Skip to main content

Accounting

Virtualization is a Good Business Decision, but Hosting in the Cloud Could be Even Better

Column: From the Trenches

From the July 2010 Issue

Virtualizing your business can save time and money, help your applications
run faster, make remote access easier, and be much safer in a business continuity/disaster
recovery situation. What is not to like?

Well, that would be the difficulty of finding a competent installer that understands
your applications and how to make them work. We continue to be appalled at the
number of moderately competent installers in the United States who portray themselves
as competent, and claim their way is the best way, only to take your money and
leave you with a poorly implemented system.

I’m going to try to make virtualization as simple to understand as I
can in this article, at the risk of not being 100 percent technically accurate.
To be technically accurate, you’d miss the understanding of the concept
as well as the capability from a management point of view masked in computer
jargon. This is a summary of the state of the art of virtualization, and how
you can capitalize on this technology to serve your clients better.

First, there are three main competitive products for Windows application servers
and workstations: VMWare ESX and Workstation, Xen Server and Desktop, and Microsoft
Hyper-V and AppV. These products all allow one or more instances of an operating
system to run on a single piece of hardware. For small businesses, this means
that you can use one or two hardware servers to replace the functionality of
five to eight servers without installing everything on a single server, which
is still a big no-no.

For example, you can have Exchange, SQL, Terminal Servers or Citrix, File and
Print, Web servers, QuickBooks 2010, QuickBooks 2009, QuickBooks 2008 and specialty
applications each on their own instance of a server. This protects all of the
other applications instead of mixing them all together in one or two servers
or buying six to nine servers as per this example.

Next, you can use virtualization for your desktop applications, as well. This
is not Terminal Services or Citrix, but a true replacement of the native install
of Windows and your other applications on a laptop or a desktop. This technology
is just beginning to work acceptably enough for me to recommend it to you, but
not quite. Where this works, it is phenomenal, driving IT costs down 30 to 75
percent, and increasing performance 25 to 33 percent. Updates to workstation
software are far simpler, since one master copy is updated and used by all.

The downsides for this approach include the need to use open licensing, the
need to have a hardware Storage Area Network (SAN) for reliability, the need
for software to control user settings (an example of this would be a product
like AppSense), and the biggest objection of all, having laptop users remember
to disconnect properly. Most of these issues have become smaller, easier and
less expensive over the last year. Both server and desktop virtualization package
all the complexities of installation into a single file or very few files, and
eliminate much of the hardware dependencies.

Conceptually, users don’t care what plumbing is required to run their
applications and do their work. They care that the products work consistently
and correctly. I agree. Applications have been written to run on mainframes,
then minicomputers, then microcomputers, and most recently on local area networks
and database servers. The complexities of implementation increased, while communication
costs decreased with speed increases, particularly over the Internet, and it
became cost effective to centralize applications again.

To centralize these applications, there are several strategies that can be
used. Consider the following: 1) Internet browser applications delivered as
Software as a Service (SaaS), 2) hosted applications which we originally called
Application Service Providers (ASP) and some now call SoSaaS (Same Old Software
delivered as a Service), and 3) virtualized servers, desktops or applications
hosted in secure data centers or in your own business.

All of these could be referred to as Cloud Computing, since the applications
typically are running over the Internet in remote data centers. Eventually,
we expect most computing to revert back to these data centers because the costs
will continue to drop, the ease of use will increase, and the reliability will
be higher.

Virtualized servers are relatively trivial to move to a hosting center today.
Security is generally greater, and the communication lines are usually faster
and redundant. Market pricing is just crossing over with the ROI of purchasing
equipment and installing it in your own business. Most businesses with 50 users
or more have concluded that virtualizing servers is cheaper than traditional
servers, and they are now in a position to move these virtualized servers to
data centers. Because of their investment in infrastructure like SANs, these
organizations are also ready to consider virtualizing their desktops in-house
or in the hosted data center.

For small businesses or accounting firms, virtualization software can be installed
at a low cost or for free, but the cost of SANs keep small businesses from implementing
the high-availability features of virtualization. If you choose to virtualize
without a SAN, the only real cost is additional memory for the servers and installation
labor of the virtual servers. Usually, you can reduce the number of servers
you have deployed or you can retire aging servers without replacing them.

The last firm I visited before writing this article had eight servers, and
I recommended they virtualize on three servers and retire all of the old servers.
This should result in an increase in speed and improvement in reliability based
on our experience in other firms. New hardware I’m testing now could allow
an entire firm to be put in a highly redundant, “office in a box.”
Hopefully, there will be more to tell you about on this topic later in the year.

At the risk of generalizing inaccurately for your situation, I can’t
think of a situation where virtualization doesn’t make sense. Said positively,
server virtualization is good for everyone today, and desktop virtualization
will be good for everyone very soon. Whether you virtualize in-house or in the
cloud, virtualization is in your future. When it works right, you won’t
know and you won’t care except that your applications run better, faster
and cheaper, so you provide better client service and have more free time, too.

 

See inside July 2010

AccountantsWorld — CyberCabinet

3333 characters 888-999-1366 www.accountantsworld.com The AccountantsWorld (AW) CyberCabinet application is an integral component in the AW strategy to provide a complete accounting practice portal of online applications. Core Functionality The AccountantsWorld lineup of applications includes payroll (Payroll Relief), client accounting (Accounting Relief), practice management (Power Practice) and more. CyberCabinet is the document storage application that […]

Previous

Workflow is King

Mobile professional payroll applications, online document storage, SaaS-based account-ing and practice management tools, and an in-practice knowledge sharing system were among the technologies honored at The CPA Technology Advisor’s 7th Annual Tax and Accounting Technology Innovation Awards.

Next