Five Tech Battles (in Accounting) for Businesses to Watch in 2014

Dave McClure for CPA Practice Advisor writes: One of the more interesting aspects of blogging, as opposed to filing hard news stories each day, is that I have a little more time to watch battle lines being drawn.  And if the lines being drawn now are any indication, 2014 should be a fun year to watch as companies and politicians enter the fight cage.

Here are the top five battles that will play out this year:

1. The Voice Command War.  As the holidays approached, Nuance cut the price and bundled its flagship Dragon Naturally Speaking 12.  It was hard to watch television without seeing the infomercials and ads for this product.  But don’t be fooled.  Both Microsoft and Google have stuck their flags in this territory, and their entries are equally capable.  Google is expanding its Voice Search and Voice commands for email and other operations.  Microsoft is fighting back with its own Speech Recognition program that is capable enough that I am using it to dictate this paragraph.  It is available in both Windows 7 and Windows 8, but still has some quirks.  With Nuance trading on NASDAQ at about $15 a share, I will repeat my prediction that one of the two dinosaurs will buy them out.
    
2. QuickBooks versus Xero.  The problem with being the king is that there is always someone waiting in the wings to topple your crown.  In this case, a fairly mature product called Xero that is pressing a serious challenge to Intuit.  Xero is not going to win this battle anytime soon, but they do have a growing voice in small business accounting, and may be enough to topple other programs like Sage 50.  This is more competition in the small business accounting market than we have seen in years.  I won’t predict a winner, but I do like seeing the marketplace shaken up.
    
3. The wars over cloud storage.  It’s hard to take a step in the tech or accounting industries without tripping over a cloud storage solution.  On the consumer side, we have Microsoft, Google, Verizon, AT&T and a dozen others offering 5 Gb of storage for free.  Not that you can actually do much with 5 Gb – you’ll have to pay for more, and allow the company to steal your data for their own purposes.  On the professional side there are accounting software firms that are bundling storage with their products and portals, in addition to the plethora of others trying to shoehorn into the industry.  All of these products suffer from two major flaws.  None of them offer a decent, automated backup system, which is what most firms desperately need.  And they do not have a business model that permits them to survive the competition without charging an arm and a leg.
   
   And in the background, quietly chugging away for the past four years, is Microsoft Azure – a cloud computing platform that hosts virtual machines, websites and more. It provides both platform as a service (PaaS) and infrastructure as a service (IaaS) services and supports many different programming languages, tools and frameworks, including both Microsoft-specific and third-party software and systems.  Developers are flocking there…
4. Big Data Versus Small Clients.  Almost everywhere you turn in accounting today, you hear the drumbeat of “Big Data.”  It’s the processing of data sets collected from everywhere.  Data sets that are so large they require thousands of servers running in tandem just to process a single query.  Data that is so big, so wonderful, and so stunningly critical that it is utterly meaningless to most accounting firms because it can’t be applied to the microcosm of new business development.  Who care what the global trends in accounting are if you can’t us that information to draw in new clients?  Like so many of the business management buzz terms we’ve endured in the past, “Big Data” will prove to be too big, without enough usable data.  Oh, my…did I just say the emperor isn’t wearing any clothes?
    
5. The Elections of 2014.  Pay attention to this one, because it will directly affect the accounting industry.  Three things to keep in the back of your mind as you emerge from tax season.  First, we have no idea how the Affordable Care Act will affect tax practices because much of that will depend on the outcome of the elections.  Second, if you believe that the appointment of Senator Max Baucus to be ambassador to China will kill any chance of tax reform in 2014, think again.  Sen. Ron Wyden of Oregon is waiting to assume chairmanship of the Senate Finance Committee, and he’s got his own ideas about tax reform.  And then there is the whole question of registration of tax preparers.  As I write this, New York has become the fourth state to require licensing and regulation of independent tax preparers.  This will be a major issue as the year unfolds.

Watching the accounting industry is entertaining, but at the end of the day we have to provide our readers with real information about the trends, techniques and technologies that can make them more productive and drive new business development.

These five battles will directly affect firms small and large.  More as these situations develop.