Intuit Will Kill QuickBooks Hosting Companies

Intuit QuickBooks Commercial Hosting program documents show that Intuit will kill QuickBooks hosting companies. Its new product now confirms this. 

Intuit strongly supported QuickBooks hosting for 13 years. I saw this as a long-time friend of Intuit CEOs and top managers. Intuit asked the first ProSeries (TurboTax Professional) Advisory Council members what we would do if we ran ProSeries. I said bundle QuickBooks, ProSeries and other programs with remote terminal server hosting. Programs seem to run as fast on a remote server as on local file server. ProSeries QuickBooks imports ran faster. File servers transfer chunks of QB data across networks, so local computers can process it with local QB programs. The QB network program minimizes such transfers, but programs like Microsoft Terminal Services and Citrix do this far better. They keep data and programs on a remote computer and only transfer keystrokes, screen changes and printer data.

None of thirty top ProSeries managers disagreed. Fifteen Council members made this their second choice, among almost as many options. The next day an Intuit manager discussed this endlessly, while giving three of my hosting company executives and I a long ProSeries tour. He called it, “A whale of an opportunity for Intuit,” especially for multi-office tax preparers.

I wrote 7,000+ posts about QuickBooks, in news groups and forums, in a few years. Brad Smith, Intuit CEO, gave me the first outsider blog on an Intuit site. You sign nondisclosure agreements for advisory councils and beta tests, so I drafted a QuickBooks hosting article and emailed it to Brad. He always quickly replied to my advance posts with something like, “You do not have to send me anything in advance. We trust your judgment.” Based on this, I used and wrote extensively about QuickBooks hosting for years, without Intuit objection. This led to many new QuickBooks hosting companies, so there were soon around a thousand such companies. Please note that QuickBooks Pro and QuickBooks Premier have long run perfectly under QuickBooks hosting, though Intuit only supports QuickBooks Enterprise for it.

I often wrote about the QuickBooks license agreement provision prohibiting shared computer use, but Intuit did nothing about it. Intuit also initially licensed only two companies for QuickBooks hosting. Its beta tests, like all other beta test for many companies I have long known, require a secrecy pledge. However, Intuit gave these so-called hosting beta test participants a very unfair monopoly advantage, by letting them advertise and promote their exclusive status. It later gave them a further ridiculous monopoly advantage, by letting them rent QuickBooks at very favorable rates. This caused increasing friction between my Intuit friends and me over QuickBooks hosting.

Intuit finally opened its QuickBooks Commercial Hosting program around 18 months ago. The related documents made it clear that Intuit will kill QuickBooks hosting companies. It was immediately obvious that almost no QuickBooks hosting company could meet the security and financial requirements for licensed QuickBooks hosting. It would outrage QuickBooks users if Intuit insisted they have the security requirements and costs that Intuit demands from commercial hosting companies. It is especially outrageous that these requirements do not apply to clients of QuickBooks hosting accountants, though anyone can be an accountant’s client for hosting only.

The QuickBooks hosting license made it especially clear that Intuit will kill QuickBooks hosting companies. I have never found anyone who did not express outrage when they learned about this. It requires applicants to disclose ALL confidential financial, security and customer information. This does not obligate Intuit to accept applicants meeting any standard. Intuit also reserves the right to compete against applicants and make their information public. To me, this was a death sentence. Such provisions insure that Intuit can increase fees until they get almost all QuickBooks hosting profits. They also suggest that Intuit would soon kill QuickBooks hosting companies with a competing offering. It is now clear that Intuit always intended to do exactly that.

What makes this completely disgusting is that Intuit will even kill QuickBooks hosting companies that recently joined its commercial hosting program. Most of these nine companies (details to follow) paid an extra $18,000 for the first year and $5,000 for later years, PLUS $5 per user per month. That made them non-competitive with the thousand unlicensed QuickBooks hosting companies and with to accountants hosting QuickBooks clients. Intuit insisted on these extra fees know that it would soon kill these QuickBooks hosting companies.

Intuit will kill QuickBooks hosting companies with a new product. Method Integration has long let users enter data in its programmable web forms. Method then synchronizes this data with QuickBooks. It seemed obvious to me that this would let Intuit create a product that would synchronize data between separate QuickBooks data files. We now know that this product will be QuickBooks Shared Books. It looks like it is already undergoing final testing. It may only synchronize two files at first, but there is no reason it cannot soon synchronize many files. This is inherently far more efficient and less costly, compared to terminal server type QuickBooks hosting. Only those needing the immediate updates, from other users, will not quickly use it (subject to Intuit monopoly pricing).

This probably means Intuit will soon kill around 80% of QuickBooks hosting company revenue and a far larger percentage of QuickBooks hosting companies. Intuit adopted 10 operating values in 1993. I long championed Intuit because it really lived up to its #1 Operating Value:

Integrity Without Compromise

Intuit is built on integrity. In all we do, we maintain the highest standards, never approaching what could be considered questionable behavior. On this, we never compromise.

Having integrity means more to us than simply the absence of deception. It means we are completely forthright in all our dealings. We say what needs to be said, not simply what people want to hear.

Integrity builds trust. Only through trust do successful, long-term working relationships flourish.

Intuit CEO Brad Smith, a former close friend (You’re fantastic Mike. Absolutely fantastic!). However, his lack of foresight led to the longest web downtime, for a million plus users. He relied on one data center in earthquake country, without adequate power, backup or replication.

Brad also seems to have lost his integrity. How else can you explain reversing 13 years of QuickBooks hosting support and extorting QuickBooks extra hosting fees, knowing Intuit will kill QuickBooks hosting companies and millions in third-world service provider revenue? How else can you explain Intuit placing short-term profits ahead of the values that made it great, while knowingly wasting a billion dollars a year for QuickBooks users? How else can you explain Intuit screwing employees, by colluding on non-solicitation, in violation of monopoly laws?

 

 

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Fastest, easiest, accurate, low-cost QuickBooks! Intuit - QuickBooks CEO, "You're fantastic Mike! Absolutely fantastic!" Tax fighting CPA.

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