Revised:  5 April 2012

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A QuickBooks hosting service or QuickBooks Online...which should I choose?

by: Mark Wilsdorf
(mrw@goflagship.com)
Flagship Technologies, Inc.
http://www.goflagship.com

Contents

 
If you've chosen to use QuickBooks as your accounting system, there's at least one more decision to make:  will you use a desktop installation of QuickBooks--where the QuickBooks program is installed on your own computer or network--or an online version, in which case QuickBooks is installed on a server computer somewhere on the Internet? 

Even if you've been using QuickBooks on the desktop for years, there are advantages (and disadvantages) worth considering, for accessing QuickBooks online. That's the purpose of this article:  we'll take a brief look at what's involved in using QuickBooks via an Internet connection, what your options are for online access, and hopefully shed enough light on the pros and cons of the options available to you, to help you make an informed decision.

Note:  this is a companion article to:  Do I need Quicken or QuickBooks? QuickBooks Pro or Premier? An Online version or hosted access?, found here:  http://www.goflagship.com/articles/ckgen1.htm. 

A quick update note (5 April 2012):  When I originally wrote this article I was not convinced Intuit had a sincere, long-run commitment to QuickBooks Online (QBOL), and my comments below reflect that opinion. Since then however, I've seen evidence of a renewed commitment from Intuit to QBOL in the form of several improvements. OBOL is still a considerably different product from the desktop versions of QuickBooks, and has lesser capabilities in some areas; however, a number of features have been improved or enhanced, making it a more viable alternative to the desktop versions (hosted or not). Someday I'll do a full rewrite of this article to explain the changes. For now, just understand that I'm "less negative" with respect to QBOL. For a good overview on recent QBOL changes/improvements see Stacy Kildal's blog article, Have You Used QuickBooks Online Lately? at Sleeter.com.

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What is QuickBooks hosting?

A software application's host is the computer where that software is executed or "run". The term  generally applies to software running on a network of some kind:  you may be accessing (using or operating) the application from your computer but it's actually running on another computer somewhere across the network. That other computer is referred to as a server in this case, because it is "serving" the software or data to your computer.

With QuickBooks hosting you can pay a company--a hosting service--a monthly fee to maintain a copy of a desktop edition of QuickBooks on their server and give you access to it from across the Internet. Your QuickBooks data is secured from unauthorized access, by the fact that anyone using it must log into your area (folder or directory) on the hosting company's server, using your private user ID and password.

With hosting, you can use QuickBooks almost exactly as if it were installed on your computer. But you're really using it across a network:  the Internet is the network that provides the connection between your computer and the server.

How do you find vendors of QuickBooks hosting services? Intuit maintains a list of certified Commercial hosts on its Web site. Go to www.quickbooks.com/franchisesolutions, then click on Intuit Hosting Program.

How application hosting works Online hosting is a possibility for many software applications, not just QuickBooks. While there are minor differences in the way hosting vendors provide access to an application, here are the basics. Choose a hosting service. Hundreds of companies provide hosting services, so they're easy to find. Only a handful are certified to host QuickBooks though. (See Intuit's list, mentioned above.)   Purchase or lease a license for the software you'll be using via hosting. If you already have a license (for example, a license for a desktop version of QuickBooks) that will usually be fine. In some cases you'll be able to lease a software license, paying a monthly or annual fee instead of buying the software up front.   Sign up for an account with the hosting service. You'll provide them with your software license information (or agree to rent licenses), payment details, and so on, and you'll be given the account information necessary for accessing your assigned file folder area on their server--a user ID and password, connection instructions, etc.   (Sometimes) provide the installer for your software to the hosting service. You may or may not need to do this for QuickBooks-- the hosting service may already your version of have QuickBooks available to install. But if you want to use a third-party add-on with QuickBooks, you'll likely may have to send them the installer for that software...unless they allow you to install the software yourself, via your hosting connection.   Log in to your account, and you should be ready to get to work!

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What is QuickBooks Online (QBOL)?

QuickBooks Online--let's call it QBOL--is a version of QuickBooks designed for access over the Internet. (It's from Intuit, the developer of all QuickBooks software products.) QBOL has features nearly identical to desktop editions, with slight differences here and there. 

Signing up for a QBOL account and paying Intuit a monthly subscription fee gets you access to QBOL, where you can enter transactions, add customers and vendors, get reports, and so on--similar to the things you can do in a desktop edition of QuickBooks. QBOL "runs" inside any Web browser, like Internet Explorer, Firefox, or Google Chrome. So you can access your QuickBooks records from essentially any computer with an Internet connection.

Like any online service which stores private data, your QuickBooks data is protected from unauthorized access by the fact that you must log in to the QBOL server using your personal account information (user ID and password).

By the way, the term "hosting service" also applies to Intuit, because QBOL is hosted on their servers (Intuit is the only source for it). Intuit does not currently offer hosting for desktop editions of QuickBooks.

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Why would anyone want to use QuickBooks via the Internet?

Working with QuickBooks across an Internet connection may appear to make little sense at first. It typically involves fees of $20 to $50 or more per month, which you could avoid by just installing QuickBooks on your own computer. But there are a number of advantages, so let's take a look at some of them. 

• Access to QuickBooks from anywhere.  You'll have the ability to access your accounting records, enter transactions, print reports, and so on, from virtually anywhere--anywhere there's a computer connected to the Internet, that is.
   

• Multi-user access. You can be at home, and your employees or a partner can be at the office or in another city, and all of you can be working in QuickBooks. All that each of you needs is a computer, an Internet connection, and the account information required for logging in to your online QuickBooks account.
   

• Reduced hardware costs (sometimes).  Small businesses who need to give more employees access to QuickBooks may be able to avoid spending to expand their network--and the time and costs involved in maintaining a larger network--because the Internet "is" the network when you access QuickBooks online. Small businesses which aren't networked may be able to do without setting up a network altogether, or at least postpone that expense for a while.
  

• Reduced software maintenance costs.  When someone else hosts QuickBooks you avoid the time and effort involved in (1) installing QuickBooks, (2) applying QuickBooks software updates, (3) solving software problems that may crop up such as having to re-install QuickBooks due to a hard drive crash or a corrupted program file. You can "wash your hands" of those jobs, because they become the responsibility of the hosting provider--whether that is Intuit or a third-party hosting company.
   

• Daily backups.  Every hosting service I know of provides at least daily backups of your data. If you're like most people--who don't get backups made as frequently as they should be--having someone else responsible for making and keeping multiple sets of daily backups would be a significant boost in the security of your accounting data. Or if you are someone who is diligent about making backups, having someone else do it should save you time.
   

• Professional software support. Something not working right? ...Can't access QuickBooks? ...then email or call the hosting provider. Part of what you're paying them for is access to their support personnel who can solve problems with the software or access your account, can restore data from backups for you, and such.
    

• Lower up-front cost. Both QBOL and QuickBooks hosting with a leased QuickBooks license (discussed later) are "pay as you go" plans. Instead of purchasing a copy of QuickBooks you just pay a monthly fee.
   

Risks and trade-offs

Around every silver lining, somewhere there's a cloud:  using QuickBooks via an Internet connection is not without some trade-offs. Whenever you put something as sensitive and mission-critical as your accounting data on a public server, additional risks are involved--risks which, in fact, are shared by nearly all forms of "computing in the cloud":

• Cost. I've already mentioned that using an online version of QuickBooks can be expensive. Those monthly fees add up in a hurry, making online access typically more expensive than installing and using QuickBooks on your own computer or network. Any technology that has significant potential benefits usually involves significant costs.
   
• Speed. Using QuickBooks over an Internet connection can be a bit sluggish, though not always. Speed of your Internet connection, time of day, and other factors are involved, but a desktop installation of QuickBooks will always be fastest.
   
  Using QuickBooks via a hosting service can be surprisingly fast, because the hosting software is based on technologies (Citrix or Windows Terminal Server) optimized for speed in delivering programs over a remote (Internet) connection. QBOL is usually much slower because it operates within your Web browser, at the same speed as any other Web page. 
   
• Data access security. Let's face it, security is never perfect. Your own computer or network may not be as secure as you would wish, and probably is not secure as you think it is. But at least with your own system you are in control:  you can limit access to trusted employees or partners, you control who has access to data backups, and so on. For most small businesses, even if your computer or network were victimized by mal-ware or a cyber attack, the likelihood that the hacker would specifically target your QuickBooks accounting data is very small.
   
  Contrast that situation with having hundreds or thousands of QuickBooks company files hosted on single publicly accessible server, by either QBOL or a hosting service. Though high-grade security measures should be in place to protect your data, all you can really do is hope and trust that the service provider has implemented the level of security they claim.

• Data loss protection. Once your data is hosted "somewhere in the cloud" you may give up direct control over protecting it from loss, though that isn't always so. Usually you have to trust that the hosting provider is performing daily data backups as they claim to be. If you use a QuickBooks hosting service you should be allowed to download a backup of your QuickBooks data to store locally, giving your some additional protection. With QBOL, you can export your online data to have a copy on your local PC or elsewhere. (Note that because QBOL's features are not identical to desktop editions, data exported from QBOL is not 100% compatible if you should need to load it into a desktop copy QuickBooks. Still, most of your important data will be intact.)
   

• Accessibility of your programs and data. If your hosting provider's servers go down (aren't accessible due to malfunction, etc.) or your local Internet connection goes down, you cannot access QuickBooks. Most hosts have systems in place (server redundancy, hard drive mirroring, backup power systems) to minimize the length of outages, but they do occur. Vendors have different track records for outages, so choosing the right vendor helps in this regard. If the potential for a day-long server outage sounds scary, think back to the most recent outage you've had with your own computer or network:  it's not uncommon for users to be without their computers for a day or more due to a virus, a hardware crash, or other problem. The difference is that with your data hosted by someone else, you have no 
   
  What I'm suggesting here is that professionally-run hosting service may be no less reliable in terms of uptime than are the computer systems of individual users and small businesses. 
   

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QuickBooks hosting:  things to consider...

Features of different vendors' QuickBooks hosting services vary. Here are a few things to consider or ask about when comparing hosting plans.

• Which type of host, Commercial or Self? These two types of QuickBooks hosts are defined by Intuit.
   
  Commercial hosts undergo a rigorous certification process, while Self hosts do not. The Self hosting program is designed so that QuickBooks Pro Advisors and QuickBooks Solution Providers may provide hosting services to their clients. For instance if your CPA or tax preparer is a certified QuickBooks Pro Advisor, he or she could provide hosting services to you and to other clients.
   
  There's nothing particularly "good" or "bad" about either type of host. Commercial hosts tend to offer a broader range of hosting-related services--they might be willing to host many different kinds of software products for you, such as the Microsoft Office suite. And because they are certified by Intuit they may offer better data security and safeguards against data loss, and a higher level of support for their customers...but there's no guarantee of that.
   
  Self hosts may perform just as well in these areas, though without certification the quality of the services they provide is likely to be more variable. But if you trust a CPA firm to do your taxes, you'll likely be comfortable with trusting them to host your QuickBooks data as well. And because their business relationship with you is based on more than just providing hosting services--they provide accounting services and advisement--Self hosts are likely to offer additional, unique services which Commercial hosts do not. For instance a CPA firm might offer data entry services (say, entering QuickBooks transactions from paper sales tickets each week), monthly reconciliation and reporting, or other services based on having easy access to your QuickBooks data files and accounting records. 
   
• Capacity. Hosting plans can vary in the amount of disk space, memory, and Internet traffic provided. Generally, more is better in all of these areas, but there's no reason to purchase a more expensive plan if you don't need it. Most vendors will let you start with a lower-cost plan, then upgrade to a higher-capacity plan later if needed.
   
• Uptime. Ask how frequently their servers are down for any reason, and what their longest server outage has been in the past year. Some can supply you with a detailed uptime report, and their service agreement may even guarantee a minimum level of uptime (percentage of the time you'll be able to access your data on their servers).
   
• Server redundancy, mirroring, disaster recovery. If the server which is hosting your QuickBooks account goes offline (their computers crash too!), do they have a redundant server that will be switched to automatically or within a short while? Does their storage system use mirroring? Mirroring means that every change you make--every QuickBooks transaction--is automatically duplicated on at least one additional hard drive, so if the primary hard drive develops problems, a mirrored drive can be switched to with little or no loss of data. What is their disaster recovery plan in case their data center is hit by a tornado, fire, flood, or long power outage?
   
  If timely access to your accounting data is crucial--maybe you enter and print invoices while the customer is standing there in front of you at the sales counter--then it's worth paying more for hosting services that offer server redundancy, mirroring, and guaranteed uptime.
   
• Backup frequency, retention, offsite backups. Every hosting vendor I know of provides at least daily data backups as part of their hosting plan. If the vendor also offers mirroring (see above) that's even better:  if there's a server or data problem you may only lose the previous couple accounting entries rather than an entire day's worth. How long do they keep backups? If you have a major data or accounting error that calls for restoring your data file to its state as of three weeks ago, will it be available? Ninety days is adequate for most situations, but longer is always better. Do they keep backup sets at multiple physical locations (different sites). Having backups at at least two locations is critical for protecting your valuable accounting data from loss.

• Owned vs. leased licenses. As I said earlier, the hosting service will be giving you access to a desktop edition of QuickBooks. But Intuit doesn't give away free access to their software:  you have to use a licensed copy...somebody has to pay for that!
   
  If you already own a copy of QuickBooks, you can provide your QuickBooks license information to the hosting company and they can legally install that version of QuickBooks in your area of their server. If your license is for QuickBooks 2010 Pro, that's what they will provide.
   
  If you don't own a copy of QuickBooks or want to use a newer version, some hosts give you the option of using a leased license. They'll install a current, licensed copy of QuickBooks in your area of their server, and you'll pay an additional monthly fee for using it. The cost may be roughly $10 - $30 per month depending on which QuickBooks version you are leasing and whether you want access to extra-cost features like payroll. Leased licenses aren't cheap, but their cost needs to be weighed against:

1. The flexibility of not having a fixed investment in software. You could try QuickBooks for a couple months, then decide it's not for you and switch to some other accounting product.
2. Avoidance of software upgrade costs. A leased license always gives you access to the most current version of QuickBooks. If you own a QuickBooks license though, you'll have to pay Intuit's fee if you want to upgrade annually. (It's worth noting that many users of desktop editions of QuickBooks don't upgrade every year. So the amount saved will vary, depending on how often you would normally upgrade your QuickBooks license.) 
3. Cash flow benefits. Obviously, paying by the month is easier on cash flow than the larger up-front cost of buying a QuickBooks license.

• Setup fees. Some vendors charge setup fees. That's understandable, because there's work involved in getting your account set up, verifying your software licenses, and installing software that you provide to them. But high setup fees are at least partly about deterring you from switching to a different vendor (because of the amount you already have "invested"). Just be sure you know what the setup fees are before you sign a service agreement or provide your credit card number.
   
• Monthly service fee. There's a wide range here, so compare several vendors' prices. Fees start in the range of $25 to $50 per month but can be much higher. When comparing vendors, be sure you understand what you're actually getting:  a higher-priced hosting service may be offering a higher level of service or data protection.
   
• Software add-ons hosting. Many hosting vendors will also host any QuickBooks add-on software you use, such as my company's products (sorry, I couldn't resist including just one little "commercial"). Be sure to ask what their policies and limitations are for installing and hosting your add-ons on their server. That's true even if you don't yet use any QuickBooks add-ons, because someday you may want to.

 

 

• Is a free trial available? Many vendors will let you try their hosting service for free for up to 30 days. If you need a QuickBooks leased license during the free trial though, you may have to pay a fee for that.

If you want details on QuickBooks hosting programs from Intuit's perspective, have a look at their QuickBooks Hosting Program FAQ.

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QBOL:  things to consider...

With QBOL there's no need to compare services offered by different vendors, because Intuit is the only provider! Only a few different options exist:

• Monthly fee. Several QBOL service plans are available ranging from minimal (Simple Start) to full featured (Online Plus), and with or without payroll capability. (Payroll is an extra-fee feature in QBOL, but the same is true of desktop editions). As this is written, the plans range in price from $12.95 to $78.95 per month. On the lower end, especially, QBOL is less expensive than using a hosted version of QuickBooks.
   
• Number of simultaneous users. QBOL service plans allow different numbers of simultaneous users, currently ranging from 1 user for the lowest-priced plan to 5 users for higher-priced plans.
   
• Is a free trial available? Yes. You can try any of the QBOL editions free for 30 days.

I won't spend time talking about data security, backups, etc. here. The same considerations as I described for hosting services apply to QBOL, so review that discussion for ideas about questions to ask if you consider signing up for QBOL.

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Pros and cons

Now you've gotten to the part of this article that's mostly opinion--mine, of course. By this point you're probably eager to hear somebody's opinion, to help cut through the clutter of possibilities you face for online access to QuickBooks. So I offer my opinions hoping they'll shed some light on the range of specifications, alternatives, and hype you'll encounter as you decide what's right for you.

First, understand that using a desktop version of QuickBooks on your own computer or network is still the fastest, most convenient, and most viable alternative for the bulk of QuickBooks users. It also offers the best benefit/cost ratio (biggest bang for the buck) for the way most businesses currently want to use QuickBooks. But if your business can gain real benefits from accessing QuickBooks across an Internet connection--and many can--then the monthly fee for QBOL or a hosted QuickBooks solution may be well worth the added cost.

Next, I need to tell you up front that I'm not a fan of QBOL. But let's start with a look at its positive points, then I'll finish up with its negatives and reasons why I feel QuickBooks hosting is usually a better choice.

First the positive...

Intuit doesn't publish sales figures so we can't know the number of subscriptions they currently have for QBOL. Most people in the industry will tell you that desktop editions still represents the lion's share of Intuit's QuickBooks customer base and new sales. But QBOL has been around for several years and some estimates put its subscription base at over 300,000. That user count alone should answer the basic question, "Is QBOL a viable and useable system?" with an absolute "Yes!". Here are some of the other positive points:

• Simultaneous users. With QBOL the number of simultaneous users permitted is built into the monthly fee. Because QuickBooks hosting is based on desktop editions of QuickBooks, you must buy a license for each additional user you want to allow. This can make QBOL's pricing a bit more attractive in some multi-user situations. 
   

• Smartphone access. QBOL may have slight an edge in accessibility when using "any" smartphone or similar device because it works through any Web browser. However the advantage is slight, because most hosting solutions also support access by the major smartphone operating systems. Many of the smartphone apps in Intuit's App Center (see the next item below) also work with QBOL. 
   

• Support by many cloud-based "apps".  The Intuit App Center (appcenter.intuit.com) is the best place to find cloud-based applications for QuickBooks, and many of them support QBOL.
   

• SDK-based QuickBooks add-on programs. QBOL works with many QuickBooks add-ons developed using the QuickBooks SDK, though not all. (QBOL requires an approach to accessing data that is slightly different from that used for desktop editions, and also has some data format differences, so not all developers undertake the extra programming required to make their applications compatible with QBOL.) If you currently use a QuickBooks add-on and want to switch to QBOL, chances are good that you may be able to continue using that add-on with QBOL (but check first to be sure).
   

• OK for new or inexperienced QuickBooks users? QBOL's features are more limited than those offered by desktop editions, and it implements some features differently. For these reasons, people experienced with the desktop editions are less likely to like QBOL. But those who haven't used a desktop edition of QuickBooks won't notice that anything is missing, and are more likely to be happy with QBOL.

Now for the negative...

At least part of QBOL's deficiencies relate to its history. It was Intuit's first attempt at online delivery of any QuickBooks accounting product. At the time QBOL was being developed and when it was first released, the technology for hosting desktop versions of software existed but was still in need of improvement--it hadn't fully "jelled" yet, at least not in the form that it exists today. Maybe more important, it wasn't yet in vogue as part of the information technology (IT) industry's view of what the Internet's future would look like.

But things change rapidly in IT. As more and more users began getting faster Internet connections, software which once seemed to slow to use across an Internet connection suddenly became fast enough for serious work. That's exactly what has made hosted desktop applications viable and appealing. Now hosted copies of QuickBooks, Microsoft Word, Microsoft Excel, and many other programs has almost the same feel as installing and using those programs on your own computer.

So where did this leave QBOL? It was, and continues to be, a slower, half-baked implementation of what every user of a desktop edition of QuickBooks experiences daily. Here's my list of QBOL negatives:

• Missing/changed features. Payroll works differently. Sales tax-related features are not as complete as in the desktop editions. In general, experienced users of desktop editions will see QBOL as missing some features they expect to see.
   
• Anomalies...bugs or "features"? While all software can have bugs, QBOL seems to have a larger than usual list of problems than the desktop editions:  Some reports don't work reliably. Account reconciliation can fail. It's possible to delete an account from the Chart of Accounts even if that account has been used in transactions (something that should never be possible!). By the time your read this, these may all be fixed. But then again, though QBOL has been around for years Intuit seems to have been tardy or lazy about paring down QBOL's list of problems to an acceptably small size.
   
• Speed of access (a lack of it). QBOL is usually much slower than using a hosting edition of desktop QuickBooks.
   

• Less efficient user interface (UI). Anyone familiar with desktop QuickBooks editions is accustomed to shortcut keystrokes, right-click menus, cursors that change shape, etc.--things that speed up program operation and contribute to ease of use. Since QBOL relies on the UI features available in a Web browser, it has not been written to support the same UI features found in the desktop editions--the Web browser acts like a layer of insulation that prevents experienced QuickBooks users from having many of the little ease-of-use features they're accustomed to.
   

• Server outages.  Intuit's record for server outages is abysmal. In 2010 and 2011 they had two outages which each lasted more than a day, as well as several multi-hour outages. Any hosting company with that kind of record would quickly lose customers to their competition. Few businesses will accept repeatedly being unable to perform normal daily business activities like enter or pay bills, look up customer information to answer billing and invoicing questions, or access other critical accounting records.
   
  Intuit has released public statements giving reasons for some of the outages, but as QuickBooks consultant Scott Gregory notes, the reason "really doesn't matter to the thousands of businesses that didn't have the ability to 'work anytime, anywhere' as the QuickBooks web site touts."
   
  The biggest concern is not that these outages happened, but that Intuit apparently doesn't have its data center set up to prevent or at least minimize them. Well-designed data centers have redundant servers or at least redundant data storage, also known as mirroring. As described earlier, mirroring means that an identical copy of everything written to a computer's storage system also gets written to one or more additional hard drives. And a redundant server is simply a backup computer ready to be brought online if there's a failure in any of the servers that are currently online. (The switch to a backup server may happen automatically when a fault is detected by monitoring software; or it may be done manually, but in any case it should occur in a short while.)
   
• Data portability. Once you are on QBOL it is now possible to export your QuickBooks records back into a file that's readable by a desktop edition of QuickBooks. (Until recently, even this wasn't possible.) But QBOL's differences from desktop editions mean you cannot freely move data back and forth between desktop editions and QBOL. So the data backup you create by exporting your QBOL data is more for peace of mind than anything else. In a true emergency, you'd be able to import your transactions and lists into a desktop edition; there would be some loss of information, but most of the data would be intact.
   

• Fewer SDK-based QuickBooks add-ons. I mentioned this earlier:  not all SDK-based add-ons support QBOL. It all depends on whether the add-on's developer decided to make it compatible with QBOL or not.
   

• Not widely recommended by accounting professionals. Assemble any random group of QuickBooks Professional Advisors in a room and ask for a show of hands to indicate how many of them recommend QBOL to their clients, and probably fewer than one-fourth of them will raise their hands. This is not to say that they won't provide support to a client who uses QBOL, just that most of them avoid getting clients started on QBOL. 
   
  Why? Because most are aware of the QBOL problems I've mentioned here, and many have experienced the frustration of dealing with those problems first hand. 

Other thoughts

QuickBooks licenses:  pay by the month, or not?  In most situations, owning a QuickBooks license is more cost effective than paying the monthly fee for QBOL or for a leased QuickBooks license (provided through a hosting service). Before you get too thrilled at the prospect of paying "just a little bit" each month, multiply the monthly fee by 12 to consider how much it will cost per year--it'll be a little more scary when you look at the total annual cost. With QBOL you can't avoid paying by the month, because that's the only way it is offered. But if you choose to use a QuickBooks hosting service, purchasing a QuickBooks license may be the best way to go.

Of course, using QuickBooks on a pay-as-you-go plan can make good business sense in the right situation. But for that to be true the added flexibility, avoidance of upgrade fees, and easier cash flow management (all described elsewhere in this article) have to produce real value--benefits that improve your profitability. I believe many people overestimate the value of these benefits out of laziness:  making monthly payments is easy and relatively painless.

When you have a choice between pay-as-you-go software pricing and the higher up-front cost of buying a software license, buying a license will usually cost less in the long run. This statement cannot really be generalized across all types of software; however, it's often true for mass-market products like QuickBooks.

So when is paying monthly for software licenses the better choice? Usually it's best as a short-run strategy in the face of uncertainty. If you are not sure you will stay with QuickBooks and just want to try it for a few months, by all means consider a leased license--you can always buy a QuickBooks license later, once you're sure. Or if cash flow is especially tight, it may make sense to make monthly payments now and buy a license sometime in the future.

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And now, the crystal ball stuff...

If the section above is mostly my opinion, this one is even worse:  it contains not just my opinions but also my predictions about a few things. (Run away! Save yourself!)

QBOL and hosted QuickBooks are "cloud-based" solutions:  they are software services (programs) hosted on someone else's computer somewhere on the Internet. But at this point QBOL is not especially well implemented or managed; QuickBooks hosting seems to be the faster, more full-featured, and more reliable choice.

My personal feeling is that, over time, QuickBooks Online will change. (Wow, is this guy bright or what? He's predicting that things will change!) More specifically, I mean that one of two things is likely. Either:  (1) QBOL will be enhanced to the point of being equal to desktop editions--which would only be possible with a significant rewrite or upgrade of the QBOL software, improvements in Intuit's data center, etc.-- or (2) there will be enough growth in hosted access to desktop editions of QuickBooks that QBOL will eventually fade away.

At this point I believe the second event is more likely. By "fade away" I mean Intuit will starve QBOL for development resources, and that will cause the slow demise of QBOL. With a slowdown in the release of QBOL fixes and new features, other accounting software choices will grow ever more appealing. The eventual result would be a slow erosion in QBOL's user base, as most leave in favor of other products, including hosted desktop editions of QuickBooks.

As with any new technology, there's a lot of money to be made at this early stage in the push toward cloud computing. And where there's money to be made by competing products or ideas there's bound to be some hype generated. The goal of it is to increase revenue by getting consumers to discard their "old" technology and spend big on the new one; in this case, the hype involves telling everyone that cloud computing is "the next big thing" and it's "what everyone will be using soon...don't miss the boat!" 

The truth is that cloud computing is like any other technology or tool:  it's an improvement for some kinds of jobs, and for others it is either too costly, or a poor fit, or has other negatives like the data security vulnerabilities I've mentioned. With this in mind my final prediction is that QuickBooks will continue to thrive as a desktop and local-network computing product. The growth in QuickBooks hosting (of desktop editions) makes that view of QuickBooks' near future even more secure.

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For more information

Have questions or want to discuss points from this article? Visit our user forums and post your question or topic there, and let's talk about it.

For detailed information on QuickBooks features, versions, and pricing, visit www.QuickBooks.com.

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