The Cloud, QuickBooks and the Desktop
subtitle: Just When They Told You the Desktop Was Dead…
along comes another desktop app.
Everything is moving to the cloud! Everything is going online! At least, that is what they’re telling you. And, to a certain extent, it is true that a lot of things are moving to the cloud; just not everything. And some of what has moved in is moving right back out. Use of the cloud and cloud services is increasing, but that certainly isn’t proving that the desktop is going away anytime soon. The only thing we can be certain of is that things are going to continue to change fairly rapidly, yet the lion’s share of business users will retain working models they have come to trust and rely upon until they are forced to do something else. Today, many accounting and business professionals feel that they are being forced out of the software they have known and worked with for years: QuickBooks desktop software.
I was recently asked to present to a group of accounting and tax professionals, the topic being “alternatives to QuickBooks Online”. I thought it was interesting that this would be a topic of such interest, as QuickBooks has long been recognized as the market leading application for small business bookkeeping and accounting. Accountants and bookkeepers, as well as tax professionals, have worked with QuickBooks for years – many having even styled their practices around the QuickBooks brand and offering QuickBooks-specific training and other services. Why are these professionals now asking to learn about alternatives? Well, it is an alternative to the online version of QuickBooks that these folks are seeking, and they have been given the impression that the desktop editions of their beloved QuickBooks are no more and their businesses are being forced to change.
Due to Intuit’s focus on promotion of the QuickBooks Online edition as THE QuickBooks to buy, there is a growing belief that the desktop products are going away. Many professionals who have worked with the product line for years are now operating under a belief that their only future with QuickBooks is with the online edition, so they are searching for alternatives for their clients and their own practices. The QuickBooks Desktop editions aren’t being eliminated (2016 editions and certifications coming!), but any real mention of them in the direct marketing is gone, because Intuit isn’t pushing these solutions to new customers. It is no wonder the accounting and tax pros are looking at alternatives – and their customers are, too.
QuickBooks has always been a direct-to-consumer solution and was pretty much the only thing a small business owner would find if they shopped for software at the local computer or office supply store. The high-value desktop editions continue to be available, but it is difficult to tell a business owner they need to purchase licensing and then pay for mobility for QuickBooks desktop editions while QBO sounds much cheaper and they can get it on their tablet or PC for that cheap price. Also, there is more shopping online – from phones and tablets as well as PCs – so consumers are being exposed to other brands and the plethora of new online solutions. Now that they are considering buying or changing accounting/bookkeeping software… they could just as easily elect to use something completely free and not spend anything with Intuit or anybody else.
The small business owner isn’t focusing on the qualities of the accounting solution or how it impacts their accounting professional’s processes – they are focusing on monthly price of the solution. Accounting professionals are now recognizing that the software isn’t (or shouldn’t be) the basis for their practices, it is simply a tool. And there are a LOT of tools available to work with, not just QuickBooks, so the value of aligning solely with that solution is perhaps not as good an idea as it once was, but it is not gone. There is still a tremendous volume of work to be done with businesses using the QB desktop products – you just wouldn’t know it from the marketing hype around QBO.
The thrill of exploring SaaS (software-as-a-service) and online application models has introduced new competition in markets where the dominant player once felt secure (small business accounting, for example). While Intuit’s QuickBooks products were a defacto standard and essentially owned the smb accounting market, the diminished response to the QBO product has created opportunity for many newcomers. Xero, for example, has been able to make great progress, even recruiting long-standing QB ProAdvisors as Xero advisors and promoters. gnuCash, once a bit of an outlier, is getting new business because it IS desktop based (some people like that!) yet it doesn’t require an an ongoing commitment to internet connectivity or to pay fees to the developer. NolaPro, Wave, Freshbooks and more are growing in popularity as more freelancers and small business owners begin using applications other than spreadsheets to manage their business finances. The generation that grew up with online banking is now readily adopting computerized bookkeeping, but they aren’t necessarily interested in QBO. Still, a great many move to QuickBooks desktop editions because QBD is a recognized and respected solution.
It also remains to be seen what happens with usage of some of these online smb accounting solutions when the business reaches some size or complexity. While they may be highly useful for startup or freelance business, many are not likely to satisfy business requirements far into the business lifecycle. This is when the going concern and growing business demands more functionality and performance, which often becomes the catalyst for seeking faster and more powerful software and systems and has been a driving force for businesses returning to locally-installed or hosted accounting and ERP solutions. Along with QuickBooks desktop editions, Sage is positioned extremely well here. The Sage 50 solutions (good old Peachtree!) can scale and also have very strong accounting functionality. These were actually the preferred solutions for most accounting pros for a time, but the momentum of QuickBooks pushed them to the side. With the attempt to now leverage the QB user base to the QB Online solution, Intuit has created the opportunity for Sage to regain a position with accounting professionals and their clients who demand more.
As these software and systems have (in some part) migrated from the local infrastructure to the web, we have also seen a lot of hybrid or “tweener” approaches come about. These approaches, just as cloud service of any type, come in many varieties and exist to solve different problems. The problem of browser-based functionality and modality is among the issues identified with QBO. The browser-based app doesn’t allow for multiple operating windows – you have to use browser functionality for that. And it is relatively slow – performing data updates and screen refreshes like with a website and not as one would require of a business application. The solution provided is a great example of a hybrid approach. The desktop app for QuickBooks Online (yeah) is a software app that comes in a flavor for Windows and Mac, and which provides more of a desktop user experience even though it mimics the interface and connects to the data of QBO. It is faster, and multiple windows can be used, and more… which are some of the great benefits of running software on the local device and why desktop software is so great a performer. This hybrid model simply allows for desktop software to work with cloud-stored data and back-end processes, and potentially delivers some of the best of both technology models: cloud and localized.
If you consider how much of the actual QuickBooks desktop product has been turned into web service (payroll, merchant processing, etc), it seems like QuickBooks desktop is already beginning to be a bit of a hybrid approach. And when QB desktop is run with a hosting service provider, the whole thing becomes available anytime/anywhere. Hosting is the way to provide the management and mobility aspects of QuickBooks and other desktop software. The hosting model delivers benefits of cloud service – providing users with all the features and functionality of the desktop solution – and introduces the system management and mobility that is part of the underlying value of a web-based or SaaS application approach.
The real discussion, I believe, is not about the death or near death of the desktop and locally installed applications – that’s just silly. Even phones are now being touted as possible desktop replacements, as the processing and storage capacity has increased to rival the most useful portables and laptops. Clearly, devices continue to be more powerful and capable, and these advancements aren’t done solely to make web browsing more enjoyable.
Devices are more powerful so that they can run more applications – fast – and deliver more useful functionality to the user. Maybe the data will be in a cloud, and maybe even some app functionality will be delivered via a cloud, but it is very unlikely that everything will be in the cloud. Complexity and cost drove developers to seek out alternatives, and advancements in technology will introduce new options that change everyone’s thinking again. While the pendulum did swing to one extreme (move it all to the cloud and off the device!), we are now seeing it swing back in the other direction a bit and those who didn’t swing all the way the first time are in a position to reap some benefit.