QuickBooks

QuickBooks Desktop Is Alive and Well

Subscription, or Unit Sales?

One of my predictions earlier this year was that QuickBooks Pro and Premier would be switched over to a subscription-only basis in the US. It made sense to me! QuickBooks Enterprise is available only by subscription. QuickBooks Pro/Premier are available only by subscription in the UK. In Canada, those products are heading towards subscription-only basis. I know that Intuit prefers subscription sales over unit sales for their financial statements. It seemed obvious to me that this was the direction that Intuit wanted to go with QuickBooks Pro and Premier in the US.

However, Todd Stanley said that there are no current plans to change US sales of QuickBooks Pro and Premier to a subscription-only basis. At least not now. There may be some new subscription offerings that will entice people to move in that direction, but unit sales won’t be dropped in the US. The changes to subscription-only in Canada and the UK were marketing decisions for those particular geographies, and have no bearing on the US market.

On a side note, we can expect a price increase for QuickBooks Enterprise, which was announced to members of the Intuit Reseller Program recently.

QuickBooks Desktop Product Development

Intuit generally doesn’t talk about future product developments in the desktop environment. If they tell me something about what they are working on, I’m usually prevented from writing about it (until they are released) by a non-disclosure agreement. However, in my interview with Todd Stanley, I had some specific questions about the direction of QuickBooks on the desktop.

  • Intuit has made a big splash by acquiring TSheets (time management/reporting) and Exactor (sales tax) this year. While the main thrust of these acquisitions is their integration with QuickBooks Online, what about the desktop? Both of these products do have an integration with QuickBooks Desktop as add-on products, but will there be a closer integration in the future? Todd said that these kinds of integrations are worth investigating, but no timeframe has been set. It may be a question of “when” rather than “if.”
  • QuickBooks Desktop relies on a number of old technologies, some that may be difficult to get away from. How about removing reliance on products/services like Internet Explorer and Adobe Reader, both of which are required for certain functions in the desktop product? In this area, Todd said it was too soon to say what Intuit might do. Fair enough, those are tough issues to deal with, he isn’t ready to make a commitment on this.
  • As I mentioned earlier, Todd said that their main focus is on improving reliability of the product. Fixing data corruption issues, fixing bugs, improving installation issues. Which bugs? We didn’t get into that degree of detail, outside of general statements. I will note that (in my opinion), outside of issues like data corruption, everyone has a different list of must fix bugs. I have my list, my friend “Rustler” (from the Intuit Community forums) has a very different list, so deciding on which bugs are the most important ones may be tough for Intuit. I will note, however, that some significant bugs have been around for a long, long time.
  • It is clear that inventory management is going to be a big area of focus for QuickBooks Enterprise. We’ve already seen enhanced order fulfillment, which is a start of a series of significant improvements for inventory management (with barcoding). I expect to see a lot more advances in this area.

QuickBooks Add-On Products

I found it very interesting that Todd Stanley expressed, at several times in my interview with him, that add-on products are very important in the QuickBooks Desktop ecosystem.

There is a lot of room for improvement in support for add-on developers. Unfortunately, there are some restrictions – Intuit can’t toss out the current programming interface in favor of something that is newer and easier to work with. They tried that in the past, and it was a failure. Intuit has to maintain compatibility with the current programming interface so that they don’t toss out all the work that developers have done already.

What Intuit can do is to fix the bugs and fill in the gaps in the programming interface (QBSDK) that exist now. Add-on developers don’t have access to all of the QuickBooks desktop data as it stands now.

One interesting point that Todd brought up was that when considering the addition of a new feature, Intuit needed to look to see if there was a partner that satisfies that particular need already. If an add-on product is available to fulfill a need, then perhaps Intuit should work on something else. I find that very refreshing, because it gives developers some confidence that they won’t have the rug pulled out from under them. For example, in important areas like data import/export (Transaction Pro Importer and Exporter) and advanced reporting/business analytics (QQube and BizTools Analytics), excellent products already exist, so Intuit should work on other areas of improvement

QuickBooks Desktop Is Alive and Well

While I am painting a fairly rosy view of the future of QuickBooks Desktop, that doesn’t change one important thing. Intuit firmly believes that their future growth is with QuickBooks Online. That is clear. There is a much larger potential for new customers in the online market, both for QuickBooks Online and QuickBooks Self-Employed. All of the neat new “futuristic” kinds of developments, like using machine learning and big data, are all going to be done with the online products.

I’m OK with that. I understand Intuit’s focus on the online market. However, Intuit’s new focus on supporting QuickBooks Desktop is very encouraging, and I’m anxious to see what direction they take the product over the next few years.


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About the author

Charlie Russell

Charlie Russell has been involved with the small business software industry since the mid 70's, and remembers releasing his first commercial accounting software product when you had an 8-bit microcomputer with one 8 inch floppy disk drive. He has a special interest in inventory and manufacturing software for small businesses. Charlie is a Certified Advanced QuickBooks ProAdvisor with additional certifications for QuickBooks Online and QuickBooks Enterprise, as well as being a Xero Certified Partner. Charlie started blogging about QuickBooks in 2008 (Practical QuickBooks) and has been writing for the Accountex Report (formerly the Sleeter Report) since 2011. He retired from accounting and QuickBooks activities in early 2018.

Visit his CCRSoftware web site for information about his QuickBooks add-on products. He is also the author of the California Wildflower Hikes blog.

19 Comments

  • I could almost believe this was an April Fools article. Intuit going back to the basics? Fixing Data corruption? (Hasn’t that been on every customer’s wish list since the product was created? Why does Intuit care now?)

    I’m sure Intuit wants their customer base to believe they care about what their customers care about. A commitment to actually do something useful? I’ll believe it when I see it.

    By the way, to answer your question “how could someone think that Intuit would turn away from such a significant revenue stream?” Uber. A company that lost more in a year than any public company, yet maintained a $50B valuation. Wall Street values growth more then profits and more even than revenue. From your graphs, QB Online has much faster growth than QB Desktop. For the executive suite – rewarded by stock valuation often more than by salary or bonus cash, growth is a brighter and shinier goal.

    I really hope you’re right and Intuit isn’t just blowing (more) smoke.

    • I used to write April Fools articles, but people got mad at me because they thought they were “real” articles…

      Actually, if you look “under the hood” at the last several years of QuickBooks desktop updates (as well as at my articles), you’ll see that Intuit has been making an effort to resolve basic problems, security issues, reliability and corruption issues. That doesn’t mean that they’ve fixed EVERYTHING, but the effort has been there. What is changed now, apparently, is that (1) there is a stronger commitment to this at a higher level, and (2) there is more investment in personnel and resources to address these things. At least as far as I can tell.

      I wouldn’t compare Uber with Intuit – two companies that have very, very different approaches to things, and philosophies. And Uber is a relatively new startup, really, where Intuit is not.

      However, you do point out one trap that I tend to get into. I’ve been involved with small businesses all my professional life. I tend to think from the standpoint of a small business. A large corporation like Intuit is very, very different than that, and what would make sense to ME doesn’t necessarily apply to THEM. Even though their PRODUCTS are aimed at small businesses, they are NOT a small business themselves. Life is very different for a major corporation.

      All of what I wrote here is my opinion – my last article for Accountex Report, a last look at Intuit. I could be really off base. We’ll just have to see.

  • Good summary Charlie. Like you, I was very hopeful after hearing from Todd Stanley. The one thing area that I continue to be concerned about though is the POS desktop. Despite assurances during the IRP meeting, I have since found that the POS add-on SDK is not working on the current version of QBPOS. I hope that changes soon.

    Ernest

    • Thanks, Ernest. You know QBPOS way better than I do, it isn’t an area that I’ve ever spent time on. Best I can say is that there appears to be renewed interest in QBPOS from Intuit. You’ll have to see how they address any SDK issues – compatibility with legacy SDK’s is a complex and difficult issue when you want to advance a product.

  • Thank you Charlie for your articles. I have always found them interesting and helpful, even if they were not of immediate or direct relevance to the software I was using. Best of luck for the future.

  • Interesting take, Charlie – any idea about the revenue breakdown between QB Desktop vs QBES? Particularly since the subscription model change?
    Anecdotally some of my clients weren’t re-upping every year but now they need to.

    • Thanks, Greg. I would really, really like to see a breakdown of revenue generated by specific products (online as well as desktop), but Intuit doesn’t generally publish that level of information. They do give some idea of volume between QB Online and QB Self Employed, but never the desktop.

      I think that it is very likely that revenue from Pro and Premier is dropping, as the number of users decreases. I think that it is very likely that revenue generated by Enterprise is increasing, although I doubt that much of that increase is coming from an increase in user counts. And, as I understand it, Enterprise subscription rates are going to increase soon (if they haven’t already, I’m not tracking that). However, this is speculative on my part (although there are a lot of hints to be found if you dig in, and ask around).

      Clearly the future for QB Desktop is in QB Enterprise. That is where the significant new development is focused. And that product is very, very far ahead of where QB Online hopes to be.

  • Charlie, another great insightful article as we in the community have come to expect from you.
    I think your opinion/analysis is quite astute and things will likely develop as you suggest for QBD.
    Personally, I’ll miss your articles and am sorry to see you go but understand its time to move on.
    Thanks for the mention, stay well, hopefully we’ll catch up again at some future QB Connect.
    Cheers, John

  • Can you load QB Premier 2018 for a single user on multiple computer to use only on one computer at a time? I like to load in the office and on my laptop so I can work at home when needed.

  • We have very recently moved from Quickbooks (QB) Desktop Pro, to QB Online, something I’ve fought hard against doing for the last few years. We mainly did it for 3 reasons…

    1) it’s become increasingly difficult for us as small business, to manage the security of our internal networks which are also connected externally.
    2) Quickbooks Online stores all our data in the cloud, allowing this data to be connected to a growing range of very powerful third party cloud-based applications that allow us to simplify our business processes, potentially allowing our business to become much more productive, and compete more effectively with larger businesses. These third party software applications are generally priced on a monthly basis by the number of users, allowing us to experiment with, and then use very powerful commercial software applications at a cost that is commensurate with the size of our business. These are the sorts of software applications that usually would have been priced well beyond the reach of a small business like ours, had we bought them to install and use on our local network.
    3) Our external accountants were unable to buy an up to date copy of Quickbooks Desktop last year, to allow them to produce our annual accounts (The don’t generally use Quickbooks much). We also couldn’t find a copy of the desktop Quickbooks anywhere for sale in the UK. In the end we found that we we’re allowed to give them a link to download and install our desktop version for free, so that they could produce our accounts.

    So far, our internal accountant says he like it. It integrates well with Google’s G Suite, another powerful online suite of software products, which we migrated to at the same time.

    The migration from QB Desktop to QB Online was very smooth, and it’s a darn sight cheaper, saves us around £500 a year. However it does not migrate over any of your employee data beyond their name and address, I found it a complete PITA to renter all our employee’s details, Tax, NI and Pension, YTD figures data etc. QB’s excuse to me was that this is because QB Online Payroll is a third party add on, and not developed in house. Needless to say their excuse didn’t cut much ice with me.

    However, a much larger security/privacy problem has emerged with our QB Online user accounts. It transpires that our QB Online users are actually given a self-managed ‘Intuit’ user account, that we have absolutely no control over. All we can do, is give (or revoke) a users access to our QB Online accounts data. All revoking does is stop them accessing our data, their intuit account/password continues to exist.

    The security of our QB Online user accounts – who are accessing our financial data – is completely under the users control, not ours! We can’t set, or reset, our users passwords. We can’t enforce strong and/or unique passwords for our users. We can’t force our users to always use 2 factor authentication (2FA) to access our QB data. In any case, 2FA is only to phone numbers, and amazingly QB allow it to be overridden, as an option is given to those logging in, to send the 2FA code to their email address instead.

    The security of your QB Online financial data is a very very bad joke. I am gobsmacked, and utterly shocked by it. Users accessing your financial data are not under your control at all. Users are Intuit account holders, and QB Online data owners have ZERO granular control over their users accounts. It’s like some terrible bad joke.

    This issue deserves more visibility, it needs highlighting. As it is, user account management controls for QB Online data owners does not exist, and your QB Online data is not in the least bit safe. Users can turn off 2FA, bypass it, use weak passwords, or non-unique passwords, login from anywhere, on any insecure machine they like. Hackers can override 2FA, and they can also gain access by pretending they have lost their account password, and answering simple questions about the user that are not secret.

  • Great insights, thanks!

    Clearly Intuit is interested in transitioning its entire customer base to both a subscription model, as well as to the Online products. Those are really two different objectives. From a strategic perspective, the questions are how to best manage that transition.

    Simply from a business standpoint, a couple of things you said stood out.

    *Main focus for desktop development is Enterprise.
    *Enterprise is already on a subscription model.
    *Enterprise is seeing price increases.
    *Improvements to lower tier desktop products will mainly focus on bug fixes and reliability issues.
    *There is no plan to switch lower tier products to subscription.
    *Although it wasn’t stated, margins for subscription, and online are generally significantly higher than installed software w/out a subscription plan.

    Taken a whole and reading between the lines, this leads me to believe that Pro and Premier will get “maintained”, but not upgraded, and sunsetted sooner rather than later. The Online product, being far from parity with Enterprise, is however getting closer and closer to Pro and Premier.

    My guess (obviously just conjecture) is that the plan will be to push anyone who, for whatever reason, still needs deployed software to the Enterprise product. But the real development resources and push is going to be to the Online products and eco-system.

  • Charlie, I read your article and tried your suggestions but I still cannot get my loans manager to work in my QuickBooks.
    Can you provide me with the changes to the registry file that are required?

  • Thank you for the very informative article. Are you aware of any plans to develop a truly cloud-based (not just cloud-hosted) version of Quickbooks Enterprise? It seems strange that on the one hand Intuit seems to deliberately throttle QBO by not providing it with all the same reporting and inventory capabilities as Enterprise, but at the same time is encouraging customers in general to move away from desktop programs and to cloud-based applications. The small business I work for would be happy to continue paying the same license fees for Enterprise if it were cloud-based rather than desktop, but as mentioned in another comment, cloud-based solutions offer many greater opportunities for integration with third-party applications and are obviously the wave of the future. Thanks for any insights and information you may have!

    • David, first let me say that since I’ve retired, I don’t talk to Intuit management on a regular basis as I did when I wrote this article originally. So, things may have changed as far as Intuit’s intentions.

      However, they have been very consistent with their message on this for many years now, as I’ve discussed in multiple articles.

      1) Their focus is first on developing QuickBooks Online, over QuickBooks desktop (including Enterprise). There is new life for Enterprise, but the future is QuickBooks Online.

      2) Their focus is on the smaller business, starting with “self employed” and working up to businesses that are larger than that, but not enterprise sized businesses with QuickBooks Online.

      3) For reporting and advanced inventory functions in QuickBooks Online, they rely on third party developers to create products that will integrate with QuickBooks Online. You said it yourself, “cloud-based solutions offer many greater opportunities for integration with third-party applications”. So to get to the kind of functions you see in Enterprise, with QBO, you need to consider add-on products.

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