From the Oct. 2007 Issue
About eight years ago, I first began to get excited about online accounting applications and their potential for revolutionizing the accounting services business. In 1999 and 2000, when I was traveling the country teaching accountants about QuickBooks, I added a section to the seminars to discuss a new online accounting application from NetLedger (later called Oracle Small Business and now NetSuite). Although I found resistance from accountants at first, I took it upon myself to go out and educate people on what this new type of solution would mean for our business.
The significance of this breakthrough product (essentially an online version of QuickBooks), was that it released accountants from the hassles of driving across town or asking clients to come to their office in order to work on the accounting data. Since NetSuite and similar products are delivered via the Internet as opposed to being installed on your local LAN or hard drive, they change the way you think about hardware, disk space, the LAN, and even the need to be “at the office” to do work. And when it comes to client services, the fact that the client data is online and accessible anytime from anywhere, this technology dramatically increases our ability to provide more services to more clients in more places around the world.
With its new product, NetSuite created a whole new software category called Software as a Service (SaaS). Other companies had been providing remote hosting of software for some time, but, in 1999, no other company had the small business accounting focus that NetSuite did, so it was NetSuite who introduced this idea to most accounting professionals.
In 2002, Intuit entered this market with the release of QuickBooks Online Edition, which has dominated the small business segment of this market while NetSuite has moved up market and now dominates the mid-range market for online applications. Meanwhile, as these web-based applications from NetSuite, QuickBooks Online and a few others have been growing in popularity, there has been a parallel market developing in “Hosted Desktop Applications.” Since the late 90s, several ASPs (Application Service Providers) such as Citrix, ProPalms (formerly Tarentella), InsynQ (cpaasp.com) and several others have been providing remote hosting of desktop applications. These companies rent access to a server that runs Windows (loaded with applications such as QuickBooks, Microsoft Office, and others) via an Internet connection. Just as NetSuite paved the road for web-based applications, InsynQ was the company that paved the road for the Hosted Desktop Applications market for small business accounting.
So here we are in 2007 with two similar approaches to the same problem. One group of SaaS vendors provides web-based applications, while the other group provides Hosted Desktop Applications. Both provide many of the same benefits, but each has its own tradeoffs of performance, features, scalability and security. The reason these technologies are so important to accountants is that we need to access client data in order to provide services. If the data is locked up on the client’s LAN or hard drive, providing services is difficult and inefficient. But that is the reality for most QuickBooks consultants. We have solutions for transferring data files and remotely logging into the client’s office, but all of these are extra steps and costs that shouldn’t be necessary. Also, clients who have multiple locations or traveling employees can really benefit from online software because of its anywhere, anytime access, and because of the always-available information access features.