The idea of cloud accounting originated in New Zealand in 2006 with Xero. Xero has always been a cloud-based accounting solution; it never developed or sold a traditional desktop version of its accounting software.
Xero grew quickly in New Zealand, and then moved to Australia. Cloud based solutions now have a large market share in New Zealand and Australia. Xero next targeted the UK and is gaining market share. More recently Xero has begun to target the Canadian and American markets.
The longer a cloud accounting solution has been in a market, the more features it adds in general and in particular for that jurisdiction. In general, the longer an application exists in a market, the more third party add-ons exist to address specific needs.
Quickbooks has a long history with desktop accounting applications; saw this new category of software developing in New Zealand and Australia and introduced its own Cloud Accounting program called QuickBooks Online, which has a longer history and market share in North America.
Sage has augmented its desktop accounting solution Sage 50 (Simply Accounting) with a Cloud based offering called Sage One, that started its development in the UK.
As with any market in the growth stage there are numerous starts ups, such as Wave, Zohobooks and others, each finding its own niche.