New QuickBooks Hosting, Worst Intuit Mistake 2

Filed in Intuit QuickBooks, Xero by on April 5, 2010

I knew Fred Lake from one of my QuickBooks hosting and outsourcing companies. He is now an Intuit Advisory Council member. After only seeing the headline of one of my New QuickBooks Hosting posts he wrote, “Mike. Why do you feel so strongly?  I looked it over and it looks pretty good.”

I responded:

I am shocked that you found nothing objectionable to the New QuickBooks Hosting Program. I believe there are only two reasons that most QuickBooks hosting company executives, hosting customers, and QuickBooks users are not YET as outraged as I am by this program and its use of the QuickBooks Software License Agreement. I most respectfully submit that it is because they do not know the facts I know and have not spent the time I spent analyzing the New QuickBooks Hosting documents.

Please read and the referenced posts and documents. The New QuickBooks Hosting Request for Information (RFI) will take thousands of dollars of time to properly complete. Intuit seems to want the type of data center Internal Revenue wants for a partial exemption from its anti-foreign tax preparer outsourcing. The official government estimated cost of that application is $150,000. That is not the cost of the data center, but the estimated cost of required paperwork.

I heard Intuit planned to license about 12 more hosting companies (total 15), while putting around a thousand out of business. There were 600,000+ Google links to QuickBooks hosting, so there may be far more hosting companies. Even if there are only a thousand companies, with an average of 200 users per company, this affects 200,000+ QuickBooks hosting users. The New QuickBooks Hosting also does not allow QuickBooks hosting on internal company servers, which may far more than double the affected QuickBooks hosting users.

Intuit Commercial New QuickBooks Hosting companies will pay $18,000 in the first year (including $3,000 before knowing if they qualify, as they cannot call on the RFI), $5,000 a year in later years, and $5/client per month. Intuit will get so much hosting company financial, operational, and security information that it can always further squeeze these New QuickBooks Hosting companies. It expressly reserves the right to make the information public and compete with the New QuickBooks Hosting companies, so it can give information on New QuickBooks Hosting rejects to its favored few.

The costs of these commerical New QuickBooks Hosting companies will not be competitive with the costs of self-hosting Certified QuickBooks ProAdvisors and Enterprise ISPs, so three times as many un-certified QuickBooks ProAdvisors will be upset. The cost differential also will let anyone in the New QuickBooks Hosting self-host group expand his practice to have 10,000+ clients, as a $1 white-label generic newsletter can make you my client. That exemption is only one that CPAs

Top Intuit execs actively encouraged the growth of the QuickBooks hosting without mentioning the shared computer prohibition in the SLA. To the contrary, some agreed that the SLA would change for the apparent violation. Now some execs are letting Intuit use this SLA to ban shared computer use. However, all network file servers are banned shared computers. Most shared network servers also run the QuickBooks network client – server program. These shared computers are not technically distinguishable from SLA banned shared terminal server computers, which is hypocritical.

The Intuit approach means that all who provided or used QuickBooks hosting service violated copyrights. This criminal offense applies to licensed New QuickBooks Hosting companies before licensing. If Intuit rejects an New QuickBooks Hosting applicant, the company will have to go out of business quickly. It will otherwise face many effectively admitted copyright violation and RICO Act charges. This makes the Intuit execs that encouraged QuickBooks hosting criminal co-conspirators. Some may consider them guiltier than those who committed the copyright offenses. Intuit may contract with New QuickBooks Hosting companies to legalize this in the future, but federal and state criminal prosecutors would be derelict in their duty to not prosecute prior violations. This is beyond hypocritical.

My latest post shows that there is no reason for any of this. Intuit can and should monitor be bill for inappropriate QuickBooks hosting. QuickBooks users should not be able to use a copy of QuickBooks during the day and have an outsourced contractor use the same copy of QuickBooks at night. I suspect Intuit would get more revenue by enforcing this improper dual use than they would from the New QuickBooks Hosting program.

Some of my many future New QuickBooks Hosting posts will show that

<spanSymbol”>·         QuickBooks hosting companies can easily restructure, technically or legally, to avoid the New QuickBooks Hosting Commercial charges.

<spanSymbol”>·         Not allowing the very increasingly popular shared computer use, without punitive New QuickBooks Hosting charges, will hurt QuickBooks users, hosting companies, powerful allies, national and international authorities, and Intuit.

<spanSymbol”>·         Intuit is betting its very survival on this issue, for far less extra revenue than it could and should get by charging for day – night QuickBooks use, when likely damages are 1,000 times as much.

I may be wrong about many of my predictions, but it is likely that even unsuccessful copyright or anti-trust litigation will make the New QuickBooks Hosting RFI data public.


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