Intuit - The $1 Billion Cloud Computing Company

One Billion Dollars. That's the size of Intuit's cloud computing / SaaS business.

I think that it's pretty clear that if you asked around amongst the cloud intelligentsia about the world's largest cloud computing and SaaS firms, Intuit would not be particularly top of mind.

This was in fact the premise of a small group session I attended last week that featured the head of corporate strategy for Intuit being interviewed by the lead cloud computing financial analyst from Goldman Sachs. It turns out that Intuit already has more than $1 billion of SaaS revenue and growing - but people just don't think of Intuit as a cloud computing firm.

The reality is that Intuit sees cloud computing as a strategic from many perspectives - it helps protect them from piracy in their consumer businesses and it makes it far more easy for them to sell add-on products and services in the B2B businesses. It helps them bring products to market faster, deliver more innovation and integrate across their product lines. It helps their overall margins since they can sell direct to their buyers, without the need for retail or CPA or VAR channels.

He said Intuit has around 50 million customers, and SaaS has already helped tremendously with cross selling and upselling across the 50 million. He also indicated SaaS is key to their global expansion strategy.

He said they are starting to think of their core products like gateways - get someone using Turbotax on-line and it becomes the gateway to sell a raft of add-on products and services. In the cloud computing model, it's just that much easier for Intuit to link their products together, and to promote new products from within their gateways. This is great business model innovation coming from what many people think of as a desktop software company.

Intuit's consumer tax prep business is now mostly SaaS, they just acquired mint.com to have a cloud-based personal finance business. In the B2B world, they acquired paycycle for cloud-based payroll, they have several other cloud based small business services, they have a large base of clients in Quickbooks on-line and they are doing very visible platform as a service work in partnership with Microsoft.

To me the most interesting part of this is the potential impact on the channel. Historically, when I thought of Intuit, I thought about going to Best Buy or Costco to purchase a box of software a retail. Cloud computing will change all of this - and the first thing to go will be the retail channel. Why pay to create physical packaging, pay for shelf space at retailers, and pay margin to retailers when you can sell your gateway products through your website, and you can cross-sell all of your other products through your gateway products. Margins instantly and dramatically increase, as does penetration of add-on products.

I still think there are questions about going to direct website and in-product distribution vis a vis the CPA and VAR channels, particular in the B2B market, but overall I'm glad to see Intuit so enthusiastic about their cloud business.

At Intacct we love this because Intuit is effectively priming the pump for a huge number of businesses to run their core financial applications on the cloud. Whether it's the small business that moves to collaborative cloud accounting with their CPA firm, or the midsized business that has outgrown QuickBooks and wants to move to a more advanced system, I love the momentum Intuit is generating for Intacct and the whole cloud computing movement.