New QuickBooks Hosting, Devastating Intuit Commercial Hosting Program (updated)

Filed in Intuit QuickBooks, Xero by on March 27, 2010

I released this again for the benefit of my subscribers, as some links below were bad. I previously wrote about the very important new QuickBooks hosting at

New QuickBooks Hosting: History, Why Terminal Server?
New QuickBooks hosting, QuickBooks Sunset Policies and Crippled QuickBooks Enterprise
New QuickBooks Hosting, Confusing? Who?
New QuickBooks Hosting, QuickBooks Software License Agreement
New QuickBooks Hosting, Critical Issues, Crippled QuickBooks Enterprise
New QuickBooks Hosting, Intuit Commercial Hosting Program, Free Download

The new QuickBooks hosting Intuit Commercial Hosting Program Request for Information is one of the most amazing documents I ever read. Here are some important details.

It is a 10 page Request for Information, not an application for participation in the Intuit Commercial Hosting Program. It mentions Intuit, not QuickBooks. This may relate to future hosting of Intuit tax, Quicken, and future programs. It may be very important for the Intuit Federated Applications: Ultimate QuickBooks Add-ons.

The title has Safe, Secure and Reliable Hosting of Business-Critical Desktop Software Applications. It says it wants those who provide superior application hosting platforms, including best-in-class security, responsiveness, customer support, uptime and overall reliability, and licensing management. It needs 20 lines simply to describe evaluation criteria. In short, only the best should apply and they will not know if they are the best until they jump through many hoops. 

How will users feel if they learn that Intuit will only let them run QuickBooks, Quicken, and TurboTax on remote computer systems meeting costly Intuit standards? If Intuit can do this, can they impose similar requirements on local user systems, thereby minimizing support costs? The answer is clearly yes. Intuit can change software licenses at any time, effectively retroactively, in any way it wishes. Moreover, QuickBooks Sunset Policies already limit the systems we can use for QuickBooks. They do so because Intuit end support, bank statement downloads, payroll tax tables, and other functions, about 3.5 years after release of each QuickBooks version.

Intuit Commercial Hosting Program details say that Intuit alone may decide to invite evaluations. This includes a technology and security review, for which you pay $3,000. It also says Intuit may not license you after this. Imagine if you bid for a job and won, only to find out that winning only gave you the right to negotiate. As you will see, these negotiations will be impossible. 

DEVASTATING INTUIT COMMERCIAL HOSTING PROGRAM
The Intuit Commercial Hosting Program details say responses will NOT be confidential, and Intuit may use the information in any way, including sharing it with competitors. It is critical that the RFI does not say Intuit will not use data disclosed to prosecute applicants for civil and criminal copyright violations. The basis, for the Intuit Commercial Hosting Program and Self Hosting Programs, is that Intuit believes such hosting otherwise violates the QuickBooks Software License Agreement. Even if Intuit does not prosecute, this insures that no one can negotiate with Intuit for a license. It also means that Intuit can quickly force any hosting company not selected out of business. 

California or federal police officers and prosecutors, as well as various copyright enforcement agencies, will inevitably learn of the new QuickBooks hosting RFI and related responses. They will be derelict in their duty if they do not subpoena ALL RFI responses for criminal prosecution. This is because Intuit, and the three licensed QuickBooks hosting companies, have long been saying that only these companies should have been hosting QuickBooks. This means that only the three QuickBooks hosting companies have not been criminally and continuously violating the QuickBooks Software License Agreement copyrights for many years. 

The biggest unlicensed companies are most likely to get into the Intuit Commercial Hosting Program. However, these companies likely have the most QuickBooks copyright violations, over long periods. The fact that Intuit may license them, in the future, does not mean they were not acting as an organized criminal conspiracy in the past. Yes, these companies were in a business that they had to know involved repeated large-scale commission of the same criminal act. Therefore, they and their employees should face RICO act prosecution. Even if these copyright and RICO prosecutions do not put most QuickBooks hosting companies out of business, they will make their New QuickBooks Hosting, devastating Intuit Commercial Hosting Program information public. 

DEVASTATING INTUIT COMMERCIAL HOSTING PROGRAM FLIP-FLOPS
Many top Intuit executives were once very active in encouraging expansion of the unlicensed QuickBooks hosting industry. I was one of the key people involved in the early encouragement, so I can testify about it. I also can testify about my repeated publicity, with the full knowledge and consent of top Intuit execs. The result was a massive expansion of the unlicensed QuickBooks hosting industry. Thinking that Intuit later had the ability, or even a legal right, to suppress this key information was a third New QuickBooks Hosting mistake.

It is outrageous that some of the top Intuit execs, who once actively encouraged unlicensed QuickBooks hosting, are now acting to criminalize virtually the entire industry they helped create. This is especially repugnant for Intuit, when the most important part of the inspiring Intuit Mission and Operating Values says, “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.” I still think the world of Intuit and its leaders, but forgetting how this applies to QuickBooks hosting was their fourth New QuickBooks Hosting mistake.

Intuit can now only avoid criminal prosecutions by revising its Software License Agreement, making QuickBooks hosting legal. Not realizing the potential criminal consequences, for its later flip-flop, was a fifth Intuit mistake.

INTUIT COMMERCIAL HOSTING PROGRAM DETAILS
The RFI requires disclosure of clients by size (annual revenue) and industry (percent of revenue). It also requires three years of company and hosting revenue, net income, number of employees and contractors, number of these overseas, full time equivalent total, and separate numbers for sales, engineers/developers, network administrators, security staff, tech support, management, and others. However, the RFI has space for only two years of such data. This is the second mistake I found in the New QuickBooks Hosting Program literature. The first mistake was that there were to be no more than five users hosted in one QuickBooks file at a time. Intuit quickly fixed that, as it probably will fix a far more devastating Intuit  

The RFI also requires a description of major services offered and an approximate percentage of total revenue that each service represents. It then asks the number of total and new hosting customers AND users you had in the last year, split by enterprise, small business, and franchise, plus the average number of users per customer. Next comes a request for the small business applications hosted, written agreements with application developers, a descrption of international customers by country, foreign expansion plans, countries most likely to use services, and much more. I will not continue sum marizing this, as I am still only on page 6.

MORE DEVASTATING INTUIT COMMERCIAL HOSTING PROGRAM CONSEQUENCES
I discussed why the Intuit Commercial Hosting Program would be devastating to those who apply and do not win. However, the Intuit Commercial Hosting Program also will be bad for winners. They must pay $15,000 initially (besides the $3,000 discussed earlier) and $5,000 a year, plus $5 per customer per month. They also may face future price increases, as Intuit will know exactly how much it can squeeze from them. This will put them at a competitive disadvantage, as I will soon show why the Intuit Commercial Hosting Program is unenforceable. 

The Intuit Commercial Hosting Program also will be very bad for QuickBooks users, whether they choose to use Intuit Commercial Hosting Program winners, losers, or those who do not apply. The Intuit Commercial Hosting Program winners will charge more. Choosing the losers, or those who do not apply, will make QuickBooks users subject civil and criminal prosecution. Not using shared computers will mean not using the increasingly best technology.

Unfortunately, our Intuit friends cannot win this fight. They will actually most damage Intuit if they totally succeed with the New QuickBooks Hosting. Intuit already has a 95% retail market share in the small business accounting and home checkbook program field. It recently bought dominant companies in online payroll and personal accounting. If it actually gets almost 100% of small business accounting program hosting, the devastating Intuit Commercial Hosting Program is sure to result in monopoly action abroad, even if it does not happen in the United States. Microsoft and Citrix may file large damage claims, due to the many shared computer operation system sales they will lose. Outsourcing companies are sure to file such suits. The combined treble damages are likely to be more than Intuit’s net worth, so simply having them filed should force prompt Intuit disclosure. That is how the Devastating Intuit Commercial Hosting Program soon may devastate Intuit stock prices.   

All this is why I will soon have many more posts on the New QuickBooks Hosting.

 

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