Standardizing the business data model

One of the huge headaches when using cloud applications (or indeed, any applications) as a small business owner is the difficulty of getting them all to work with the same data. The cloud makes it effortless to sign up for online sales automation, email management, invoicing and expenses management. But it’s a different story if you want to have new subscribers to your email newsletter flow automatically into the sales prospect database, or to have invoices and expenses automatically update your bookkeeping package. Back in the bad old days, you’d get a quote from your friendly local computing solutions provider and start saving up for a big integration project. But aren’t we supposed to have left the old ways behind with the advent of cloud apps? If only it were as easy to connect the dataflows between the apps as it is to get them up and running independently.

Today’s announcement of Intuit Anywhere offers an answer to this problem, at least for businesses that run their finances on QuickBooks. Intuit Anywhere is a toolkit that helps third-party developers automatically bring QuickBooks data into their online applications. The integration is bi-directional, which means changes made in the third-party application can be automatically updated back to the master record, ensuring the data stays in sync. [Disclosure: Intuit is a past client].

Here’s the economic power of the cloud in action: since the toolkit is deployed to the cloud-hosted Intuit Partner Platform, the integration only needs to be implemented once to become available to every customer. There’s no extra charge for the small business and no implementation hassle. Intuit Anywhere even provides a convenient single sign-on process using the OAuth authentication system. Applications that are already onboard with the program include Bill.com, Concur, eBay, FreshBooks, MavenLink and Method CRM.

Wouldn’t it be great if all cloud application integration could be this easy? Unfortunately, there are quite a few obstacles to making this a more universal system. It only works because Intuit has enforced a common data model within the Intuit Partner Platform that all third-party applications have to comply with. Without this overarching data model consistency, you’d encounter all the common problems that plague on-premise integration projects: multi-field items such as phone numbers and addresses stored in different field configurations, inconsistent rules for similar data types, conflicting categorizations, and so on.

Cloud application vendors are aware that this is a problem and some have begun half-hearted attempts to find solutions. I recall Dennis Howlett writing about an initiative a while back by Xero, FreeAgent and Kashflow to promote the use of Simple UBL for data exchange between SaaS applications. As far as I know, that initiative went nowhere, despite relatively limited aspirations. More recently, analysts at Gartner have been talking about the notion of third-party cloud services brokerages that will enable integration between cloud apps. I’ve written about this a couple of times but these brokerages would still benefit from more effortless data integration under the covers.

In the absence of common standards agreed by industry, de facto standards often emerge. Thus the Intuit Anywhere announcement may have an impact beyond the vendor’s own installed base, if it leads to a groundswell of cloud application vendors in the small business market all converging on Intuit’s business data model.

There are of course many disadvantages to coalescing around a single vendor’s proprietary standard. One question that I instantly have in my mind is whether a US-centric vendor will have included in its data model all of the wrinkles that are important to businesses in other parts of the world. Then there’s the question of how the data model and API could be used without having to go through the Intuit cloud platform. That would cut out costs and increase independence, but would also lose Intuit’s assessment process that helps assure certain standards of security and governance.

In the end, it all comes down to economics. If the Intuit platform becomes a cost-effective vehicle for flexible automation of business systems based on multiple best-of-breed cloud applications, then competitive advantage starts to kick in. Other vendors will have no choice but to react, either by joining in or by introducing an alternative standardization model into the market.