Intuit Partner Platform: Changing the Rules of Cloud Platforms with Federated Applications

Cloud platforms, or “platforms-as-a-service” (PaaS) are quickly becoming a key channel for application developers. By writing and publishing their applications to integrate with those of a major PaaS provider, such as Salesforce.com or Microsoft, smaller developers can gain instant access to a large installed base of customers.

With so many vendors creating their own clouds, however, it’s easy for software developers to get lost in them—or potentially, locked into in a cloud. After all, it takes a lot of time and effort to write an application that conforms to the requirements of a particular cloud platform. Smaller developers, without extensive resources, have to place their bets carefully, as they may not have the resources to rewrite their applications for different environments when a new or better opportunity arises.

But recently, Intuit unveiled a new capability called “Federated Applications”, which opens up the Intuit Partner Platform to developers that have existing software-as-a-service (SaaS) applications built on other cloud platforms, programming languages or databases. Instead of having to rewrite applications from scratch, developers can use basic XML integration to configure or “federate” their solutions with key integration points, including the user interface, billing, account management and permissions, data and single sign-on to ensure that their solutions integrate with QuickBooks and other solutions on the Intuit Workplace. For example, the partner solutions that Intuit announced at its launch—Expenseware, DimDim, Setster, Rypple and Vertical Response–are built on a wide range of different platforms.

Intuit also provides a wizard to help developers create their pricing plans, and checks each application to ensure that it meets Intuit security and privacy requirements. Once the process is complete, applications are published to the Intuit Workplace, where four million small businesses and their 25 million employees that use QuickBooks can access them.

With its Federated Applications model, and tremendous presence in the small business market, Intuit is poised to change the rules for cloud computing platforms, both for small business developers and customers, as well as rival PaaS vendors. Intuit’s model makes it much easier and faster for developers to leverage existing investments and reach a new market than for PaaS competitors without this capability. In turn, millions of Intuit customers get access to one-stop shopping, account management, connected data, and single sign-on for applications in the Intuit Workplace.

Intuit’s business model represents a dramatic shift from that of the current PaaS gorilla—Salesforce.com. In the Salesforce model, every user of any AppExchange solution must also pay a platform fee to salesforce.com, whether they need to use the Salesforce solution or not—a tax that many small business customers, in particular, are unwilling to pay. In comparison, Intuit charges Workplace developers a percentage fee (typically 14% to 20%, depending on volume) when they sell their solution on the Workplace. In return, developers get a sales channel, platform services, and a friction-free route to Intuit’s large installed base.

By lowering the bar to entry to its platform so significantly, Intuit’s federated approach makes it easy for developers to place a bet on the Intuit Workplace. Intuit customers, meanwhile, can look forward to a flood of new solutions that will work with QuickBooks. At the same time, its more likely that these solutions will be available on other cloud platforms, should the customer decide to move to another accounting solution. Seems like a win-win-win for Intuit, its partners and its customers—and a challenge to PaaS competitors with more proprietary models.

Meet MrTed

Those of you that follow me on Twitter and read some of the reports I’ve written over the years know I’m very interested free software-as-service (SaaS) offerings, and how companies that take this approach plan to monetize their free services.

Last week, I had a briefing with Jerome Ternynck, the CEO of MrTed, which has been providing MrTed TalentLink solutions for enterprise applicant tracking system (ATS) since 1999. In October 2008, MrTed launched a new, free ATS called SmartRecruiters (still in beta) for small and medium business (SMB) recruiters and hiring managers. SmartRecruiters streamlines the hiring process with an integrated, collaborative solution to help recruiters and hiring managers create postings, broadcast openings, enable candidates to apply online, view, screen and organize applicants, scheduled interview, provide feedback and make job offers.

And, when Ternynck says free, he means it. There are no catches for the SmartRecruiters ATS—no user fees, contracts, hosting or installation fees, upgrade fees, and no limits on the number of users, storage or time. And, SmartRecruiters connects to popular job search sites such as Yahoo! HotJobs, SimplyHired, Indeed.com and Career Builder.

MrTed’s initial target for SmartRecruiters is the 220,000 U.S. businesses with 50 to 2,500 employees. This market has been underserved by traditional, enterprise-oriented ATS vendors, whose solutions have typically been too costly and complicated for the average SMB to use. However, MrTed doesn’t exclude others from using SmartRecruiters–there are no technical or other of limitations to prevent companies of any size from accessing and using the solution. With little marketing fanfare, 600 businesses have registered for SmartRecruiters since the company launched the beta.

Launching a recruitment solution during an economic meltdown seems somewhat counter-intuitive, but when you think about, even if overall hiring is down, the number of applicants for any given position is most likely up. So companies that are hiring must exert just as much or greater effort and expense to hire the best people. As the economy recovers, and more SMBs start hiring again, Ternynck believes that its SmartRecruiters business model will disrupt the ATS market in the same way that Google has done in many areas.

But unlike Google, which relies on advertising revenues to support many of its services, Ternynck plans to monetize SmartRecruiters with integrated fee-based services, such as job posting, background screening, compensation analysis, relocation and assessment. In effect, SmartRecruiters wants to become a resale distribution channel for the providers of these services, helping them cut sales costs and increase SMB market penetration. According to Ternynck, SmartRecruiters will need to convert just under 20% of SmartRecruiters users to one or more of these fee-based services to become profitable over time.

Can MrTed do this, and do it profitably? Ternynck believes that it can. Some of the key factors in its formula include:

·      Using MrTed’s healthy profitable high-end business to subsidize SmartRecruiters for a few years. MrTed’s TalentLink solution has 200 enterprise users, and has been profitable for 20 quarters. Ternynck doesn’t see cannibalization will be an issue; he believes that enterprise customers are used to paying for technology, consulting and support and will continue to spend for higher levels of service and attention.

·      A low cost technology platform. SmartRecruiters is built on single code-base multi-tenant open architecture. Ternynck estimates that technology costs will account for about 10-15% of the total cost of delivering the solution to customers.

·      Viral marketing model. Sales and marketing will be SmartRecruiters’ largest expense, but Ternynck believes that viral marketing—on it own and with its partners—along with a self-service access and delivery model will keep these expenses low as well.

·      Community features. The SmartRecruiters community will rate providers, and supply input about functionality they want and additional services they’d like offered.

·      Under-penetrated market. According to MrTed, less than 10% of its target market uses an ATS system today—it doesn’t need to unseat an incumbent.

Of course, SmartRecruiters must exponentially grow its user community to gain the scale it needs to monetize its free service—at a time when many SMBs just aren’t hiring. But MrTed seems to have enough patience and resources to get through this period. As the economy ticks back up, and companies transition from a cost-cutting mindset to growth, the talent war will heat up again. If SmartRecruiters can broadly educate SMBs about the benefits of ATS, and get the right partners on board, I think that it will be in a good position to make the headway it needs to monetize its free service in this as yet under-penetrated market. 

Let me know what you think about free SaaS services monetized with ancillary services in the following poll!

Demandbase—Can it Turn Your Web Traffic Into Treasure?

Like most analysts, my schedule is usually chockfull of briefings from vendors. Some of these are boring, some are interesting, and once in a blue moon, a vendor comes along with a solution that everyone should know about.

Demandbase (www.demandbase.com) is one of these solutions. I initially came across the vendor late last fall, when I was judging for the Destination CRM Awards, and Demandbase was one of the nominees. I wanted to learn more, but between the Christmas holidays and my job change, I didn’t get to schedule a briefing with them until a couple of weeks ago.

Here’s why Demandbase is so interesting—particularly now, in this bruising economy. Companies spend a lot of time and money to drive prospects to their Web sites in the hopes of converting them to paying customers. With email campaigns and a dizzying array of social media (not to mention direct mail and other traditional marketing tactics), there are more tools than ever to get visitors to your site.

But most companies—especially in the B2B space—have a tough time harvesting the quality, “best-fit” leads from the irrelevant traffic. How can you tell if your campaigns hitting—or missing–the mark when it comes to reaching and attracting the right visitors to your site?

Demandbase zeros in on this problem by giving B2B companies much more visibility into who is visiting their Web site, and delivering qualified, scored lead services. Demandbase starts by aggregating and scrubbing lists from major database providers such as Hoovers, LexisNexis, Dun & Bradstreet and ZoomInfo. This provides the underlying business contact data for its lead qualification and scoring services, which are integrated with each other.

These services help you weed out the irrelevant leads and target the quality leads. Demandbase offers free, pay-as-you-go, and subscription based services. Demandbase Stream is the freebie service, and even this offers great value. You download a widget from the Demandbase site, and link it to your Web site with some JavaScript in a couple of clicks. Once you set it up, it displays ticker-style information about who’s visiting your site, what search terms they used, and what pages they looked at. It deciphers web traffic URLs, and filters out the ISPs and other irrelevant data. You can also create a Watch List to alert you when existing customers, prospects, partners and competitors are on your site. Demandbase Stream even works with blogs. (However, some blogs, such as wordpress.com, don’t allow you to add JavaScript to your page, so you have to use the company’s image-based tracking system instead. Its not quite as detailed, but I’ve installed it and am finding that even this more limited information is useful).

Demandbase fee-based services work with Demandbase Stream. For instance, when you see a qualified lead in Demandbase Stream, you can use granular search capabilities to locate specific people in targeted geographic areas, and purchase business contact information from Demandbase Direct. With Demandbase Standard, you create a target customer profile, and buy leads that fit your profile one at a time, or by the thousand, directly from it’s aggregated database. Demandbase can send them via email or to your CRM system. Price per lead depends on the score, and is typically about $2 per record. Demandbase is currently offering $20 worth of free contacts so you can take Demandbase Standard for a free test drive.

The company launched Demandbase Professional last week, which is a subscription service that starts at $325 per month. Demandbase Professional provides all of the services above, and additional features that integrate inbound marketing programs like online advertising, search marketing, social network marketing, etc. that drive traffic to your site with your outbound direct marketing programs.

Demandbase closed an $8 million round of funding last summer, and says that it is growing 30% quarter over quarter. This trajectory should continue, since Demandbase addresses a challenge that is ever present, but particularly compelling when times are tough. So compelling that I think the right question is, can your B2B business afford not to try it? 


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