Intuit's secret to going global lies in thinking local

More than 45 million people are using the developer's connected services, more than double its installed base for hosted services just four years ago.
Written by Heather Clancy, Contributor

Salesforce.com may be capturing many headlines this week for its proclamations about enterprise cloud and social software, but I'm far more interested in the cloud aspirations of a very different company, Intuit. 

(Disclosure, I occasionally write about small business management issues and mobile applications for the Intuit Small Business Blog, although I do not work directly for the company.)

Like Salesforce.com, Intuit has been making its case this week to analysts. Central among its talking points have been its "connected services" strategy, including a global push for its QuickBooks Online offering. 

Rolled out in beta in July 2012, QuickBooks Online is now used by about 360,000 small businesses in 130 countries.

But this is no amorphous cloud application that ignores international borders. It has been carefully localized, so that invoices and statements properly reflect the "home" currency of the small-business owners using it and so that the right accounting policies are used.

"The QuickBooks Online platform allows for customers configuration, user-defined tax rates and country-specific interactions that make a small business in the Philippines, for example, feel like QuickBooks Online has been developed explicitly for their country," said Dan Wernikoff, senior vice president and general manager of Intuit's Financial Management Solutions division. "Highly customizable content makes QuickBooks Online local everywhere, helping the world's small businesses and accountants quickly get set up and running their businesses anywhere in the world."

There are three editions of that software, priced started at $15 per month: QuickBooks Simple Start, QuickBooks Essentials and QuickBooks Plus.

Thinking local isn't just good for Intuit's customers, it is enabling the company to collect an enormous amount of data about them -- data that analysts at Cowen consider to be one of the company's key strategic advantages as the company sells more of its applications in the cloud and developers more services that deliver information to mobile devices.

Consider that just four years ago, Intuit counted 17 million people as customers of its hosted services -- today, its connected services offerings have pushed that number up to 45 million, according to data released this week by the company.

"We view Intuit as a company still on a journey transforming itself from a good business to a great business," write Cowen analysts Peter Goldmacher and Joe del Callar, in a research note dated Sept. 19, 2012. "The decision to transition the model from desktop software to connected services is as profound a transition as we've seen in the software space. The data the company is now able to capture about who its customer are and how they behave is its core asset and should be the driving force behind its growth and margins for the next decade."

The data it is collecting will also allow Intuit to better tailor its application workflows and interfaces for new generations of users and for specific vertical markets, the Cowen analysts suggest. Intuit acquired DemandForce earlier this year to aid with that vertical push.

The Cowen research note points out that more than 70 percent of the customers for the Intuit GoPayment mobile payments technology are entirely new, as are 50 percent of the customers for its TurboTax iPad application. Some $100 million in fiscal 2012 revenue came from products that didn't exist just three years ago, according to Intuit's estimates.

Approximately 65 percent of Intuit's $4.2 billion in annual revenue for fiscal 2011 came from connected services.

Intuit is expecting revenue growth of between 15 percent and 17 percent for its current fiscal year primarily from these areas:

- Applications that dovetail with its core business, such as payroll services

- Deeper penetration into verticals, buoyed by the DemandForce acquisition

- Connected services that include both cloud services, such as the Intuit Payments Network, and more mobile applications for smartphones and tablets, such as Snap Payroll or Intuit Fasal (used in India by more than 1 million farmers to gather crop prices) 

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