David Geilhufe, NetSuite, Inc.

Simply put, the cloud by its very nature offers you better, more effective software solutions while saving your organization time, money and effort.

Cloud solutions increase the probability of success and reduce the costs of failure. They support and extend the larger trends that are shaping both charity and business operations -- whether those trends are flex time, impact measurement, real time data, or open APIs -- and allow you to gain the benefits of those larger trends without really having to think about it much.

My own organization (a cloud vendor) looked at our core marketing messages and settled on "where business is going." You'll notice that this marketing message presents the cloud as a fait accompli, and that is increasingly true.

The cloud refers to a number of different technical components -- from applications to databases to server virtualization to web services. If you want to geek out on that stuff, feel free to give me a call, but most folks care about what they can do with cloud solutions: what cloud solutions enable.

Cloud Basics

Every cloud solution has the following basic components:

1. The magic happens over the Internet. Generally, this means you access the solution through a web browser and are never aware of any of the computers that are behind the scenes.
2. Pay as you go. Most payments are handled by subscription, by taking a piece of financial transactions and/or charging based on usage.
3. Lower Costs. The economics of the cloud mean that the marginal cost of each new user/customer is very low. This enables free services (Google Docs) and cloud vendors can offer product donations as part of their corporate citizenship programs (NetSuite.org).
4. Reliance on third party(ies). Someone else handles making the software go.

The Big Changes the Cloud Brings Changes Culture.

Web browser based applications free employees, board members, volunteers, and other constituents from the shackles of a specific computer, fundamentally changing how an organization can operate:

• An employee can travel throughout the world without a computer and still get their work done by visiting an Internet cafe.
• A board member can log in and see, in real time and read only, exactly how much money was raised this month, without messing anything up.
• A volunteer in Iowa can enter bills into your accounting system for the 30 days they are available until the next volunteer in Florida takes over.
• An organization can save huge amounts of money by outsourcing their accounting functions without losing immediate access and control over their financial software.

Simultaneously Centralizes and Fragments. When you use a major cloud platform (NetSuite, Salesforce, Google Apps, etc.) they provide tools and plug-ins to help you access functionality that is not included in the main platform without requiring integration work of data exchange. This means all your data can be accessible and linked together in one place without you having to lift a finger.

At the same time, the cloud encourages the development of small stand alone tools that need to be knitted together into a solution. Visit the Google Apps marketplace for a good view of hundreds of applications doing a myriad of things from email to accounting to project management. This fragmentation is a boon when you are looking for a niche solution and enables charities to both develop and distribute solutions that meet unique charity business needs.

Increases Pace and Decreases Cost of Change. Cloud platforms implement "clicks not code" customization, allowing relatively unskilled users to change existing workflows and adopt new ones on the fly. Need to change the way you engage donors or implement A/B testing? Just do it. These capabilities, combined with the wealth of tools that can be plugged into a workflow, mean that staff can do in an afternoon what used to require and RFP and a paid consultant.

The Next Generation of Charity Apps are in the Cloud. The dynamics of innovation and technology mean that the next generation of charity applications are being built in the cloud. Whether those applications are impact measurement, social media, new fundraising solutions, they'll be built with cloud technologies and/or on cloud platforms.

The "Little" Benefits the Cloud Brings A vast array of little benefits are driving these big shifts. A few include:

1. Faster to get started and deploy, often allowing you to try them out before making a financial commitment. Sure you might have to pick among four different project management tools, but you can evaluate them all in an afternoon without having to get on the phone with a salesperson.
2. More modern and of a higher quality than comparable on-premise solutions. It is hard to build open APIs into software created before the invention of Open APIs.
3. Cheaper Start-Up Costs. It used to be that you needed to buy servers and systems administrator first, just to be able to buy powerful software solutions. The cloud means the infrastructure and start up costs of software are lower than ever before. Complex business processes still require a consultant, but point solutions like blogging or word processing can be up and running in seconds.
4. Power. Cloud platforms, as they start serving large enterprises, are implementing very powerful functionality. That functionality is being harnessed by partners to serve charity needs.

A Little Dose of Caution

The cloud is the technology direction where everyone is heading and virtually everyone will end up. It is so compelling that cloud technology adoption rates are unbelievably rapid -- in a few years Google has drawn 25 million active users and 2 million businesses to cloud solutions.

But we are still at the beginning of the cloud.

In the charity sector's 15 year technology adoption cycle, we're still years away from the cloud being a solid solution for everything charities do from core functions (CRM, fundraising, accounting) to specialized ones (case management, grants management, etc.). When you look for technology, look to the cloud first, but don't be surprised if your perfect solution or unique business process is still a few years away.

Technology, however, is never enough. There is an ecosystem of intermediaries, vendors, consultants, failed implementations, word of mouth and more required for a nonprofit to actually realize increased effectiveness and efficiency. Because cloud adoption is moving at such a torrid pace, that ecosystem is having trouble keeping up with the tools, meaning that though the cloud may be a no-brainer, nonprofits must be careful to select the competent vendors, applications, consultants, training, and deployment models.