Hosted vs. cloud-native: Separating fact from fiction

A hotly debated topic in the accounting profession is the difference between hosted and cloud-native software. Which scenario works best for your firm? I want to take this opportunity to debunk a few myths.

Myth: You can work anywhere with hosted or cloud-native software.

Truth: Only cloud-native software lets you truly work from anywhere, logging in from any device. Hosted software ties you to devices with the software downloaded ahead of time, which takes planning and can be inconvenient.

Myth: Hosting lets all users access the same data to collaborate.

Truth: Scalability gets complicated fast. Each user needs a separate hosting seat, usually at added cost. Once a firm has paid for every piece of software needed to collaborate and support its workflow via hosting, the total often exceeds what cloud-native software would have cost.

Myth: Desktop hosting integrates just as seamlessly as cloud-native.

Truth: Desktop plus hosting can integrate, but hosting multiple programs together gets complex and expensive fast, with separate licenses required for each one. These integrations often function more like data imports than true data integrations. Cloud-native software, by contrast, connects more seamlessly with other cloud-based tools, giving firms access to the latest technology as it evolves.

Where hosted and cloud-native overlap

Different as they are, both models share some real advantages worth weighing as you choose the right fit for your firm:

IT updates and improvements can roll out immediately, without pulling staff time or expertise away from other work. Cloud-native goes a step further with no installation at all, running entirely in the browser, which frees up resources, cuts IT costs, and supports true collaboration and business continuity.

Security is another shared strength. Data and programs typically live on distributed servers with multiple layers of protection built to strict security standards, taking much of the burden off individual firms to safeguard their own and their clients’ data.

Editor’s note: This article was originally published on June 5, 2023, and updated with new content on March 11, 2026.