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.