At least two people contacted me recently to ask about "Hosted QuickBooks," so here's a brief article on the difference between the Commercial and Standard hosting companies authorized by Intuit. I have also provided a list of things to research when considering a hosting company or environment.
While the descriptive material regarding the Intuit authorized hosting versions contained herein has been adapted from content found on the official Intuit Hosting Program website, the factors to consider are all mine.
There are two versions of QuickBooks Hosting authorized by Intuit, Commercial hosts and Standard hosts:
Commercial Hosts are independent professional data centers and remote hosting companies that provide application hosting services to QuickBooks end users, including accountants, bookkeepers, small businesses, and other entities. These end users are ones who wish to access and use their licensed QuickBooks desktop software via a remote hosting facility. Commercial Hosts can host either a users’ own "licensed QuickBooks software" or QuickBooks software provided by the host as part of the overall hosting subscription.
Intuit (Intuit Hosting Program)
Intuit Commercial Hosts
Commercial Hosts have undergone an application process that includes meeting certain minimum requirements and, if selected, they enter into a licensing and distribution agreement with Intuit. Intuit does not provide instructions or guidance on how the hosting environment should be set up or managed.
Commercial Hosts collect and pay a monthly user fee for each hosted user of an existing QuickBooks license, referred to as "bring your own license." In addition, commercial hosts can arrange licensing of QuickBooks products on a monthly subscription basis as part of their overall monthly hosting fees to the end user.
Standard Hosts are also independent professional data centers and remote hosting companies that provide hosting services for end users, including accountants, bookkeepers, small businesses, and other entities. These end users are ones who wish to access and use their "own" licensed QuickBooks desktop software via a remote hosting facility.
This contrasts from commercial hosts who can actually offer the software as part of their overall monthly hosting service. Standard hosts can only host copies of the user’s licensed software.
Intuit (Intuit Hosting Program)
Intuit Standard Hosts
Standard Hosts are solely responsible for the security, privacy and availability of its hosting services, even though Intuit may require an independent third-party security review and accreditation for each selected host. Intuit does not certify, sponsor or guarantee host's services.
Standard Hosts are required to have a separate written agreement with each of their customers who governs the hosting services and the manner of use of the user’s licensed QuickBooks software in the Standard Host’s environment.
Factors to Consider Regarding Hosting
Hosting Environment
Many hosting companies offer "Hosted QuickBooks" – an arrangement in which multiple customers and their QuickBooks files share a common computing environment. While "network security" limits each customer and user to their own QuickBooks files, the common environment means you're sharing machine resources and typically the same QuickBooks Database server.
Obviously, in this environment, total computer resources, number of users and number of files being supported can significantly impact the speed at which data can be delivered to each user.
Most hosting companies also offer "dedicated (virtual) server" environments in which your QuickBooks will operate. Each "virtual machine" may act like a self-standing computer; however, in most cases, the virtual machine that's dedicated solely to one customer is still part of the bigger "physical server."
While virtual machines will have a specified amount of disc space and memory dedicated to them, the limitations of the overall environment that can be impacted on the number of virtual servers within the physical machine, and the overall resources can again limit performance.
Some hosting companies offer "dedicated (physical) servers," which is sometimes referred to as "rack space." In many instances, hosting companies require the customer to provide support for what goes on inside these servers, while the hosting company is responsible for the infrastructure supporting theses machines.
Performance
Obviously, the hosting environment can and will impact performance, which is generally referred to by most people as "speed." If a hosting companies data storage is reliant upon rack after rack of clustered SCSI hard drives, the performance will be significantly less than a computing environment made up exclusively of solid-state drives.
Internet service at both ends of the equation is essential. With rare exception, internet speeds are slower than internal networks running at 1 GBPS or faster. If the internet connection leaving your office is slow, you can expect your hosted QuickBooks to run slower than it did on your own server.
This means you may need to upgrade to the fastest internet access you can obtain at your primary work location. Obviously, if users are working from home or in the field, their internet service will significantly impact performance.
At the hosting companies end, they'll generally have the greatest internet speed available, but bandwidth to support all of the connections for their customers becomes of paramount performance. Another consideration is "backup" internet access. What provisions does the host have if their primary internet provider is down for any period of time?
Reliability
You must look at the history of a hosting company in terms of its up-time and down-time. What it says in the brochure is one thing, you need to have them document in the service proposal exactly what its historical reliability measures have been. Generally, you should require a guarantee of reliability equal to its historical measure or better.
Support
One reason people go to hosting is to eliminate the requirement for self-support, or contracting with an IT management company to support internal servers and other network hardware. While almost all hosting companies provide 24/365 technical support in terms of operational requirements, many only offer support for not-technical issues during routine, Monday through Friday business hours.
If you have a QuickBooks issue on a Saturday afternoon, not related to hardware or access, will your hosting company be ready to assist you, or will you be punting until Monday morning?
Integration Support
Many QuickBooks desktop product users rely upon third-party software that integrates with QuickBooks. Everything from Microsoft Word and Excel, to very specialized products that are designed to exchange data with QuickBooks.
While almost every hosting company will work with the standard applications like Word and Excel, many simply will not host other third-party apps, especially those of a highly specialized nature. Even if they do support such applications, does your contract for hosting have to be re-negotiated with each new application you add, or each application you abandon?
Security
While most hosting companies make a big deal about their hardened data centers being able to resist a tornado, earthquake, hurricane and such, the rarity of such events is not really the concern when it comes to your data. What' important are things like secure electrical service, including standby emergency generators, coupled with battery-backup so that there's no interruption in electrical power to the computing environment.
I already mentioned internet access and backup, but as part of considering internet access, the most important security concern of all must be of prime concern – and that's cyber threat protection. With a rash of cyber attacks upon supposedly secure data centers hosting computing services for major corporations as well as small business QuickBooks files, any hosting company being considered must not only have perfect track record, but also the most modernized approach to cyber security.
Backup is another security issue, and not just for the data, but for the operation as a whole. What happens if the data center does in fact go down? Where is your data, and in how many redundant data centers is your data and accessibility existent? What is your recourse for access?
Cost and Contract
While this seems to be one of the most significant points of consideration for many hosted customers, for the most part, there is very little difference in cost from one hosting operation to the next when you actually compare apples to apples and oranges to oranges.
While some hosts offer open-ended pay-as-you-go monthly services, other will require a one-year or longer contract. If you contract for service, be sure you understand what rights you have with respect to termination and/or non-renewal, especially in cases where your hosted service simply doesn't measure up.
Try before you Buy
You wouldn't buy a new car (or a used one, for that matter) without giving it at least a test drive. Chances are you didn't purchase that car without trying different makes and models from different dealerships.
The same principle should apply when it comes to hosting companies. If a hosting company won't give you at least a 15-day (or two-week) trial to evaluate the service you're looking at, find a host that will. And just don't try it out, test it out. Fake a customer support issue to see how customer and technical support will work with you.
Shop around, and not just for price. Give several different hosting companies a trial with the intent of letting them earn your business.
Lastly, network with your fellow QuickBooks professionals. What experiences have they, or their clients, had with XYZ hosting? Which companies held true to their word, and which did not? Which hosts failed to provide adequate support, or protect data?
Because unlike a new car, there is no 'lemon law' to protect you from hosting companies, when things go bad, you will just end up with a sour taste for hosting as a whole.
Editor's Afterthought - We didn't mention any specific hosting providers in our content. The graphics provided in this article came from the Intuit Hosting Program website. Insightful Accountant doesn't endorse or recommend any specific hosting provider nor deny that other hosting companies might offer services other than those shown by Intuit in these illustrations.