QuickBooks Hosted on an ASP – Why it Makes Sense

However, even if firms have all that figured out, they are most likely providing
less security for their data than companies who switch to some online solution.
Also, although the offline firms may be able to produce good results for the
next five years or so, I predict most of us will, in the near future, be using
some type of online solution for nearly everything surrounding accounting and
business management. For more on this trend, see my August 2008 column (Taking
Your Practice Online) at www.CPATechAdvisor.com/go/2023
and the October 2007 column (Software as a Service – The Future for Accountants,
Bookkeepers, and Clients) at www.CPATechAdvisor.com/go/1760.

What is an ASP?
To lay the framework of our discussion, let me first define some terminology
and help you differentiate the buzzwords you keep hearing in the online world.

The term ASP refers to a category of companies who provide access to computers
(servers and desktops) “in the sky” that run a variety of Windows
software for customers who access those computers via the Internet. Applications
available on ASPs include MS Office, QuickBooks, QuickBooks add-ons, and other
software by customer request.

ASP services ensure that the software and hardware is managed, backed up and
always available via the Internet.

What is SaaS?
Software as a Service (SaaS) is another term you’re hearing a lot about,
and although ASPs provide services that include software, there is a slight
differentiation between ASPs and SaaS vendors.

ASPs provide:

• Desktop applications installed and managed on the ASP’s computers.
• Hosted software is typically purchased as a desktop application, but
  then hosted by the ASP. In a sense, you “rent” access, but you
  typically purchase the software that is hosted. But the term rent is used
  loosely here.
• Hosted applications (and the data that goes with them) can often be moved
  to your local computer(s) to run locally if you decide to stop using the
  ASP.

SaaS vendors provide:

• Usually Web-native applications running on the service provider’s
  computers.
• The software license is part of the service. Think of it as “renting”
  the software along with the service.
• You access the application via the Internet, usually using a browser.
• The SaaS application cannot be run on your desktop computers, because
  the software license is not available other than with the service.

A Brief history of QuickBooks Hosting
Intuit has been nearly silent on the issue of hosted QuickBooks for years. The
legalese in the QuickBooks software license agreement purportedly prohibits
hosting, but there are probably over 100 companies who are and have been hosting
the software since the late 90s. In the past, if you called Intuit support and
said you’re using a QuickBooks hosted by an ASP, they would tell you that
you were breaking your license agreement, and that they could not support you.

Of course, there were probably several thousand users with that situation,
so it really became one of those stand-offs between users and ASPs on the one
side, and Intuit’s license agreement on the other hand.

Because of this legal ambiguity and lack of licensing enforcement from Intuit,
many of us in the consulting and accounting profession just steered clear of
using and/or recommending hosted QuickBooks to our clients. Most of us saw the
compelling benefits, but we were concerned that without clarification on the
licensing from Intuit, we might somehow end up as unwitting participants in
the violation of Intuit’s software license agreements. That was a risk
many of us just didn’t want to take.

A Clearer Roadmap for the Future
The good news is that now we have a clearer roadmap for using QuickBooks on
an ASP. There are two hosting companies I am aware of who have jumped through
the technical and legal hoops to be considered worthy of providing the level
of service that Intuit requires for their QuickBooks customers. These Intuit-authorized,
QuickBooks hosting companies are InsynQ (www.cpaasp.com)
and Right Networks (www.rightnetworks.com).
Of course there may be other authorized providers in the future.

Ok, so back to the question of why hosted QuickBooks makes sense. Even though
I predict that ultimately the SaaS products will be all we talk about, in the
short-to-medium term, I think the ASP has some compelling benefits for accounting
firms and their clients. There are several reasons why I think the ASP solution
is compelling.

Probably the first and most compelling reason is that PEOPLE LOVE QuickBooks.
They’ve built their internal procedures around the product; they’ve
trained their staff how to use it; they can get top quality support for it from
a number of sources; and nearly every accounting firm in the country has someone
who can help set it up, troubleshoot problems, and even prescribe workarounds
when a particular feature isn’t quite right for the client.

The second reason is that QuickBooks has literally hundreds of add-ons that
directly integrate with it. Many of those add-ons are now part of the internal
systems of QuickBooks users everywhere, and to switch away from them would be
a huge undertaking. So the add-ons are now just about as entrenched as QuickBooks
itself. And the good news is that most of the add-ons can also be hosted by
a QuickBooks ASP.

The third reason is that ASPs help you go online quickly, without switching
software, and you can always switch back if you don’t like it. So your
data remains YOUR data. The risk of switching to something new is mitigated
by the fact that you can always go back if it doesn’t work out.

It’s worth asking why one would use QuickBooks on an ASP as opposed to
switching to a web-native SaaS accounting product such as QuickBooks Online
Edition (http://oe.QuickBooks.com),
NetSuite (www.Netsuite.com),
Intacct (www.Intacct.com),
or any of the five or so other options. That’s a great question, and in
my opinion, it’s only a question of when that switch will be appropriate
for your business.

In the short term, hosted QuickBooks allows the masses to keep what they have
while also realizing the benefits of online, anytime, anywhere access, plus
the ease of sharing data between accountant and clients.