Just Getting Started: Application Hosting for Small Business
Accessing software applications and data from a remote system isn’t new stuff. Starting with telephone modems, acoustic couplers (those things you’d put the phone handset into so that the modem could “hear” the data), green screen ASCII terminals and host computers, users have connected to remote systems to access applications and manipulate stored data for years. As personal computers became viable for business use, applications and data moved from centralized hosts to local computer environments.
As complexity of local environments rises and broadband becomes truly affordable and accessible, application and data management services are moving back to the centralized system approach. It’s an expand and contract model, where new capabilities empower the endpoint (the user device) and complexity and scale economies drive centralization of resources and management. Computing paradigms have once again reached the point where centralization of resources, along with the management and administration of the resource, makes sense for even the smallest of business organizations. This is the new push for small business IT service delivery, and we’re just getting started.
Application Service Providers (ASPs) were once thought to be the providers who would tip the scales towards server-based computing in the new era. Rather than creating wide-spread adoption of hosted applications and “virtual” desktops, the ASP business model fell by the wayside as part of the dot-com bust. It was the right idea, but the market wasn’t ready to accept it and promises of the demise of the desktop turned into the demise of the ASP.
With the successful introduction of SaaS solutions and web-based applications, interest in subscription based IT models has not only grown, but becomes the specific focus of the entire IT industry. From OEMs to channel resellers, the supply chain for IT products and services is adopting cloud and subscription-based service and business models. What’s interesting about this second go-around with Internet-based desktop and application services is that the adoption levels are real, the revenue potential is real, and customers are seeking out these solutions rather than being sold. Managed applications and hosted virtual desktops have become accepted, if not preferred, models for delivering IT services to businesses.
Small businesses can benefit from enterprise-class technologies when a certain economy of scale is developed, and if the environment delivers services around the software and functionality those businesses already need and use. Logic dictates that Intuit QuickBooks desktop products might be a focus for hosting service providers, as the solution is easily the most accepted financial application by small businesses. Businesses don’t readily change their financial and accounting software, so addressing this need is a key aspect of adoption. Also, with QuickBooks, it is as likely as not that the business has an outside accountant who will, at some point, need access to the application and data. Meeting this need and proving the viability of hosting applications such as QuickBooks - offering the solution in the form of subscription service to the customer - has been accomplished through many years of discovery and validation by some of the providers in what is now the Intuit Authorized Host for QuickBooks program.
With the validation of the service model and Intuit’s introduction of an Authorized Host for QuickBooks program, a great deal of opportunity has been created for value added resellers and their small business customers. Some in the industry would suggest that Intuit’s focus on the Online edition of the product indicates that opportunities around selling or hosting the desktop products have diminished, and Intuit appears to be spending heftily on the promotion of QuickBooks Online. Yet it remains true that many customers – whether they be existing QuickBooks desktop customers or new QuickBooks customers – want the functionality and the integrations available only with the desktop editions.
For these customers, a hosted/managed application service model is the only answer. IT resellers working with small business customers are undoubtedly getting the requests, and a few are beginning to recognize the value and service potential associated with offering hosted application services for QuickBooks and other popular small business software products.
As the largest of software vendors (like Microsoft, Intuit, etc.) with small business solutions make their licensing models available to hosting providers, resellers and hosts alike can take advantage these programs and offer their customers the benefits of mobility and managed service around the applications already in use. Business owners like the benefits to be gained by adopting cloud computing models, but are resistant to changing their software and restructuring their processes. It is the ability to deliver the benefit without the disruption that makes these application hosting service models attractive.
There are millions of QuickBooks desktop users out there, and only a small fraction are being hosted by authorized providers. Intuit continues to sell the desktop solutions and the number of QuickBooks users isn’t in decline, so the opportunity to serve those QuickBooks customers continues to grow. When it comes to providing application hosting services for small businesses, we really are just getting started.