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Intuit Authorized Commercial Host for QuickBooks Offers Flexibility in Business Model | Clarifications on Revenue and Usage Commitments

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Intuit Authorized Commercial Host for QuickBooks Offers Flexibility in Business Model | Clarifications on Revenue and Usage Commitments

There have been some recent changes to the Authorized Commercial Host for QuickBooks program, offered to commercial application service providers who wish to provide hosting services for Intuit QuickBooks desktop edition products.  Among the material changes in the previous ACHQB program is the introduction of revenue commitments for continued participation in the program.  While these commitments may seem extreme to some providers, it is important to recognize that Intuit has introduced a great deal of flexibility in how hosts meet this commitment.  With the variety of options available, and particularly with the ability for hosts to now rent QuickBooks Enterprise edition licenses, the minimum commitment isn’t difficult to achieve.

I published an article yesterday which discussed the recent changes to the Intuit Authorized Commercial Host for QuickBooks program, and wrote “Intuit is now holding service providers to a committed level of usage in order to obtain the benefits provided by the program.  Where the only consideration was the cost of entering the program and providing the service, providers must now justify their commitment to delivering what amounts to a minimum of 1,500 hosted QuickBooks users per quarter. “    This is true, as it relates to the “bring-your-own” license model, where there is a hosting fee of $5 per user per month payable to Intuit for customers hosted with previously-owned licenses.  However, the article neglected to cover the additional ways that providers might meet the quarterly revenue minimum.  The clarification to be made here is that the commitment is based on revenues, not usage.

Under the QBACH program providers may pay revenues to Intuit for a variety of items including hosted user fees, rental licensing subscriptions and the cost of licenses purchased for customers.  All of these items qualify as revenue items to Intuit under the program, and the hosting fees and rental licenses are generally ongoing (meaning that they count as long as they are in service).  Because each of the items addresses a different element in the hosting business model, there is a great deal of flexibility in how service providers might meet their quarterly commitments.

As an example, a service provider might host QuickBooks Enterprise Edition, and provides rental licensing of QBES to the customer (a capability just introduced through QBACH).  Because the entire cost of the rental license is reported as revenue to Intuit, this service provider could meet their entire quarterly revenue commitment by hosting only 40 users for the reporting period.

The changes in the QBACH program have been made to offer choices to service providers, allowing hosting companies and application service providers to meet the needs of their markets and businesses without having to conform to a single model.  Whether the service provider focuses on hosting customer-owned products, providing subscription rentals or selling customer licenses, Intuit’s QBACH program’s new requirements make all these efforts count.

Joanie Mann Bunny Feet

Make Sense?

J

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