Intuit Proves SaaS Argument

Users of Intuit's QuickBooks Pro for Mac financial software have filed suit against Intuit for what they're calling a "nightmare loss of purchase orders, spreadsheets, and other files" during an online software upgrade last weekend.

An Intuit spokesman says the problem affected only a "limited" number of customers the weekend of December 15. Apparently, as code was being downloaded, a programming error caused data on the receiver's end to be deleted.

"There was a problem with the update for QuickBooks Pro MAC for version 2006 and 2007," states Intuit's QuickBooks support Website. "The update displays the following message: 'there is not enough disk space to install.' Intuit has resolved the problem that caused this on the server."

For at least one SMB, that's not good enough. "My company lost its invoicing, sales reports, inventories, day to day working files, pictures, and other files containing financial information. The files lost represent hundreds of hours of work," states Juan Loredo, operator of a bar called the Vinyl Room in Burlingame, Calif., in a prepared statement. He's signed on for a class action lawsuit being handled by Moscone, Emblidge & Quadra, LLP.

Intuit's stock was unaffected by today's news, which follows announcements of Intuit's plans to acquire two companies, including a Website solutions firm for SMBs. But at least one analyst, financial strategist Sramana Mitra, thinks it has the potential to work mischief with the company's financials, especially if the lawsuit gets complicated. And she suggest that the data loss is an argument for the use of software as a service (SaaS)."SaaS is actually a great protection against situations like this," she writes in answer to an online inquiry from Byte and Switch. "The data can be predictably and securely backed up at the provider, instead of depending on the whims of the small business users. I think the entire SME category will move to SaaS over the next decade."

Either that, or they'll back up their spreadsheets before they update the software.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.