Through a new set of APIs, Intuit has found a way to offer up any SaaS application.
It's interesting that certain software companies like Oracle are trying to get into the hardware business, while companies such as IBM, already in the hardware and software business, are now introducing a series of "appliances" that allow them to sell both hardware and software. There are companies, however, that are simply focusing on what their customers need, which is a more efficient way to run their businesses.
Intuit, which develops and sells QuickBooks, is one of those companies. With seven million business customers—four million alone using QuickBooks—the company must be doing something right. IBM announced last May that it was partnering with Intuit on…you guessed it…an appliance to run small businesses with QuickBooks Enterprise. Everyone is happy with that, including customers. For less than $8,000, they can have everything they need to run a small or medium business, including email, calendaring, security, and finances with access to remote services—such as managed security and hosted data backup and recovery services—through IBM's cloud. Part of the IBM Smart Business initiative, the Intuit QuickBooks Enterprise Solutions appliance provides all the basic technology required to run a business yet is easy to manage. It can be set up and running in a matter of hours and can even include VOIP to handle a company's telephone requirements.
Intuit has been busy lately and may have come up with a model that will eventually win out over the hardware-software appliance approach. In 2008, the company promoted a very bright business administration and management executive to be its new president and chief executive officer. Brad Smith worked through just about every department in the company, assuming the duties of Intuit's senior vice president and general manager of Intuit's Small Business Division and its portfolio of small business products, including QuickBooks, Quicken, and Payroll products. That division alone serves seven million small business customers. Can you imagine the benefits of having seven million businesses from which to draw market research? Anyway, Smith (no relation to yours truly) decided the old style of desktop applications was working OK, but in order for the company to really grow, it would have to come up with a new paradigm.
The business model that Intuit has adopted to grow and meet its customers' needs is one that is highly collaborative and potentially very profitable, and it promises to meet the specific needs of a very large number of small and medium businesses. Intuit's new Intuit App Center closes the gap, as the company says, between QuickBooks desktop software and cloud computing. With one click on the toolbar of QuickBooks Pro and Premier 2010, users can buy and use Web-based business applications integrated—or built directly on—the Intuit Partner Platform (IPP). So far, there are 30 applications from which to choose and more on the way. With a pool of some 80,000 QuickBooks developers, it's likely to grow exponentially in the next couple of years.
Think about 25 million potential users within the companies that use QuickBooks, and you will start to imagine why you might want to consider getting an application into the Intuit App Center. The applications are not downloaded but offered as managed services for which companies pay a nominal monthly fee, depending on the number of users. Intuit takes 20 percent off the top, but the slice goes down as the number of user increases. There are no other charges to ISVs unless the application is hosted on the company's platform, and then there is a utility charge.
The angle is not that you can buy application services that do what you need, but that what you buy can use your company's QuickBooks data right from the outset. The data becomes the focus of the applications, much as the data in an IBM Power Systems does at many large enterprises. If you're a QuickBooks user, the data gets uploaded to a supposedly secure, encrypted Intuit platform in the cloud. Now QuickBooks is no longer the focus of your business; the data is, and it can be massaged by any number of applications all running in the cloud. Users don't have to be running QuickBooks either.
How secure is it? That's the question I posed to Alex Chriss, director of the Intuit Partner Platform. His answer: "Intuit is well-known in the industry as a security provider for all the work we do, not only with QuickBooks but also Turbo Tax filings. The data we bring up from QuickBooks is kept in our data centers and is encrypted on several levels. It is secure. As we work with our federated partners, we have them go through an external audit similar to our internal applications to make sure they have passed the necessary security provisions to be a member of our community."
Chriss' reference to federated partners is one that means Intuit now has figured out how to include virtually any SaaS application on any platform in its collection of Intuit App Center offerings by using a new Intuit Partner Platform set of APIs, Intuit Data Services. Could any of the 5,000 or so IBM midrange solutions be offered in the Intuit App Center? They all could, according to Intuit, providing that they have been written to run as SaaS applications. There, of course, is the challenge, since many applications will have to be rewritten in order to run as managed services. (On an IBM i machine, managed service applications have been known to run as standard applications within individual dedicated customer partitions.)
Nevertheless, Intuit envisions strong growth over the next few years as it provides a new way to offer its millions of customers a wide choice of business solutions through its Platform as a Service (PaaS). At the same time, by using PaaS, it is offering developers and ISVs a way to make money by creating a marketplace in the cloud for selling solutions to users who have their data ready and waiting to integrate with the applications. Intuit's platform takes care of such things for ISVs as billing, which makes deploying the Intuit Partner Platform relatively easy.
A connectivity/data management toolset designed for companies operating on the IBM i was announced last August and is now available from vLegaci’s subsidiary, QuickerApps. The tool set, composed of QuickerApps/400 and QuickerApps/DM, enables Intuit QuickBase users to import data directly from IBM i tables.
PaaS promises to change the landscape for ISVs, and IBM Business Partners might wish to investigate the Intuit cloud model to see if there is anything there they can learn about their own business model—or their present customer relationships. For more information, visit www.intuit.com or the Intuit Partner Platform.