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Indirect Tax

What Does the Cloud Mean and Why You Should Care

Adam Schaffner  

Adam Schaffner  

Cloud.  You’ve heard it mentioned many times and not just related to the weather.  When it comes to software and the internet, what does the cloud mean?  Simply put, the cloud is another way of saying World Wide Web, a.k.a. the internet, but with one slight difference: it implies using a software service.  Using a software service replaces the need for you to install software and/or hardware.  Cloud computing is when you utilize software or services through an internet connection, for which the computing occurs in a different location but is delivered to you through the internet. An example of this is Microsoft Office. Traditionally you could only buy and install Microsoft Office, e.g. Word, Excel, PowerPoint, etc. Now Microsoft has created Office Online, which like Google Docs, allows you to create office documents online with only a web browser.

Wait a minute…so when I go to a website, say Reuters.com to look at the latest news, am I using cloud computing? No.  In this case you are just surfing the web.  As mentioned above, if you are using Microsoft Office Online or Google Docs, then you are using a cloud application. Another example, when you use Thomson Reuters ONESOURCE™ applications on the ONESOURCE platform to calculate tax or prepare tax returns, then you are using tax software “in the cloud.”

So how do things get in the cloud?  Just as you would imagine, a company purchases or leases the necessary hardware to run their software for many users.  They will host it themselves or pay for it to be hosted so that it can be accessed by their customers through the internet.  This company will then need to monitor their software and hardware to make sure it is secure and responsive.  They will upgrade, patch and maintain these systems.  You as a customer don’t have to download, install, and run the software on your computer, rather you can access it through the internet. For example, Microsoft Office was traditionally a local desktop installation and computing operation, but today MS 365 has the same software applications, but is now accessed from Microsoft’s cloud where they keep the software patched and up-to-date.

But how do you know your data is safe or if the cloud software is going to be reliable?  There are professional standards and accreditations from internationally recognized organizations that companies can comply with to help customers feel safe and comfortable using their cloud service.  The most common standard is the Standards for Attestation Engagements (SSAE) No. 16 or SSAE 16 where a company’s service controls are audited for their policies and procedures.  The International Organization for Standardization (ISO) has a security standard called the ISO 27001 that ensures a company is following best practices for all types of security, from network scans and firewalls to physical access being monitored by cameras and controlled by biometric scanners.

Why would companies use cloud solutions? As the internet has continued to get faster and faster, it is easier and more economical for a business to use cloud software.  Companies and customers not only save money because they don’t have to download and install software, there are no concerns over upgrades and patches.  They also don’t have to incur the high cost of an original software purchase. With cloud solutions you can pay for what you need and use with minimal upfront cost.

So now that the cloud is less mysterious, you can better determine how cloud software can benefit your company.  Also, did you know that you ONESOURCE Indirect Tax works in the cloud to calculate tax in real-time for many large and small companies?  It is built on the same patented global tax engine that the Fortune 500 companies have relied on for their sales, use, and value-added tax calculations for over a decade.  Backed by Thomson Reuters’ decades of experience hosting applications; SSAE 16, ISO 27001, ISO 9001, and GLBA certified compliant hosting; and powered by the best global tax engine and integrations on the market, ONESOURCE Indirect Tax is consistently chosen for its superior tax automation, implementation team, and affordability.

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