Let me firstly say that, in the past, I have been a real fan of QuickBooks.  When I started Pearson & Associates in 1995, I recommended QuickBooks to any clients who would listen.  I have never liked Sage Line 50, it was QuickBooks all the way for me.

Then things changed.  Intuit, the makers of QuickBooks, seemed to lose their way in the early noughties.  With a commercial need to release upgrades regularly, to keep the revenues coming in, but with a product was functionally complete already, they had to resort to adding peripheral features, almost gimmicks, that most users didn’t really want or need.  QuickBooks 2008 was particularly badly received – especially as it left users of multi-currency completely in the lurch.

Times have changed and, since 2008, I have been an advocate for online accounting software – Xero in particular.  So I was interested to see what progress, if any, had been made by Intuit with the release of QuickBooks 2010.  As before, I was disappointed.  There are the usual minor tweaks but no exciting new features.  No vision.  However, what really caught my eye was the Upgrader’s Guide.

We are now used to a world where most of the software and services we use are delivered online.  The providers deal with upgrades for us, they deal with data conversions without us even knowing, new features just appear.  Now read this extract from page 1 of the QuickBooks 2010 Upgrader’s Guide (I have added the emphasis):

• Installation takes about 15 minutes. Upgrading your company file depends on the size, but most take 1-2 hours.
• You’ll need to perform some extra steps after you upgrade. Set a few hours aside for this.
• We suggest you perform the upgrade outside of work hours, either at the weekend or at the end of your work day.

My reaction was “What!  Are you serious?”

Thanks a bunch Intuit.  I pay you my money (again), for an upgrade that offers little in the way of real innovation, and then I have to give you 5 or 6 hours?  Oh, and you want me to give up my personal or family time out of normal work hours into the bargain?  Unbelievable.

The Upgrader’s Guide then goes on to ask me to make some quite technical choices about the location of the QuickBooks data file, whether installation will be best done on a server or individual computers plus other decisions need to be made about user access and rights.  These decisions add to the chore of the upgrade process and many of them would not even need asking in a web-based delivery model.

To be fair to Intuit, it seems like the time-consuming tasks only apply to users upgrading from the 2006 or earlier versions.  However, given that anyone using multi-currency was unable to move to 2008 when it was released and, because of horror stories about the upgrade process to 2008, many users have hung on to their 2006 copies waiting for this 2010 version, there are going to be many, many people facing the prospect of spending a whole Saturday or Sunday working for Intuit.

Maybe Intuit are embarrassed about this but they are stuck with legacy software, written nearly 20 years ago, which they struggle to innovate on whilst being compelled to release new product to generate income.

Far from being a fight-back, QuickBooks 2010 is another nail in the coffin of the old school vendors.  Sage absolutely included.

In a post on the Xero Blog today, Mark Vickers discusses how users of software (desktop or web-based) are always vulnerable to “vendor lock-in” – in essence having their data stuck in a system they now want out of.

He cites the example of FaceBook’s recent change to its privacy policy, then moves on to accounting software providers and states:

“Vendor lock-in has a long and nefarious history in the software industry. Traditional accounting software has been guilty of locking people in with proprietary formats and compulsory upgrades.”

Of course, the point of Mark’s post is to try to convince us that Xero is not guilty in this regard, that it plays fair with your data.  He tells us that data can be exported from Xero in commonly used formats.  He also reminds us that upgrades to the software are very regular and come free as part of the service.

So, I thought I would examine Xero’s credentials.  Are they playing fair with our data?  Are they justified in taking the moral high ground here?

Firstly, let’s deal with the “compulsory upgrades” point.  In his post Mark outlines this scenario:

“You might buy some accounting software and run it for a couple of years. An upgrade becomes available, but it’s expensive. You decide you don’t need it, because the upgrade doesn’t offer anything new. A few more years pass, as do a few more upgrades, and you choose to ignore them all.”

He then talks about the user finding out that, because they missed some steps in the upgrade process, they are no longer in a position to make the jump to the latest version.  Disaster!

Now, I agree with what he is saying.  Many readers will have experience of the annual QuickBooks upgrade cycle and the serious consequences that can result from falling behind in the version number race.  I well remember the huge problems clients had moving to QuickBooks 2008 – it’s one of the reasons we were able to move many of them over to Xero.

But is Xero innocent here?  No it isn’t, because Xero DOES force its users into compulsory upgrades.  The fundamental principle of the “software as a service” model is that all users always have the latest version.  What about the user who sees the changes coming in the next upgrade and doesn’t want them?  The changes may be regarded as an advancement by Xero and most of their users, but seen as a backward step by an individual user.  That user does not have the option to say, “no thanks, I’ll stick with what I’ve got please”.

The continuous, automatic upgrades model is the right one in my opinion but there will always be someone who prefers the status quo and, to that user, Xero will be enforcing a compulsory upgrade.

I will explore the data export features in my next post.  Is Xero really playing fair with our data?