Dude, Where’s My Cloud?

Millions of small businesses use Intuit’s Quickbooks accounting software. It’s clearly the market leader in small business accounting.

In the past few years the company has been moving to online services, including Quickbooks Online, a “software-as-a-service” offering that allows businesses to access their accounting data from anywhere with no software to install, no data file to back up, no updates to install, etc.

The company offers similar “hosted” services handling small business payroll, accountant services, and tax processing.

Intuit reports that about 24 hours ago a power failure occurred during planned maintenance work, starting with their San Diego data center. My conjecture is that there were some concerns with corruption and data consistency as the changes were being made as the power outage hit.

The “cloud” has been down since then. First, a little background:

Why the cloud? From Intuit’s perspective

For Intuit the “move to the cloud” makes a lot of sense. Instead of relying on customers to buy Quickbooks every year (in my experience a 2 or 3-year buying cycle generally makes more sense) Intuit gets customers to sign up and provide a credit card on a monthly basis. This ensures a recurring revenue stream for Intuit.

This also makes support easier in most cases, as everybody on Quickbooks Online is on the same version, running the same up-to-date code. And far fewer problems with data storage, network database performance, and file permissions.

Why it’s good for the customer

The benefits for the customer are much the same:

  • customers always run the most up-to-date version with fixes and security updates
  • customers don’t need to worry about managing their data files, updating Quickbooks, or dealing with network administration.
  • customers can access their Quickbooks Online data from any internet connection. Office internet down? Go to the nearest Starbucks or McDonalds.
  • Predictable costs. You know what the monthly cost will be.

QBO Down! OMG! WTFN?

But what happens when your hosted service goes down? Whether it’s planned maintenance, widespread power failures, major Internet routing problems (more common than most people know), or a software glich, bad things CAN happen.

It’s nice to know that you can run to a local wifi hotspot and get to your credit card processor…but what happens when you’re ready for business and they’re the broken link?

A few thoughts:

  1. If you had an on-site server you would have a finite amount of downtime for patching, updates, maintenance, hardware failures, software problems, internet outages, etc.
  2. Your business needs an emergency plan in place before a crisis hits. During the outage, my sources indicate that they were able to call the Intuit Merchant Center and Payroll Processing departments and process transactions over the phone.
  3. Consider your options before you jump into (or out of) hosted services. If you’re spending money the moment it hits your account, can’t live for 1-2 days without invoicing or accessing your data, then the hosted solution may not be the best for you. (neither is a single PC or small business network.) Don’t expect Intuit to pay your overdraft fees, late fees, or pay you back for lost business because their site was down. They’ll give you a month or two free, apologize profusely, and hopefully improve their stuff. But their business frankly isn’t on the line; yours is.
  4. Marketing copy (and marketers) will always overstate the reliability of their services. I worked in Managed Hosting Services for a very large company for several years (in no way related to Intuit). We were a top-notch but small group, with no control over the Internet and at the mercy of our hardware vendors.

Bottom line? It’s my opinion that hosted services (including Quickbooks Online) are still a good value for most small business clients, and on the whole are as reliable as in-office server and desktop software.

But like any major business decision it’s critical to weigh the different options, understand what you’re getting, and have a plan of action in place before bad things happen.

Want to discuss business tech options? Trying to decide between on-site and in-house solutions? Contact Charland Technology today!

Full disclosure: Gregory Charland is a Quickbooks ProAdvisor specializing in Quickbooks installation, migration, and support.

Second Thought: On re-reading this, I’ll concede to being a bit soft on Intuit. Let me make this clear: Intuit needs to do better and make their services more reliable. They NEED to have redundancy and ways to quickly bring backup resources online in a crisis like this. Thus the power of the monopoly comes into play: At the moment I don’t see a viable competitor to the Quickbooks line of products. I don’t think that’s a good thing.

However business owners still need to understand and take responsibility for their own decisions…financial, technical, and operational.

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Comments

  • Michael O'Connor Clarke  On June 17, 2010 at 12:13 am

    Solid, smart advice Greg. It’s good to read a well-balanced, thoughtful response to what has been a big hot-button issue.

    As you say, it’s really important to do the due diligence properly before deciding where you’re going to keep critical business information.

    Ask the tough questions: dig deep to see if your preferred vendor has any single points of failure in their redundancy and business continuity planning. And get good advice from someone with real experience (someone like…er… Charland Technology, perhaps).

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