Challenges to the QuickBooks Accountant “self-hosting”model: There’s more to hosting than just having a server.

Sure, any good IT guy can build you a network.  And any quality IT services company can offer to manage your network and systems for you.  But, can just any IT company help make your business a QuickBooks hosting company for other businesses?  Maybe, maybe not.   I’ve always said that there is a fine art to delivering quality application services (especially involving QuickBooks) to a largely non-technical audience, and if the details aren’t covered up front, they will end up causing you a great deal of pain later.

Almost every IT consultant I’ve worked with believes that they have what it takes to help accountants create an in-house capability to host QuickBooks and provide remote access for client businesses.  While there is likely no argument that the consultant understands how to set up a network for a single organization, the rules change a bit when you begin talking about having many different businesses – most of them not related in any way – sharing systems, software, and data storage facilities.  This is often referred to as “multitenant” architecture, and QuickBooks, like many other desktop applications, was never designed for this type of implementation.  For these and other reasons, it takes quite a bit of technical understanding as well as recognition of the necessary controlling elements in the business model to create a hosted delivery that can actually work well, and deliver the security and confidentiality of data required and an online “experience” your clients will enjoy.

While many of the issues to be addressed are technical in nature, a lot of them also speak to the details of the business model and exactly what services are being offered.  Decisions must be made in terms of what applications to support, how users will access the applications, how users and data will be organized, and how the entire system will be supported, managed and maintained over time.  Experience has taught us that the business that expects their costs to be largely experienced with  initial equipment purchases and implementations will be unhappily surprised by the investments in time and materials required to create the client hosting environment, and then to support users and maintain systems post-launch.

The key is to not minimize the needs of the client, and to fully recognize and address the issues that the client will face when working from your environment.  Without the relevant experience to know what these challenges are and how to overcome them, the firm may find themselves at a significant operational disadvantage.  The result is that they are unable to fully meet the client demands, and could possibly lose the entire IT investment because of an inability to reasonably compete with commercial hosting offerings.

If your company is looking to offer QuickBooks hosting services to your clients, contact our consulting team today to get the information you need to make the best, most informed decisions possible.  After all, an unsatisfactory online experience could damage the trust and working relationship with the client, and that just isn’t worth the risk.

QBC

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QuickBooks Hosting Program and Large Accounting Firms – is there a fit?

The Intuit QuickBooks Hosting program was designed to create a consistent operating and reporting framework for providers offering application hosting services for QuickBooks desktop applications.  This framework addresses a number of elements of the service model, including but not limited to essential security, system architecture, information privacy, and software licensing.  While the hosting program includes options for commercial providers and “self-hosts”, this article will focus on the market segment not effectively addressed by the program: large firms where several hundred client users may be involved.

According to the Intuit website, the Intuit self-hosting program is for businesses with an existing professional relationship with Intuit, either as a Certified QuickBooks ProAdvisor or as a Certified Intuit Solution Provider.  These providers may, under this program, be eligible to offer application hosting of QuickBooks software and associated data management services to customers to whom the professional is also providing bookkeeping or accounting services.

The key element in the QuickBooks self-hosting program, the element which makes the program not work for certain larger firms, is the limitation on the number of clients the provider is allowed to provide hosting services to.  The program cites the limit of two hundred (200) clients, or client businesses, with a limitation on the total number of client users at four hundred (400).  For most firms, this limitation is not a barrier to participation in the program, as they have fewer than two hundred businesses in their client base which would utilize hosted QuickBooks services.  For other firms, however, this limitation puts them at a disadvantage, forcing them to either accredit as a commercial host under the program (an expensive and time-consuming effort, and an effort not entirely appropriate for many accounting firms), or purchase services through an existing commercial host.

Partnering with and purchasing through a commercial host is probably the right answer, but at face value, the cost seems pretty high.  Once a firm racks up a bill of $10K per month to service 250 client businesses, it feels like a lot of money.  In the scheme of things, that per-client cost is likely negligible in terms of the efficiency savings and access to additional work, but the first glance is the one that sticks with people.

The unfortunate reality is that, with the limitations on the number of clients a firm can provide hosting for balanced against the costs of working with a commercial provider, many larger firms simply elect not to participate in any of the programs.  At the moment, there is not a visible enforcement effort on the part of Intuit to make any providers of QuickBooks hosting “come clean” and join the programs, so a number of firms are simply continuing to do what they’ve always done – which sometimes includes walking a fine line in terms of license compliance.  But I believe there is risk in that approach, and professional firms should investigate all of their options.  While visible enforcement may not be there today, those working in this service area know that a storm is brewing.  Particularly with Intuit now offering their label on hosted QuickBooks Enterprise (delivered by a 3rd party provider and offered as a direct competitor to the ISP channel and to the hosting programs, but that’s another story), we can all bet that enforcement will come eventually.  With no enforcement, Intuit reduces the value of their own offerings.  Rather, I see the eventual enforcement of the program participation and rules as being a key to Intuit’s success with the program long term.  And, there’s too much money at stake and far too many folks still – uh – leveraging licensing (leveraging is a much nicer way to say “stealing”, don’t you think?).

So, with the costs and complexities of the commercial program being a barrier to professional service firms (either with participating in the program, or purchasing through a program participant), and with the limitations on the self-host program not meeting the needs of the larger firms… how is the large firm going to address the needs of those QuickBooks-using clients?

Unfortunately, I don’t have the perfect answer here.  I wish I did, but I’m not making the rules, Intuit is.  I think it’s important to play by the rules, even if you have to find a way to make them work for your business.  Sometimes that’s where the real innovation comes in.

So – rather than trying to find a way to make the current business model fit into the box that Intuit has built, maybe it’s time to take a slightly different approach – one that’s out of the box.  After all, with the popularity of the cloud and all the good reasons why businesses should “focus on their core competencies and outsource those that are non-core”, it may be time to rethink your strategy when positioning those QuickBooks-using clients.  Maybe being the IT and accounting service provider is not the right answer.  Maybe, just maybe, it’s time to separate the two, and simply let the client make the choice.  Electing to not use the suggested platform of the firm could result in higher accounting fees or rates..why not?  You lose efficiency when you work with clients who demand offline, paper, manual interaction.  Maybe the fees should reflect that reality.  You’re giving the client the choice, right?  It seems that they will end up paying one way or the other… either paying for the hosting service which enables an efficient working relationship with the accountant, or paying higher fees because of the extra time and effort it takes to get, manage, and do the work.

Consider, for example, why the client uses your services.  Accounting is not their core competency, and it’s not what their business is about – but it’s necessary.  So, they outsource that part of their work to a professional.  This allows the business owner to focus on their business, and not on bookkeeping and/or accounting.  The same philosophy is true with respect to technology.  Most businesses aren’t in the IT business, so the consideration to outsource IT management and services isn’t really a stretch.  In fact, most businesses outsource their IT management now by using outside computer technicians.  It’s just that they only outsource the management, and not the entire IT problem (e.g., desktops, servers, etc.).

What does outsourced IT have to do with a large firm hosting QuickBooks?  Well, when it comes to figuring out how to approach the problem, we should consider all the parts and IT management is certainly a big part of what hosting offers to a business, and what the hosting solution would be providing to your clients.  In so many cases, I see the professional firm approach the hosting service only in terms of direct costs – cost to subscribe the user, cost of software, etc.  The firm is trying to justify in their own minds paying the cost of the hosting service so that the client will come on board… and then the firm would earn their profits by billing for the work.  The unfortunate result in this model is that the client doesn’t really see the direct cost of, or value of, the hosting solution, and views it as simply a means of working with the accounting professional and making his life easier.

The alternative approach, which is the approach that allows the accounting professional to keep an arms length relationship with the hosting service and, therefore, the cost of the service, is for the client to be the subscriber and pay their own bill for hosting.  When the client gets their service directly from the provider, then they may be better positioned to explore and benefit from the other services the provider can offer – including hosting for other critical business applications.  This is often where a QuickBooks-only or self-host service begins to fail the subscriber,  by not being able to support other applications or processes critical to the business.  And, if the service doesn’t work for the client business, they won’t use it.  If you try to make a client use a service that doesn’t work for them, then you’ll likely lose the client.

I believe it’s important for the client to know that the technology model supports doing business in a more efficient and effective manner, and that the technology and their accounting are not the same thing. The accounting firm does important work for the business, and the hosting solution helps them do it better.  Certainly, firms see a lot of improvements in their internal efficiency, as well as improvements in client service, when they apply the correct technology to solve certain business problems.  The client will see that, as well, if you let them.

QBC

Running QuickBooks in the Cloud: Get Information from those who know

Read the article “So You Think You Want to Host QuickBooks.  Really? Seriously?“  subtitle: Biting off more than you can chew

Read more about reselling accounting versus reselling technology, because we know you’re wondering about this stuff, too.

Running QuickBooks in the Cloud: Information from those who know

QBCloud consultants have been involved in virtually every aspect of the popular QuickBooks hosting service from the very beginning – all the way back to 1997, before the Internet was a hugely big deal, and prior to DSL broadband even being invented.

Back in those days, hosting of QuickBooks software seemed more like a license enforcement issue to Intuit than anything, because it was demonstrated that hosting business software might also a really great way to steal it.  Well, to provide lots of people with unauthorized use, anyway.  This is one of the main reasons why we worked for so long to try to get Intuit to recognize not only the business benefits of hosted applications, but to also recognize how the provider community could help protect the Intuit QuickBooks licensing.  After all, QuickBooks desktop editions are the bread and butter of the product line, and the after-market of developers, consultants, trainers, writers, and everyone else within the QuickBooks “sphere of influence”, will keep the QuickBooks solutions earning market share for some time.  Why not extend the lifespan of the solution by bringing it to the clouds?

After many years of exploration, testing, and proving the value of the business model, the Intuit Authorized QuickBooks Hosting program was finally launched, with only a few core providers initially participating.  The Authorized QuickBooks Hosting program represents a way for Intuit to provide at least a basic review and authorization for providers who wish to validate their hosted deliveries of QuickBooks applications, and provides a number of guidelines relating to treatment of the customer, the software, and the associated data.

Two of the most important elements of the Authorized QuickBooks Hosting program center around software licensing options and support availability.  The Authorized Commercial Hosts for QuickBooks are the only entities allowed to lawfully offer rental (subscription) licensing for QuickBooks Pro and Premier desktop editions.  Being able to provide QuickBooks licenses as a subscription service provides businesses with a simple and affordable means to keep their QuickBooks software up to date at all times, without the annual expense of upgrades and software installations.  Further, rental licensing programs allow providers to offer “turnkey” subscription services which include both the platform, the service delivery, and the application software license.  With this model, hosted QuickBooks acts more like a true SaaS (software as a service) offering.

The second element is support availability – support for end-users of the software as well as the service providers delivering the hosted apps.  Because Intuit does not support the Pro and Premier editions of QuickBooks in any sort of multi-tenant hosting environment, businesses electing to use these QuickBooks products in hosted infrastructure are on their own as far as support goes.  The commercial providers, at least those that were there from the beginning, paved the way for running QuickBooks in the clouds, developing the methodology and knowledge to implement and support the solution for many different and unrelated businesses from a central infrastructure. While the authorized commercial providers get a bit higher level of software support from Intuit than the average solution provider, the essentials of the architecture and implementation are completely up to the host. The hope is that the commercial providers will step in and assist the self-host and other businesses attempting to develop their own hosting to support client accounting and related processes, but there are very few providers with the knowledge, resources, or willingness to assist others in these areas.

**As a side note, it’s worth mentioning here that the consulting team at InsynQ is a resource which Intuit uses to refer self-hosts and other businesses who wish to develop their own hosted QuickBooks capability, so self-hosts and new hosting providers are not totally without resources for assistance.**

The other issue relating to support is end-user support for the customer-owned QuickBooks license.  When a QuickBooks license is utilized in a manner which does not conform with Intuit’s EULA (end-user license agreement), Intuit may be under no obligation to support that license – by offering technical assistance or by supporting service and product integrations.  This means that users running their businesses from hosting infrastructure that is not “authorized” by Intuit risk losing the support and serviceability of their software licenses.  We are seeing more instances where QuickBooks users are not able to obtain software support for their licenses, because those licenses are either hosted by an authorized delivery or provider, or the licenses were obtained via a method not allowed under the Intuit hosting program rules.

The Intuit Authorized Hosting program for QuickBooks is a good thing, even if there are a few “gotchas” in it (like the $5 per user per month surcharge on hosted QuickBooks users).  It provides the necessary guidance and framework for those who wish to offer hosted QuickBooks in the right way, and creates enough of a barrier (financially and otherwise) to keep out those who either aren’t serious about providing a quality service, or who don’t have the necessary resources to do things the proper way.  Even within the provider community today, there are varying opinions on how to handle certain aspects of the delivery.  There are different classes of providers, as well, with each offering a different solution set and support options, as well as varying in expertise and capability.  Certainly, different technologies will deliver different “customer experiences” but at a gut level, QuickBooks is still just QuickBooks.  It’s all about how much you know, and what experience you have in dealing with the application, the platform, and the user market.

As with so many things in life, experience does matter.  In this case, aligning with a company that has experience running QuickBooks for thousands of users – experience running the software on industry standard technologies and platforms – is the best experience you can draw from.  There is truly a fine art to delivering what isn’t exactly the most robust and well-designed software, and delivering it to a largely non-technical audience complicates things just that much more.  Without the direct support of Intuit and/or an experienced provider, those who embark on a do-it-yourself path will likely have a hard time making it to the clouds.

QBCloud hopes to make things a little easier by providing information and guidance on how QuickBooks in the Cloud works, providers offering the service, proper licensing, and other topics relating to QuickBooks application hosting.   We hope you find it useful.