---
title: "VAT: How To Explain The Value of The Cloud To Business People"
date: 2010-04-15T17:26:46Z
modified: 2010-04-15T17:26:46Z
permalink: "https://redmonk.com/jgovernor/vat-how-to-explain-the-value-of-the-cloud-to-business-people/"
type: post
status: publish
excerpt: ""
wpid: 2671
categories:
  - Cloud Computing
tags:
  - Cloud Computing
  - BusinessCloud9
  - cloud
  - NetSuite
  - Oracle
  - SaaS
  - tax
  - VAT
timestamp: 2010-04-15T17:26:46Z
---

[![Weekly shopping receipt](http://farm4.static.flickr.com/3294/2623977987_8937dd3bc7.jpg)

](http://www.flickr.com/photos/hendry/2623977987/ "Weekly shopping receipt by Kai Hendry, on Flickr")

A few months back I attended [BusinessCloud9](http://www.businesscloud9.com/), a really excellent event run by my old mate [Stuart Lauchlan](http://www.darksome.net/), looking at cloud-based business applications. It was the least dorky Cloud show I have been to by some margin- the room was chockful of suits, _with budgets_.

Anyway – one story really stuck with me… because it utterly nails the benefits of the Cloud model for business applications.

[Zack Nelson, CEO of Netsuite](http://www.netsuite.com/portal/management.shtml) summed up the value of the model: Value Added Tax or VAT.

During the teeth of the financial crisis the UK government cut VAT by 2.5% to stimulate businesses. For companies running traditional on premise business applications this was a total nightmare. Didn’t matter whether you were a small business running Sage or a FTSE100 firm running Oracle Financials this was a painful change to make. Retailers were in a tough spot. How were they supposed to make all their systems compliant with the rule change.

Unless, that is, they were using hosted Software as a Service (Saas) applications. With the cloud, a change like this can be rolled out to every customer overnight- as easily as Google rolling out a new service.

So next time someone asks what’s the Business Value of cloud you can just say read my lips – Some. New. Taxes.