accounting software takes up a significant amount of hard drive space, especially for small and medium-sized businesses. Cloud computing solves this problem by putting the majority of files and data on a separate server. This frees up hard drive space for individual desktop computers and saves money that might have been spent on additional storage equipment.

Several accounting software companies have already adopted cloud solutions. QuickBooks Online offers cloud-based accounting that allows users to track expenses, accept credit cards directly, activate payroll, and access data on mobile devices. Additionally, since QuickBooks Online went global in late, some 130 countries are now utilizing the service.

QuickBooks’ expansion highlights another important benefit of cloud computing: today’s workforce is increasingly mobile and globally dispersed. The Citrix Workplace of the Future survey states 24% of global companies allow employees to work from anywhere. Cloud computing facilitates this workplace shift by storing information in a centralized location that can be accessed from anywhere, at any time, and on a variety of devices.

So, why, like Ellison, are some business leaders still hesitant to embrace cloud computing? Some insist that cloud computing is not cost-efficient. It is true that although cloud computing services reduce up-front infrastructure costs, they require monthly payments for data storage and updates. Therefore, cloud computing may prove more expensive in the long run. Additionally, some cloud computing applications do not have as many features as their desktop counterparts, including QuickBooks Online.

But while cost is a factor, concerns about cloud computing overwhelmingly center on data reliability and security. Cloud computing is completely reliant on the internet, so users lose access to data when servers go down. This is really risky with accounting software, as these applications are critical to a business’ day-to-day operations. Server outages and network connection problems are an unavoidable fact of all internet-based solutions, and no cloud computing service provider can guarantee around-the-clock access.

The other major concern is data security. Many businesses are worried about entrusting sensitive information to cloud-based accounting solutions, and with good reason. While data stored on the cloud is not affected by hardware crashes or software problems, it is vulnerable to server hacking.

With Amazon announcing new cloud storage capabilities and web services- selling infrastructure space to those who need the room at the office -  and Rackspace ramping up their cloud storage support services, the competition is fiercer than ever. Only time will tell if the payoff for companies like Amazon and their clients alike will find the efforts worth it.

Not everyone thinks that cloud computing poses a security problem. Vivek Kundra, former federal CIO of the United States, points out that large computing companies often have access to more security resources than small businesses using in-house servers. As he puts it, “companies like Google and Amazon can attract and retain cyber-security personnel of a higher quality than many governmental agencies.”

Ultimately, despite their possible disadvantages, cloud-based solutions are the future. The business world, and society as a whole, is moving toward a culture of pervasive computing, in which all information will be immediately accessible from anywhere at anytime. This means that cloud computing is going to become a fact of life, for business accounting software and for everything else. So, are you on board?

About The Author: Curt Finch is the CEO of Journyx. Journyx strives to be relentlessly creative and to build tools that help you spend your time on things that matter. After all, time is all we have. Founded Journyx offers customers two solutions to reach the highest levels of profitability: Journyx – project, time and expense tracking software – and Journyx PX – resource management software that provides work and financial forecasting for a complete picture of project and budget status, employee time and availability. Connect with Curt on Google+.

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