Are you a victim of ‘SaaS washing’ when it comes to cloud accounting software?

If you’ve ever looked into the subject of finance software, you’re probably aware of the difference between “on premise” and “cloud” technology.

One stores the data on your premises, with all the traditional risks of theft and damage, not to mention much more limited functionality. The other involves the provider taking responsibility for looking after everything remotely. The latter kind also goes by the name SaaS (software as a service).

But not all cloud software is the same – a problem which recently led Christian Nentwich, Chief Executive Officer of the data software business Duco to coin the term “SaaS washing”.

SaaS washing and fake cloud

SaaS washing is a memorable term for a phenomenon that’s more often been called “fake cloud” or “hosted cloud”.

Fake cloud describes an on premise system that has been adapted to work in the cloud, as opposed to one that was designed with the cloud in mind.

Why should you care, as long as your data is stored away from your office? Because if your software is the product of SaaS washing, you’re likely to be overpaying for a system that won’t function as well as true cloud software can.

What’s the difference between true and fake cloud?

Even people experienced in using finance systems can find it hard to know the distinction between true and fake cloud. When iplicit surveyed accountants at the AccountingWEB Live Expo 2021, only 18% of those polled could tell the difference.

However, the key differences between the two kinds of system are these:

• Fake cloud stores your data off your premises but it’s hosted in its own segregated area on the vendor’s servers, with more servers added as more customers join. With real cloud, all customers’ data is distributed across a shared infrastructure, ensuring security, flexibility and scalability.
• With fake cloud, you are likely to be paying a hosting provider for those servers – and it’s more expensive because the infrastructure is not shared with other customers. With true cloud, everything will be included in your subscription.
• With the fake variety, you have your own segregated space in the cloud, which means the cost of upgrading is higher – and that normally means fewer upgrades.
• Adapting a fake cloud product to your particular needs will mean ever more laborious customisation of your individual system, making it increasingly complicated and unwieldy.
• Integration with other true cloud applications is difficult or impossible with fake cloud, as is any customisation required. True cloud software can be easily integrated with a host of other business systems and set up as the user needs it.
• True cloud is ideal for hybrid working, allowing as many users as necessary to log on from any device, wherever there is Wi-fi or a data signal. Access to a fake cloud platform tends to be much slower and more unreliable, with the risk of the system crashing when it is being overloaded by users.

Why is fake cloud still a thing?

The benefits of true cloud software are so clear that you might wonder why anyone is selling any other kind.

But for a software vendor, it can make sense to adapt an existing, on premise product to work in the cloud – especially if the customer knows they are being held back by their on premise system and the provider has little else to offer them.

Adapting an existing on premise product so it works on a hosted basis – or, as one iplicit customer put it, “lipsticking” it to look like a cloud product – can sometimes prevent a client leaving for a newer competitor.

But the customer is not well served if they are persuaded to pass up the benefits of software as a service in favour of the clunky compromise that Christian Nentwich calls “software on a server”.

• Find out about iplicit’s true cloud software by taking a quick tour or getting in touch for a demonstration.