"If you are using something now that works, the conservative part of us is going to say 'Why change?'" says Larry Gray, a partner with Alfermann Gray & Co., a Rolla, Mo.-based CPA firm. Gray's firm has used what was called the Virtual Office from Thomson Reuters to run the company's UltraTax tax preparation software in a hosted environment.

But Gray, who performs consulting services for other firms, says he doesn't think Internet-based software is on the radar for most organizations. And to get SaaS products accepted will require the publishers to do some work.

"It's going to be more of an educational marketing effort," says Gray. He notes while Thomson markets Virtual Office CS and SaaS for CS for the UltraTax line, the products are essentially the same. The difference, he continues, "is a pricing strategy."

Another long-time UltraTax user, Robert Carmines of Newport News, Va.-based Carmines, Robbins & Co., says that "SaaS is pretty expensive. It would be doubling what our software costs are. We would be losing some overhead issues. Not all; we'd still need a server. We would still need remote desktop or Terminal Server."

Carmines also said the firm could not use Outlook in the SaaS environment because it could not journal email, which is required because Carmines Robbins provides financial services. Under journaling, a copy of every email goes to a monitoring company.

A lot of practitioners probably fall into the same category as Mark Edgar, a CPA based in Aurora, Ill., who says he "loves Lacerte, hates the prices." But when it comes to Intuit's ProLine Tax Online, Edgar says, "I haven't even looked at it. I probably should."

Among online users is Jody Padar a partner at New Vision CPA Group, who is an enthusiastic supporter of web-based applications. Padar says that the $400 a month she pays for the Thomson suite is well worth it even though it increased her software costs.

"For $4,800, a year I have a complete office," she notes. That includes not just the tax package but Thomson's CS Practice, CS Accounting and other applications in that line, along with Microsoft Office. There are no extra fees, including pay-per-return.

Padar, whose firm is based in Arlington Heights, Ill., says besides keeping current on software, she can also easily change the number of users. During tax season, she can add users "by flipping them on and after tax season I can flip them off." Padar also cites increased security as an advantage of the SaaS product, which both she and Gray says is the hosted Virtual Office with a new name. "They just price it differently."

As to security: "If your computer breaks it's three hours to run to Staples to buy a new computer," she continues. Padar doesn't need to worry that a computer crash also takes down the application and data. Padar says the online product is ideal for those who want to start a practice since subscription pricing means they don't have to fork over to buy all the technology upfront.

Edgar's comment about not having looked at Intuit online tax application Online probably fits a lot of people. In the limited discussion thread on Intuit's TaxAlmanac.org, among the few responding, most didn't know what ProLine Tax Online is and two practitioners expressed their annoyance that it automatically downloads when they update their applications.

One problem is that some products are new enough that they are more limited than the on-premise versions that practitioners have been accustomed to using.

Padar says Thomson has a limited number of seats that can be made available to new users. And Intuit's ProLine Tax doesn't have the functionality of Lacerte. "Intuit's TaxOnline is OK. It's just not really there yet," she comments.

Jorge Olavarietta, Intuit's tax product manager, says many preparers probably aren't aware of ProLine since Intuit has been selectively adding target customers. When the product debuted, it was aimed at 1040-only preparers and it made no sense to market to the wider audience. For the 2010 software, Intuit added 1120s and 1065 and associated states and efiling. This year, it is adding the 1041.

While ProTax utilizes the Lacerte engine, the company has emphasized it is not trying to bring either ProSeries or Lacerte online. As Intuit widens the audience it is addressing, more practitioners will become aware of the web-based product.

Intuit's plan is "to expand that process to meet the needs of the segment we are addressing in a given year," says Olavarietta.