Intuit makes two-pronged PaaS and SaaS push

Summary:Hard on the heels of its $170 million acquisition of SaaS vendor PayCycle, Intuit is extending its platform-as-a-service offering to support applications built and hosted on third-party development platforms - a PaaS strategy we've not seen from other vendors

Hard on the heels of its $170 million acquisition of SaaS vendor PayCycle (which I hope to post some further commentary on later today), Intuit is also announcing today an extension of its Intuit Partner Platform — a platform-as-a-service offering first launched a year ago — to support third-party development platforms [disclosure: I'm hosting a sponsored webcast later today with Intuit's Alex Barnett about application development in the cloud]. Read further coverage on Techmeme, AccMan, CloudAve.

The significant element of Intuit's PaaS announcement is that it is a land-grab to capture mindshare among developers on other cloud platforms, who can take their AppEngine, Amazon Web Services or self-hosted applications and make them available using Intuit's single sign-on, billing and QuickBooks integration infrastructure. Market reach being one of the key attributes developers look for in a new platform, perhaps the most appealing factor is that applications will be showcased within the Intuit Marketplace, with a potential reach to the four-million-strong installed base of QuickBooks accounting software customers and their estimated 25 million employees.

One of the five partners who are live on this new Federated Applications option at launch is Vertical Response, which was one of the first companies to be successful on Salesforce.com's AppExchange partner directory. The company grew rapidly by piggy-backing on Salesforce.com's existing market reach, offering an email marketing add-on that was a natural and simple extension to the core sales automation application. Vertical Response played an important role in helping to validate Salesforce.com's ecosystem strategy and it is an emblematic partner for Intuit's ambitions to build on its QuickBooks franchise in the same way.

Of the five partners announced at launch — web conferencing app DimDim, travel and expense manager Expenseware, performance management app Rypple, online appointments manager Setster and Vertical Response — only Expenseware is using Intuit's own QuickBase cloud database as its application platform. In a demonstration of Intuit's intent to draw in a diverse mix of developers, the rest are hosted on a variety of third party or self-hosted platforms, with .NET, Java and Ruby all represented.

What Intuit brings to the party when developers federate such applications to its platform is all the 'middleware' of cloud service delivery — single sign-on, consolidated billing, a consistent API for exchanging data between applications — along with the reach and trust of its established brand name. In that sense it is a mirror-image of Force.com and other cloud platforms out there, which have focused on what may turn out to be an outmoded notion of lock-in to a technology platform. Instead, Intuit's lock-in is to the service delivery infrastructure, irrespective of the underlying technology platform on which the applications themselves execute.

As a result, customers can easily swap between applications should they wish to. "You can switch to another application instantly, giving your customer complete control over how they want to automate their business" said Alex Chriss, business leader of the Intuit Partner Platform, in a briefing earlier this week. Intuit charges customers nothing to sign up to the Intuit Workplace, which is its name for the framework within which the federated applications are delivered. This adds a single bar across the top of the browser window, which handles the single-sign on and other account management services. The user then opens new applications in new browser tabs or windows, but without having to sign in again to each one individually. Its backend cloud infrastructure takes care of data integration between the applications and to Intuit Quickbooks on the desktop, which, if installed, is the preferred system of record.

Intuit's fee to developers is a revenue share on subscriptions that varies from 14-20 percent, depending on volume, plus a utility fee for platform usage if the application runs on the Intuit platform rather than a third-party resource.

Of course it is still lock-in, but it's a different kind of lock-in from what we've seen before, leaving developers free to host elsewhere and connect into rival PaaS ecosystems. Customers are more locked-in, but if they carefully choose add-ons that are also available elsewhere then it's probably easier to move off Intuit than another more closed platform. And when I asked whether it might be possible for another small business accounting application to offer itself on the Intuit platform, the team didn't demur. So you could in theory envisage someone offering a 'graduate from QuickBooks' offering within the Intuit ecosystem, even though I can't imagine it would be welcomed with open arms.

Topics: Enterprise Software, Cloud

About

Since 1998, Phil Wainewright has been a thought leader in cloud computing as a blogger, analyst and consultant. He founded pioneering website ASPnews.com, and later Loosely Coupled, which covered enterprise adoption of web services and SOA. As CEO of strategic consulting group Procullux Ventures, he has developed an evaluation framework t... Full Bio

Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.