Small businesses are very diverse, and so are their needs and sources for financing. For small businesses, borrowing money, or debt financing, is one of the most common sources for funding. While small businesses can seek out loans from many sources, including friends and family, banks, savings and loans, credit unions, commercial finance firms, and the government, the borrowing process can be frustrating, difficult and time consuming for many small business owners.
So I was excited to talk with Rania Succar, Director and Group Leader for QuickBooks Financing at Intuit, about financing considerations and options that are available for small businesses today. Rania recently joined Intuit from YouTube, motivated in large part to her desire to help fuel the economy by helping small businesses succeed in area that is ripe for innovation.
In this video, we discuss trends in small business financing, and what Intuit doing to give small businesses more options and easier access to financing. Rania noted that on average, small businesses spend 33 hours to pulling together all the documentation they need for bank loans, but are declined by banks 70% of the time.
Three years ago, Intuit decided to address this problem with QuickBooks Financing, focused on delivering “speed, ease and low fees,” according to Succar. Intuit’s financing service automatically compiles loan documentation by pulling in data from the small business’ draws QuickBooks account–dramatically slashing time from the loan application process. Then, Intuit matches the small business with one or more of the dozen lenders, including Fundbox, OnDeck and Kiva, on its platform. Loan decisions get processed quickly, and small businesses can compare the different offers they get and select the one that’s best for them.
If you need access to working capital to smooth out cash flow for a seasonal business, or to expand your business, watch this video to learn how QuickBooks Financing can help.
Laurie: Hi, this is Laurie McCabe from SMB Group and today I’m talking to Marc Kalman, who is the CEO and founder of BizSlate, which provides inventory management solutions for small businesses. So, welcome Marc!
Marc: Thank you. Glad to be here today.
Laurie: Thanks for coming. We’re here at the QuickBooks Connect conference, a very appropriate place to be talking about small business solutions. I’m wondering, before we get into the specifics of what BizSlate does, can you tell us about your role how the company got started?
Marc: Sure Laurie. I’ve been in the supply chain technology field my entire career. I started off as a software engineer right out of college, did that for about nine years and had the opportunity then to move into more of the practitioner side of things where I was an EDI (electronic data interchange) analyst for a while, I was a supply chain specialist at companies like Coach Leatherware, and then I had the opportunity to direct a team for a nine division accessories business in New York City. From there, I started my last company, which was, and still is a successful EDI provider, Easy Come Software.
What we found was, because of our unique way of addressing the market for small businesses, we were upwards of 90% more efficient than any of our competitors as far as a supply chain capabilities around EDI were concerned. That led to our customers calling up after a while saying, “Hey Marc, this is great what you’re doing for us in the world of EDI. While in our case it might be 70% or 80% of our business, it’s two customers and we have a thousand customers and we’re using QuickBooks and we want to see our inventory and we can’t keep track of things correctly. And people are traveling and need access to real-time information quickly to make important decisions and keep up with the market.”
So it caused me to look at what was going on in the supply chain space for small businesses and I saw that it was a big problem. I’m very passionate about the space, I’ve been involved with it for a very long time and decided, you know what? I’m going to go do something about it and so here we are.
Laurie: So, what specifically does BizSlate do?
Marc: So, we obviously we do integrate with QuickBooks, predominantly focusing on QuickBooks Online right now. That seems to be the direction that QuickBooks is pushing everybody towards anyway, and we want to be the forefront of that.
Laurie: Right. And new companies are starting more with cloud-based offerings.
Marc: Exactly. We are web-based, and we focus on helping small businesses improve how they manage everything–customers, orders, vendors, inventory, logistics of the supply chain–and give them the tools that they need to succeed this very intense, omnichannel market.
Laurie: Does it plug right into QuickBooks, Marc?
Marc: It does, seamlessly. We connect right to QuickBooks through APIs, so as you process documents in our system, let’s say like you post invoices or you receive inventory, if you go into QuickBooks you would instantly see those transactions.
Laurie: It sounds like it kind of fleshes out QuickBooks beyond accounting and basic financials into what other companies would call ERP or Enterprise Resource Planning, with functionality that manufacturers or distributors might need.
Marc: Correct. And you know, QuickBooks is great from an accounting system perspective. But certain businesses, particularly product-related businesses that have to track inventory, as they evolve, the operations aspect of QuickBooks doesn’t always keep up with the rate of growth. This causes companies to start looking outside of QuickBooks, at companies like MAS 90 or Dynamics. And until now, QuickBooks really hasn’t had a lot of defense against that. In fact we just did a demo for someone earlier and they said, “You know, QuickBooks plus BizSlate equals NetSuite.”
Laurie: What are you finding in terms of the sweet spot of customers that are interested in BizSlate? I would expect you have a lot of QuickBooks users that say, “I like QuickBooks but I need more.” Any other kinds of people coming by that are interested?
Marc: There are two key areas that customers are attracted to us. One is what you just described, where someone is using QuickBooks, loves it, or their accountant wants them to stay on QuickBooks. They don’t want to have that disruption of having to change the whole system, they just want to expand functionality. We give them a nice path to be able to do that with a system that will help them not just today, but sustain them for the future. Also, the power that we offer is at a very affordable price. So we also find companies that use solutions like NetSuite that maybe aren’t capitalizing on all of the capabilities that NetSuite offers, or it’s too complex, it’s too big, it’s too expensive. This is an opportunity for them to get the same efficiency but easier, and more affordably.
Laurie: Is there a sweet spot in terms of company size for BizSlate?
Marc: We are primarily focusing on businesses that are fifty million in revenue or less. Industry-wise, we have a lot of traction in apparel, footwear, also housewares, consumer goods, and electronics
Laurie: A lot of companies are targeting small businesses who are outgrowing QuickBooks. So why BizSlate? What makes you different?
Marc: That’s one of my favorite questions. Because we get it. We understand small businesses. Small businesses today are understaffed and overworked. People are doing fifteen different jobs at the same time and that’s on a good day. They don’t have time to sit in front of a computer processing documents. Every single person at that company needs to focus on the growth and profitability of that organization. It’s actually detrimental to the business in a very aggressive market to have people who are wasting time on a lot of data entry.
When some vendors target small businesses, they just don’t understand what these small businesses need. They say that they do, but they don’t. These providers, what they say is, “Well, for a small business it has to be affordable,” right? It does. Has to be easy, and it has to be easy, right? But to get there, the typical provider does that by removing value. But this removes ROI. So where BizSlate is different is we bring enterprise value, the kind of tools, the intelligence that small businesses really need to be able to capitalize on the market. But we do it in a way that is affordable and easy and gives them tools that to really rev the business up and focus on things that are more important to the company.
Laurie: I think you hit the nail on the head. Time is usually the most precious resource for many small businesses. So how long on average does it takes somebody to get up and running on BizSlate, and how do you help them get productive more quickly?
Marc: Every customer’s a little different. There are different levels of complexity. We start our promise to our customers with ease of use by making sure that the software itself can be learned and trained and used without anybody ever having to teach somebody something. Now that said, that doesn’t mean we don’t support our customers. In fact, I believe we’re one of the few, if not only, providers of this type that offer free unlimited phone support.
Laurie: That’s a big deal.
Marc: Because we want to make sure our clients succeed, it’s not just about selling software here.
Laurie: Yes, in a subscription model you really want to keep them once you get them.
Marc: Exactly. And we’re passionate about small business, I come from the space. Half the employees at BizSlate come from the space. We are really here to make a difference and we want our clients to be successful. As great as our software is, we want to be known for the service that we offer and really make a difference.
Laurie: Last but not least, is there anything here at QuickBooks Connect that you’re highlighting that you’d like to just give a shout out for?
Marc: Thank you, we’re very excited. Also we’re just finishing up QuickBooks partner certification. In about a week or two, we should be listed on apps.com so everybody will be able to find us.
Laurie: That’s great. It looks like you’re having a good time at the show too.
Marc: I’m having a great time. I’m meeting lots of great people, having great conversations, and excited to see that there’s a lot of interest for what we’re doing.
Laurie: Well Marc, thank you so much for talking to me today and sharing this information so people can learn more about BizSlate and connect with you.
For Intuit, small business is big business. The company has long dominated the very small business, or VSB (1-19 employees) accounting market in the U.S. (Figure 1), and in the last few years, has also been campaigning hard to win global business against incumbents in countries such as Canada, U.K., India and Australia.
Figure 1: U.S. VSB Accounting Solutions Purchased/Upgraded in Last 24 Months
Yet Intuit has had a mixed track record in terms of evolving from a traditional package software model to a cloud-based services and platform company. Although Intuit initially launched QuickBooks online in 2004, the vendor seemed conflicted about how best to navigate its own transition to a cloud based business model for several years. However, it started getting serious about the cloud a few years ago, and today QuickBooks Online has grown to serve over 1,150,000 small businesses.
Meanwhile, the company has continued to wrestle with how to grow its business beyond its core QuickBooks franchise. This past summer, Intuit announced plans to divest several businesses, including its original Quicken consumer finance product; QuickBase, a collaborative workspace to build custom apps; and Demandforce, an automated marketing solution for small businesses. In addition, the vendor laid off about 5% of its workforce this past August.
Given the opportunity to attend this year’s QuickBooks Connect conference, I was curious to learn more about Intuit’s transformation strategy, and how it will grow its small business footprint. At the event, Intuit emphasized plans to:
Double down on small business financial management-related services that leverage the QuickBooks Connect platform. With plans to take Quicken, QuickBase and Demandforce off its plate in the works, Intuit can free up resources to concentrate on innovation in small business financial management. The vendor announced new solutions to help retailers and e-tailers automatically connect QuickBooks to inventory and sales data across multiple channels. This includes integrating data from e-commerce providers like BigCommerce and Shopify, as well as integration for QuickBooks Point-of-Sale. Intuit also showcased a new QuickBooks financing option, offered in partnership with OnDeck. The QuickBooks FinancingLine of Credit uses small businesses’ QuickBooks accounting data to qualify applicants for lower-rate loans than those available from traditional lenders. Intuit also highlighted its partnership with Fundbox, which provides advanced payments for outstanding invoices in QuickBooks to help improve cash flow.
Bet the future on the cloud and big data. While Intuit will not abandon desktop users, it has shifted its resources (and partner ecosystem, see the next bullet) to the cloud. According to Intuit, QuickBooks Online accounted for 60% of new sales in FY15, and the company expects that to jump to 70% in FY16. As it transitions more customers to the cloud and the QuickBooks platform, Intuit gains access to more customer data that will enable it to create–and monetize–a broader array of financial services for small businesses.
Ramp up its ecosystem and platform play. Over the past year, Intuit has grown the number of third-party apps that integrate with the QuickBooks platform from just over 300 apps to more than 1,500. At the event, Intuit announced that it has set up a $4 million co-marketing fund to help developers promote apps developed on the QuickBooks platform. Through the program, the vendor will double developer partners’ marketing investments of $10,000 to $20,000. For example, if a partner spends $10,000, Intuit will double the match to $20,000.
Boost its focus on the self-employed sector. Last fall, Intuit announced QuickBooks Self-Employed, its somewhat late counter to rival Freshbooks, which launched in 2003, and now claims to have over 5 million users (though Freshbooks doesn’t disclose the number of paid subscribers). Designed to provide the rapidly growing self-employed segment with tools to organize and manage their finances, QuickBooks Self-Employed enables users to connect bank and credit card accounts to import transactions, and categorize them as either business or personal. The solution also automatically assigns them to the proper IRS Schedule C deduction category. According to Intuit, QuickBooks Self-Employed currently has about 25,000 paid subscribers. At QuickBooks Connect, Intuit highlighted a new partnership with Stride Health, which integrates Stride Health’s personalized approach to managing health insurance, healthcare and compliance within QuickBooks Self-Employed.
Strengthen its accountant solutions and network. Intuit introduced Trial Balance within QuickBooks Online Accountant at the event. The solution helps accounting professionals save time by pre-mapping most of the accounts from QuickBooks Online Accountant to an Intuit Tax Online form, reducing or eliminating manual data import, export and entry work. It also gives accountants one, centralized location to store the work they perform for clients. Intuit also launched a New ProAdvisor Fathom Partnership, designed for accounting professionals who want to deliver more frequent, engaging advisory and management reporting services. The new partnership provides ProAdvisors with exclusive benefits, including a free Fathom single company license for life, discounts of up to 50% off licenses for their clients and dedicated support for ProAdvisors and their clients. Intuit also hosted a special VIP event for key accountant partners. Intuit used the VIP event to provide partners with deeper insights into Intuit’s plans, and to tap into partner ideas and recommendations to strengthen QuickBooks small business and accountant solutions and programs.
Grow globally. Intuit currently provides localized versions of QuickBooks in the UK, India, Canada, Australia and Singapore, with plans to launch in France and Brazil later this year. Intuit’s commitment to global expansion was underscored by a large accountant and developer representation from these countries, especially the UK, Canada, India and Australia.
Perspective
Intuit has traveled a somewhat rocky road to the cloud, but now seems to be finding its footing. It has elevated QuickBooks Online to flagship status; significantly ramped up developer activity on the QuickBooks platform; is gaining awareness and customers in new geographies; and continues to have a large, loyal accountant network.
This doesn’t mean all will be easy climbing from here on in. Intuit needs to play an aggressive catch-up game in the race to win self-employed customers. Furthermore, while Intuit is focusing on helping small businesses better manage their financials, VSBs (businesses with 1-19 employees) seem more concerned with business growth. According to SMB Group’s 2015 SMB Routes to Market Study, VSBs rank growing revenue and attracting new customers as their top two business challenges–ahead of improving cash flow, maintaining profitability and obtaining financing (Figure 2).
Figure 2: Top U.S. VSB Business Challenges
Meanwhile, competition for customers in new geographies will be fierce and nuanced with global complexities. And, in all cases, Intuit is competing for limited IT dollars: 62% of VSBs spend just $1,000-$9,999 on IT annually (SMB Group’s 2015 SMB Routes to Market Study).
Figure 3: U.S. VSB Annual Technology Spending
However, Intuit’s tack to build new, data-driven services for small businesses–such as its new lending service–provides the company with an exciting opportunities to disrupt the status quo and create new revenue streams, such as Intuit is doing with QuickBooks Financing. While other companies may launch similar services, Intuit’s dominant market share in the U.S. provides it with a unique advantage. While its too soon to know how this will actually play out, Intuit’s ability to capitalize on this potential will likely prove to be the biggest factor in spurring the company to the next level of growth.
Note: Intuit hosted me at QuickBooks Connect and paid for my travel expenses.
This is part one of a two-part blog series discussing Intuit’s strategy to help SMBs better capitalize on technology. This first post provides perspectives from Intuit’s 2014 QuickBooks Connect event. The second post, Intuit’s Strategy to Bring Game Changing Technologies to SMBs,provides a detailed glimpse into Intuit’s approach in the SMB market.
Last week, Intuit held its inaugural QuickBooks (QB) Connect event in San Jose. The 4,000-plus attendees included accountants, developers, small businesses, press, influencers and analysts. The agenda included a good mix of updates, announcement and inspiration from an all-star line-up of speakers. Below are my top takeaways from each of these areas.
Turning the Cloud Corner
While newer competitors, such as Xero, have made a lot of noise, they haven’t had much of an impact on the market. Instead, Intuit’s Small Business Group continues on its growth trajectory, especially in the cloud. QuickBooks Online’s U.S. subscribers grew 32% in 2014. QuickBooks is no longer just a U.S. solution, however. Intuit now sells QuickBooks in 124 countries, and has translated the solution into 12 languages. As of September 2014, the company has 705,000 paid subscribers for QuickBooks Online, and a total of 32 million customers worldwide.
Intuit has clearly turned the cloud corner. In 2009, just 5% of new users were online, now the majority opt for QuickBooks Online over packaged QuickBooks products. In addition, 80% of QuickBooks Online customers are new to the Intuit universe, indicating the cloud version is doing a good job of pulling in net-new customers. The event signaled that Intuit will be doing more thought leadership as well, as evidenced by offering entrepreneurs one-on-one speed mentoring by Lean Startup Productions at the event.
Intuit’s QuickBooks Online development platform is also growing. Developer booths were in the spotlight at the event, and hundreds took Intuit’s Hackathon (link() challenge for a shot at winning a chunk of the $100,000 pot. Method:CRM took home the $55,000 grand prize for its Method:Donor app. Payments Cloud by Cloud Conversion, Safety Net by Jobber, and Service Titan won the $15,000 runner-up prizes.
Finally, Intuit’s Accountant Partner Network has always been essential to the vendor’s small business success. Throughout the event, Intuit speakers discussed “the power of we,” and ways in which the company is enhancing Intuit’s QB Accountant Edition to reduce the amount of time accountants need to spend on low-value data entry chores and increase the time they spend providing their customers with strategic business advice (some of which I note below).
Of course, the combination of a healthy pipeline of new QuickBooks Online customers plus a vibrant developer and accountant ecosystem bode well for continued growth.
Sometimes Less Is More
As Intuit CEO Brad Smith noted, Intuit is not focusing on creating more and more features for fewer and fewer small businesses. Instead, the company is looking for ways to make things easier for small businesses. According to Dan Wernikoff, senior VP and general manager of Intuit’s Small Business Group said, Intuit’s goal is to “make accounting completely invisible to small business owners.”
To that end, Intuit is plowing much of its R&D budget (which is about 16% to 17% of its revenues) into making its products simpler for small businesses, accountants and developers to use. Key announcements unveiled at the event included something for everyone:
Small businesses:
A full-service payroll solution, that handles payroll tax complexities
Automatic synching for bank and credit card transactions in QuickBooks Online
Easier ways to create reports, such as P&L and balance sheets in QuickBooks Online
Ability to accept credit card payments in QuickBooks Online in under a minute
A new payments offering that enables invoicing, accepting payments and updating books
A new QuickBooks Self-Employed solution to help freelancers, contractors and home-based business to separate personal and business finances
Accountants:
The big news here was the new QuickBooks Online Accountant edition, which gives accountants the ability to work on their clients’ books anywhere, anytime and provides:
Customizable dashboards that provides snapshots of action items and deliverables.
Toolbox for one-click access to any client, from anywhere within QuickBooks Online.
Books-to-tax integration, so users can automatically push bookkeeping data to Intuit Tax Online.
Integration with Box, to give accountants a better, easier way to share content and collaborate with their clients.
Developers:
Intuit is striving to create a “drop dead simple environment” for developers to build and sell their apps. To that end, Intuit introduced:
New developer experience, featuring seamless cloud integration, new SDKs, and simpler documentation to make it easier to call on QuickBooks Online APIs.
New payments API to allow deep integrations with QuickBooks Online.
New Apps.com marketplace to enable developers to reach more QuickBooks customers with their solutions. Over 400 apps are already integrated with QuickBooks Online and available on Apps.com.
Inspiration On Tap
Unbelievably (this from someone who attends many events and co-manages a small business!) all the speakers featured at QuickBooks Connect were inspiring and informative. The speaker line-up was very diverse, but one commonality is that all are successful entrepreneurs. You can watch them on demand at www.qbconnectlive.com. Pearls of wisdom were flowing like water, but here are some of my favorites, which I hope will inspire you too!
Arianna Huffington, chair, president and editor-in-chief of the Huffington Post: Stop wearing “busy” like a badge of honor! It’s not! Success is more than the metrics of money and power. We need health and well-being to be truly successful and happy.
Debbie Blox, CEO of Goldieblox, and winner of Intuit’s 2014 Super Bowl ad contest: You need to put yourself out there, and ask for what you need, because it takes a village to create a successful, sustainable small business! Be specific about what you want, and get advisors.
Tristan Walker, CEO of Bevel: You don’t get what you don’t ask for, and trials are really blessings in disguise.
Martha Stewart, founder and Chief Creative Officer of Martha Stewart Living Omnimedia, reminded us that we need to work really hard to be successful but must be compensated fairly for our hard work, and that once you’re through changing–you’re through!
Clif Bar CEO Kevin Cleary: Find people who share your passion and empower them to break things. The future of business is to upend the unacceptable.
Marc Andreessen, cofounder and partner of Silicon Valley venture capital firm Andreessen Horowitz: There’s a pivot happening with web, cloud and mobile enabling small businesses to use tech more aggressively.
Earvin “Magic” Johnson, chairman and CEO of Magic Johnson Enterprises and NBA legend: Have the courage to say I don’t know everything and to get help! Also, know your customer, serve them well they’ll keep coming back
Scott Cook, Intuit Founder and Chairman of the Executive Committee: Every one of Intuit’s successful businesses takes off via word of mouth.
Brad Smith, CEO of Intuit: We strive to be the operating system behind small business success.
Perspective
Intuit may have been born in the era of green screens and DOS, but it is now all in with solutions for today’s cloud, mobile, social and analytics technologies. However, one thing that hasn’t changed at Intuit is its commitment to helping small businesses thrive. This combination of strengths bodes well for fueling the next era of innovation for Intuit and for small businesses.
Disclosure: Intuit paid for most of my travel expenses to attend QuickBooks Connect.
If you’re one of the four million small and medium businesses (SMBs) that uses Intuit QuickBooks and are wrestling with a clunky sales compensation process, I’m serving up this next tech tidbit for you.
Last week, I was briefed on Xactly’s new Express integration with QuickBooks. This sparked my interest because SMB Group survey respondents always cite “attracting new customers” and “growing revenues” among their top three business challenges in almost every study the SMB Group conducts. But, it can be very difficult for small and medium businesses (SMBs) to execute well in this area. Sales and finance are typically coming at this from different vantage points, and its unlikely that the SMB has a dedicated sales comp expert–or the time and money to set up an enterprise-grade comp system.
So, if you’re like the vast majority of SMBs, you probably manage compensation with a concoction of Excel spreadsheets, emails, paper documents and manual processing. Besides giving everyone a headache, it can de-motivate sales people or head them in a direction that doesn’t sync well with your company’s goals.
Xactly (which also has an enterprise solution, Xactly Incent), introduced Xactly Express in 2010 to give companies with fewer than 100 sales reps–and without dedicated sales compensation staff–a cloud-based, self-service solution to “Incent right = pay commissions accurately, on time, reward behavior.” Xactly built Express on Salesforce.com’s Force.com platform, but as it grew the business, Xactly realized that a good 35% to 45% of its Express customers were also Intuit QuickBooks users. For them, QuickBooks is often the primary system of record. So Xactly decided to create new out-of-the-box connectors between Express and QuickBooks. The solution, which was introduced this week, will be available from the Intuit App Center later this summer.
This built-in integration provides an automated data feed from QuickBooks to Xactly Express, as well as single sign-on. Users can access Xactly through their QuickBooks logon to plan and manage sales commissions, bonuses and SPIFFs. Likewise, when you enter a transaction into QuickBooks, commissions automatically get calculated and credited to the right members of your sales team. If you’re doing business outside of the U.S. Xactly’s solutions support over 150 currencies and it provides customer support worldwide, 24/7. Currently, however, English is the only language that Xactly officially supports.
On the sales side, reps and managers can track their performance real-time on Express dashboards via the Web or with a mobile device. They can see where they are in terms of quota or what their commission will be when they’re working on a quote, or figure out which deals will deliver the best commission returns.
Xactly provides a library of customizable sales compensation templates (prospector, hunter, farmer, specialist and captain) to help small businesses get started. Xactly says that it takes about 6 to 10 hours to get up and running with the integrated Express and QuickBooks solution. Most of this time goes to verify that the data is feeding correctly between the two programs.
According to Xactly, even very small businesses can get value from the solution. Some of its 200 current customers start out with only one sales rep, but have plans to grow their sales teams, and want to get things automated from the get-go.
Pricing for Express is $30 per user/ month, and there is a onetime set up fee that ranges from $1500 to 5000, depending on the complexity of the implementation and set-up–perhaps a bit pricey for the lower end of the SMB market.But Xactly does offer a free 30-day trial so you can see if it will give you what you’re looking for.
The net-net is that if sales compensation is giving you a headache, Xactly Express and its new QuickBooks integration can provide relief–with the added bonus of helping align and empower your sales team to meet the ever-present challenge of growing your business.
Last week, Intuit and Salesforce.com announced that they would partner to integrate Intuit QuickBooks and QuickBooks Online small business accounting software with Salesforce’s small business CRM editions (Contact Manager, Group and Professional).
Under the terms of the deal, Intuit will resell a pre-integrated version of the Salesforce CRM application via Intuit’s App Center (as well as Intuit channel partners). Data will be automatically synchronized across QuickBooks and Salesforce, giving customers a real-time, unified view of the data, regardless of which application the customer is working in.
Intuit and Salesforce indicated that the integration should be completed this summer.
Above the Surface
Clearly, the deal provides Salesforce with a great entrée to Intuit’s 4.5 million QuickBooks users, gives Intuit a marquee CRM partner in the App Center.
This is also a very big deal for customers. While the small business CRM market is fragmented, Salesforce is a top CRM vendor in small business. Demand for integration between QuickBooks and Salesforce is evidenced by the fact that so many integration vendors—Dell-Boomi, Pervasive, Informatica, IBM-Cast Iron and others—offer this integration, which is typically priced at about $50 to $75 per month. With a direct QuickBooks-Salesforce integration, small businesses get a seamless way to synchronize data between QuickBooks and Salesforce.com without having to buy an additional integration service or solution. (Although pricing has yet to be announced, I’ve been told that it will be more economical than using third-party integration tools).
Below the Surface
The partnership also provides Intuit with substantial validation for the approach it has taken with the Intuit Partner Platform (Intuit Partner Platform: Changing the Rules of Cloud Platforms with Federated Applications). Intuit’s “federated applications” approach means that instead of having to rewrite applications from scratch, partners that have built their applications on other cloud platforms 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.
This approach removes a lot of development and partnering barriers—in fact, it seems that it removed enough barriers for Salesforce that it is, for the first time, providing its solutions via a partner’s platform, rather than requiring the partner to develop on Force.com.
Salesforce also gains a new venue for Chatter (free with all of its CRM offerings, including the small business editions noted above). As I’ve said many times, collaboration is the only activity that every employee in every company engages in everyday. In addition to getting another on ramp for CRM, Salesforce can also make new market inroads for Chatter and its collaboration strategy (Salesforce’s Dimdim Acquisition–Adding to a String of Collaboration Pearls).
Quick Take
Many analysts and pundits have been asking (and arguing about) whether this is a bigger win for Salesforce.com or for Intuit. At first blush, my take was that Salesforce would potentially have more to gain because Intuit would be promoting and selling Salesforce CRM and Chatter to its installed base.
Giving it a little more thought, I’m thinking it’s a pretty balanced deal. Having a high-profile partner such as Salesforce should help Intuit attract more end-user customers to its App Center, and pull in more developers as well—in line with its goal to establish the App Center as “the” app store for small businesses.
Small businesses win big too. Integrating business solutions shouldn’t cost more than the business solutions themselves, and this partnership should make integration and the benefits it provides more attainable for more small businesses.
Furthermore, there’s nothing exclusive about the deal for either party. Salesforce, will, of course, continue to partner up with FinancialForce, Intacct and countless other financials vendors, and Intuit can do the same with CRM and collaboration vendors. Which is a good thing—because small business is anything but a one-size-fits-all market, and neither vendor should presume that this is the best accounting-CRM pairing for all of their small business customers.
A hybrid computing platform lets customers connect the packaged small business software applications that they run on their own internal desktops or servers to applications that run in the cloud.
As discussed in What is Cloud Computing and Why Should You Care?, more software vendors are deciding to develop and deliver new applications as cloud-based, software-as-a-service (SaaS) solutions. This model helps them reach a broader market and serve customers more efficiently and cost-effectively. And, because cloud computing can often provide significant cost, time and ease-of-use benefits, more companies are choosing to buy and deploy cloud computing solutions instead of conventional on-premise software as new solutions needs arise.
However, most companies will continue to use a combination of both traditional on-premise software and cloud-based SaaS solutions. Think about it: You are unlikely to get rid of an application you’re running in-house just to swap in a SaaS solution. But if you need a new solution, you’re likely to look a range of options, including SaaS applications, to fit the bill. In some newer areas — such as email marketing or social media management — this may be the only way solutions are even available. In cases where you have a choice, you may simply decide that the SaaS model makes more sense, or that traditional deployment will work better for your company.
Why Should You Care?
Many software vendors with a strong presence and customer base in the traditional packaged or “on-premise” software world are developing platforms that provide new SaaS solutions that extend and integrate with their traditional on-premise applications. Some vendors provide app stores or marketplaces to make it easier for you to find solutions that will work well with those you already have.
For instance, Intuit has developed a platform and Intuit’s Workplace App Center so that customers can find and try applications that work with QuickBooks and with each other. Microsoft’s Software + Service strategy is designed to connect a myriad of Microsoft’s traditional software applications to Web-based SaaS solutions.
Recently, Sage launched its Connected Services offerings, designed to connect users of its traditional packaged software offerings with online SaaS services. The Sage e-Marketing application, for example, connects ACT and SalesLogix users with online email marketing services, while many of Sage’s accounting solutions connect with its new Sage Exchange online payment processing.
These vendors realize that most companies will use a mix of on-premise and SaaS solutions for a very long time. While companies can get some value from using some point solutions in a standalone fashion, in many cases, you’ll need to integrate the new SaaS solution with an existing on-premise application — such as integrating payroll to accounting and HR, or social media management to contact or customer management application — to get the value and efficiencies you need.
From the standpoint of their own corporate interests, vendors can increase revenues and profitability by selling existing customers new SaaS services (either their own or those of their partners) to connect to and extend on-premise solutions they’re already using. Having a strong SaaS play that is integrated with their on-premise solutions also helps them protect against competitive SaaS-only vendors that could steadily encroach on their turf.
More altruistically, these vendors want to offer their customers the means to bridge between the on-premise and SaaS solution worlds more easily. After all, it can be very confusing to even sort through and differentiate between all the solutions in a given category, and expensive and time-consuming to integrate them so they work well and easily with what you’re already using.
What to Consider
Most small businesses run at least a couple of on-premise software applications that are critical to their business. For instance, it’s a good bet that accounting and financials are on this list. Other applications will vary depending on the business you’re in, but could include things such as solutions to manage contacts and customers, projects, human resources, logistics or a function specific to your industry.
As you identify and prioritize new requirements to streamline and automate additional tasks, think about the overlaps they’ll require with workflows in the core on-premise solutions and processes that you’re using. For instance, if you decide you want to streamline payments processing, does your accounting software vendor provide a payments processing service that can easily snap into the accounting application?
By taking advantage of the SaaS offerings available from a vendor’s hybrid computing platform, your new solution will generally be up, running and integrated with the core application much more quickly. However, keep in mind that as you snap more services into that core on-premise application, your reliance on that anchor application will grow — arguably making it harder to switch should your needs change.
