Confusion Over QuickBooks Software Licensing and Concurrency

con·cur·rent/kənˈkərənt/

Adjective: Existing, happening, or done at the same time

The use of the term “concurrent” when it comes to network, application and data licensing and access metering is applied with some fluidity, with the essential meaning being consistent, but the method of applying it varying greatly and sometimes dynamically.  The unfortunate reality is that not all software products or platforms measure or meter concurrency in the same way.  Concurrency – how it is defined and applied to your selected products – may greatly impact the cost of using the product.

To illustrate the confusion which exists in the market regarding software licensing and concurrency, I’ll use Intuit QuickBooks desktop edition as an example.  There is a lot of confusion over QuickBooks software licensing and concurrency. The Intuit QuickBooks desktop product has a licensing model which confuses a lot of people.  When the software has limitations built in, such as an inability to install the product on more than the authorized number of computers, or if the software electronically validates or activates itself to prevent unauthorized installation or use, the consumer seems to have a bit of an easier time conforming to the license language.  However, products such as QuickBooks have evolved in a market where consumer demands sometimes outweigh reasonable enforcement efforts, so the product may allow you to technically do something that you really shouldn’t do – like install and use it on a bunch of computers without the appropriate licensing to support that activity.

In the world of QuickBooks, there is a concurrency metering element which exists, but it depends quite a lot on user behavior and the existence of the QuickBooks database manager.  For example, a single copy of QuickBooks installed on a PC will allow that user to open the program and then also open a company data file.  In order for the data file to be opened at the same time (concurrently) by more than one user, the file must be in multi-user mode, which is a capability created by using the QuickBooks database manager.  When two QuickBooks licenses (either two single-user licenses, or a two-user license) attempt to open the same data file at the same time, the QuickBooks database manager allows it.  However, if two computers running the same license number for QuickBooks attempt to open the data file at the same time, the database manager will recognize that there is only a single license involved and will not allow both stations to access the file at the same time, remaining in single-user mode.  Only when the database manager recognizes more than one eligible software key (either multiple individual keys or keys aggregated as multi-user) will it allow the data file to be opened in multi-user, or concurrent user, mode.

The problem with QuickBooks metering is that it relates largely to the data file, and not the program.  In a situation where users require only single-user access to QuickBooks company data files, use of the database manager is not required, introducing a potential for unlicensed users operating in a concurrent application use mode.  The reality is that the QuickBooks program won’t generally prevent installation on multiple computers, or installation in a remote desktop environment.  Installing the product into these situations allows granting access to the program for multiple users easily.

In many environments, administrators consider access to the QuickBooks program to be a concurrent access license, meaning that as long as they have no more active users than what they are licensed for, they are in conformance of the license.  This is not the case.  A 3-user license of QuickBooks Pro does not allow any 3 concurrent, or simultaneous, users to access the software at any time.  Rather, that 3-user license qualifies only 3 distinct named human beings accessing from 3 specific computers use of the program.  Because the QuickBooks license is a strange combination of a license for a computer device and an individual person, even having two different usernames and users accessing QuickBooks on a single computer (at different times even) requires 2 licenses in order to be in conformity with the EULA.  The number of data files being accessed is irrelevant in terms of product licensing.

Users of QuickBooks desktop products need to fully understand their licensing requirements as they consider moving their service to the cloud and hosting services.  In many cases, the method of using licenses in the local network did not actually conform to licensing requirements of the developer, and all quality service providers will require that you “true up” your use of software in order to not introduce risk to the provider.  For some folks, this means that using QuickBooks just got a lot more expensive, because they were not properly licensing the product before.

There are an awful lot of folks taking liberties with QuickBooks licensing, providing access based on concurrent users rather than named users, or not even licensing users who “view information but don’t really do anything in the software”.   The fact of the matter is that, if you can run the program and open the data file, you need a license.  What you do in the program is irrelevant, in terms of product licensing.

Part of the value proposition of using hosting and cloud services is a more predictable and manageable cost of IT for the business.  Service providers may understand what their service needs to provide, but often don’t know what their quotes are up against in terms of licensing comparisons.  When comparing your cost of local IT versus hosted, make sure you fairly include the REAL cost of software, licensing, and system administration on the local side.  Unless you do, those changes in software licensing may simply reveal other issues you need to address before you can get a believable comparison of in-house versus outsourced service costs.

Make sense?

J

Read more about online accounting, cloud computing, and accounting and bookkeeping in the cloud on Bookkeeping in Bunny Slippers

www.bookkeepinginbunnyslippers.com

Software vs Service Provider – why you aren’t running your apps in the cloud (yet)

article originally published in 2007 on Joanie’s Accounting and Business Technology Blog

When a user logs in to a virtual desktop, and all their valuable and beloved applications are available to them, fully functional and integrated as they are on the PC, with all their data available to them as well, the reaction is almost always one of excitement, empowerment, and – ultimately – bewilderment. “Why”, they ask, “doesn’t everyone do this?”

Good question.

At least part of the answer is due to the way software companies license and sell their applications. Now, if you can continue to produce your product in the same way you always have, distribute it using your known distribution channels (which deliver predictable performance), and realize revenue in the manner to which you have become accustomed, why would you actively seek to create disruption in the “normal” flow of things? Especially when status quo seems to be working pretty well.

Another good question.

The adoption of virtual computing (in this case, hosted desktops and the applications associated with them) is pretty much in the hands of the application software companies. It’s certainly not the platform that we are waiting for. The base technology is already proven on the hardware side, with blade servers and other high-density configurations available. And the software has been proven in a variety of deployments, as demonstrated by Microsoft Terminal Services, Quest Software, VMWare, Citrix,and others.

So – the software companies are part of the barrier.

And so it comes down to the application software manufacturers. These guys seem to fall into two main camps when it comes to cloud-ifying (my new term) their applications: (1) redevelop the app with a web framework and deliver a browser-based solution, or (2) pick a single delivery model from the above list of platform software providers, and eliminate any true integration capability. In short – webify or segregate. Either way, it creates severe limitations in the way the software can take advantage of integrations with other applications. And, for most desktop software vendors, integration with other desktop applications is frequently one of the key benefits of the product.

The web-based applications have already come to grips with this reality. Where a download of a document to your favorite word processor was once just fine, the market now demands data re-use and expanded business process integration, forcing the web applications to open themselves to outside integration and 3rd party developments. Just look at the developer network Salesforce.com has built. If that doesn’t prove that no app is an island, I don’t know what does.

But the desktop apps who have chosen to “webify” using application publishing and delivery tools have evidently forgotten that one thing: integration is part of what makes their apps popular. No business process is an island, and the data rarely stands alone. Would ACT! be so popular if it couldn’t integrate with your Outlook email client, or with your MS Word word processor? Would MS Excel be so popular if you couldn’t push almost anything to a spreadsheet file? The answer is no. This is why the integrations were developed in the first place – greater functionality and an improved value proposition, resulting in increased use and user productivity.

Too many options?

To complicate the problem, there is not just one delivery method that works for every application, business model, or user. With the variety of technologies available, independent software companies have hard choices to make in determining how their cloud’d products might be offered, and additionally by whom they might be sold. As of today, though, many software companies have approached the problem alone, where opting to use their “hosted” editions frequently eliminates the option of integrating on the desktop with other locally-run applications.

Not only does the software maker have to find the best technology/platform fit for the delivery and for their market, but they must also then consider their distribution channel – the “food chain”of delivery of the product or solution. Often this “who” that can offer the product is just as big a problem as “how”.

The maker of a given software package is in the business of selling their software, not other peoples’ software. While integration with other products is exceptionally important to the product’s value in the market, the software maker is fundamentally concerned with only the sales of their own solution. They tend to promote sales through resellers and consultants who can not only provide the software but offer install, training, and ongoing support as well. Designating sales organizations which are “authorized” to represent a product is a typical software company approach.

Many of these authorized resellers are focused exclusively on selling the software solution, not the ongoing support of the platform. These resellers are often highly skilled at working the specific software application, but may lack in-depth understanding of the platform upon which it runs.

Some authorized resellers are actually integrators – companies who sell products from a variety of sources and combine them into “solutions”. Historically, integrators have been key players in creating successful markets for certain products, providing the support and other services necessary to keep the products entrenched in the user community.

In many cases, the integrator makes their money on the support element on the arrangement, not necessarily on the product. In these situations, the platform and ongoing maintenance and support are the key revenue drivers, and the integrator may be loathe to recommend a solution to the client that cuts into their involvement and revenue stream. And hosted, managed, cloud-based application services can certainly do that.

What is the answer? Well, there isn’t just one that jumps out.

One element in the solution is recognition by software companies that their products need to be available in a hosted model. Consumers require choice in terms of their involvement with the business IT infrastructure. Some folks want to control it, others simply need access. The business of hosting applications is growing, but many of the software makers in the market aren’t behind the movement.. they are unwilling participants who leave it up to the service providers (the integrators in the datacenter) to make things work. In some cases (I will refrain from naming names herein) end-user licenses are even written to make hosting the software an illegal event.

Another element, equally if not more important, is the service provider community. With the wide variety of technical standards out there – the different technologies, different approaches, different levels of consideration, and different market sensitivities – it is no wonder that fear and doubt are prevalent in the market.

And then there is the distribution channel and method of selling licensing. Many software companies work exclusively through their authorized reseller channels. While this may benefit the user from a product knowledge standpoint, it creates difficulties with the new delivery model and frequently puts the software sales channel in direct competition with the platform providers.

The tweener gets you from here to there.

While the concept of cloud-ifying desktop and network applications may seem to be “fraught with peril”, it can be done well and deliver significant benefits to the company. By simply changing the way employees access and interact with their applications rather than changing the apps themselves, businesses can introduce an entirely new range of business benefit and capability. Outsourcing the business IT can also represent cost savings and, more importantly, allow you to focus personnel and financial resources on your core business. And, for those who see online application services as the future, this “tweener” step gets you divested from localized technology and helps to embrace the flexibility and freedom that virtual and mobile computing can deliver without forcing radical change.

Now, if we can only get the software makers on board.

Learn more about hosted applications and why Outsourced IT services, Cloud computing, and working at any time and from anywhere makes a lot of business sense.

Tips for Selecting a QuickBooks Hosting Provider for Your Business

Tips for Selecting a QuickBooks Hosting Provider for Your Business

Hosted and managed application services are not really new technology – they are very similar to the service bureau computing models of years past, where green-screen dumb terminals were connected via telephone lines to large host systems located “somewhere else”.  Today, remote desktop technologies and high-speed Internet connectivity are combined to allow hosted services to deliver the performance and functionality, and nearly as much flexibility, as localized computing.

With Intuit’s announcement of an authorized QuickBooks Hosting program early in 2010 came increasing levels of market awareness of the  potential benefits of a centralized, hosted QuickBooks model.  While some providers had been offering  hosted QuickBooks software for years, the program created by Intuit has encouraged others to join into the model.  Unfortunately, some wanting to join the model have proven to be providers with little or no experience in delivering managed application services.  Others, who may have experience in hosting QuickBooks, saw barriers to the program and decided not to participate.  This puts their clients as risk by using a solution which is unsupported by the software license or developer.

How does a business select a hosting service provider for their critical business financial applications and data when there are so many companies saying they can do this?  Here are a few basic criteria that should be met by any provider, and then it comes down to the details – and we all know that’s where the “gotchas” are.

Following is some general guidance we can provide on ASP (application service provider) or hosting provider selection.  This list is not exhaustive by any means, and there may be other important aspects of the delivery that your specific business or unique situation may need to address.

1. Is the hosting provider authorized by Intuit as a commercial host for QuickBooks?

If you’re going to use QuickBooks software in a hosted environment, you should make sure your provider is authorized by Intuit to deliver the service.  Opinions vary on this subject, but the facts are the facts:

Intuit requires that commercial hosts certify with the MSPA (Managed Service Provider Alliance) prior to engaging with Intuit.  This accreditation validates certain aspects of the provider delivery, so at least there is a basic assurance that the provider has the necessary elements to provide a hosted application solution.  Intuit then takes it further by requiring that the host agree to meet certain basic requirements in terms of infrastructure redundancy and data management.

Further, the ability to assure customers of the valid use of their software licensing, and to not invalidate their ability to get support for that software, is a very legitimate basis for requiring Intuit authorization.

2. How does the service provider package and charge for services?  Ask what the basic subscription covers, and what other things might you be charged for with that service (setup fees, annual software upgrades or updates, etc).  Is the service shared/public cloud or private?

Some providers offer only shared services, where all servers have the same software on them, and subscribers are balanced among these servers.  When this is the case, it may be difficult or impossible to add certain applications to the hosting service.   Further, it generally means that, when software updates are introduced, those updates span to all servers in the series – for good or bad.   The biggest benefit of this type of delivery is increased fault-tolerance, because if one server goes down, you can generally connect to a different one and continue working with a minimum of disruption.  The drawbacks are generally lack of flexibility in adding applications, integrations, and ad-hoc services.

While most providers offer some level of shared service, they may also offer customized services where the business can elect to have a variety of software applications hosted and managed by the provider.  The custom delivery model requires much more from the service provider in terms of experience and expertise with software installations and management, and capacity planning.  The concept of getting your own “virtual server” may seem compelling, because the service provider sells the benefits of having almost any applications you want.  The downside is that many providers do not provide the consulting and planning that should accompany such a system, and allow the client to get into trouble with incompatible applications or overburdening the system with too many applications or too much data.

If the provider offers customized service, then they likely provide hosting for more than a single application.  Again, experience is critical when working with a provider who will deliver multiple applications or potentially complex integrations.  You want to be sure your provider has demonstrated competency in working with a variety of solutions as well as software providers.

3. What are your options for adding applications or services later?  Can you have other applications hosted besides QuickBooks?

4. Is the technology used to host QuickBooks industry standard, or is it based on something proprietary or unique?  What is the underlying technology used by the provider in their QuickBooks hosting service?   Recognizing that one of the major points of outsourcing the IT service is to not have to concern yourself with the intimate details of the technology, it is not necessarily wise to completely divorce yourself from the issue because it may matter greatly in terms of the ability to expand or support your implementation.

While the platform technology may not seem like it makes a difference now (it’s the provider’s responsibility, not yours, right?), it can make a huge difference later.  When it comes to dealing with a variety of applications, implementing that software in an environment that it can be supported in is very important. If the technology or delivery environment is proprietary, how do you know that the software will run properly – now and in the future, and can you be sure of getting a reasonable level of support for your software in that environment? Proven, industry standard technologies are always your best bet to ensure compatibility with current and future products, and to enable your software provider to support your solution. This may, over time, prove to be one of the more critical aspects of selecting a provider, particularly if you plan to use more than a single software product.

5. What is the method of service delivery?  First, what is the technology used – Remote Desktop or RDP, Citrix, Quest EOP, Thinworx, Ericom… there are a lot of choices out there.  Different technologies offer different features, and you should explore this area to ensure that the delivery and functionality meets your needs and those of your users.  Also ask if the provider utilizes a secure portal for website login, and if it can be co-branded or private label branded.  Other questions may include whether or not the delivery supports the use of multiple monitors; whether the application presented as a full remote desktop service or launched from an icon directly on the user desktop.  Can you access the file system directly, and can you upload and download files whenever you want to?  How does printing work?   All of these questions relate to the presentation of the application (QuickBooks or others), and can impact working habits and user behavior.

6. What are your options for customer service and technical support?  Technical support and support services provided with QuickBooks hosting is another important area to explore, especially if you intend to promote the hosting solution to clients.  If the quality of the support included with the service isn’t sufficient, then not only will the value and usability of the service be diminished, but so could your reputation and the trust of the client you brought on.  Recognize also that the service provider should not be directly responsible for your local PC, network, browser or security, printers, or other elements outside of their control.  This may also extend to data file corruption or data issues caused by the application.  While the service provider is not responsible for these areas, it’s nice to know whether or not they will at least help you with them.

7. What are the billing and payment terms – is there a minimum contract duration or is it month-to-month service?  Are there volume commitments, or volume discounts?  Some providers offer different terms for shared versus customized service, and term or user commitment levels may vary with service level and provider.  Generally, the hosting service is provided as a monthly subscription service.  Some service providers require prepayment of term agreements.  When you pay ahead for the service, it’s very difficult to end the engagement if it doesn’t work out for you, and you could end up being locked in to a service that is not what you need.  If you have customized service, then it makes sense for the provider to require the commitment because both parties are investing in the delivery: you’re investing in the term agreement  and the provider invests in the infrastructure and engineering to create your customized service.

8. What are your options for terminating service, and what happens to your data when you do terminate service?  Every provider should recognize your ability and right to terminate service, but under what conditions and terms?  Make sure you know the rules, or you may be left out of touch with your solution, your applications or your data.  Prior to terminating service, make sure you have all of your data backed up to local computers or devices.  If the ability to backup your data locally, or obtain copies of your data at any time, isn’t a feature of the service, then you should be concerned that you may not be able to get your things back when the time comes.  Upon termination of service your service provider has every right to make you pay any fees due for hosting prior to releasing your current data.  They aren’t keeping you from your information and are providing you a remedy (pay your bill).  The service provider is simply enforcing your requirement to pay for the services rendered before you can take your ball and go home.

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.