QuickBooks Hosted on an ASP – Why it Makes Sense

From the April/May 2009 Issue

As you continue on your path towards taking your practice online, you should take a close look at using an Application Service Provider (ASP) to host QuickBooks for you and your clients. This is a fantastic service for accountants and their clients, and with some of the new developments in the marketplace, I predict there will be a new surge in ASP adoption by both accountants and clients.

Some firms don’t yet see the benefit of moving off their local desktop/LAN systems because they have in-house technical people to keep everything running smoothly, and they’ve figured out other remote access solutions to facilitate the accountant/client collaboration.

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.