QBES Switches and Stretches

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Intuit is relying on its channel to give QuickBooks Enterprise Solutions a heavy push into the midmarket. The vendor launched a reseller program last summer, reaching out to its hefty pool of QuickBooks ProAdvisors and appealing to resellers of competitive products, namely Microsoft GP (formerly Great Plains) and the Sage MAS line.

The hope was to attract "stretchers" from QuickBooks Pro and Premier who could benefit from larger data file capacity, additional seats and more security as well as "switchers" from other products that were either too complex or too costly for their needs.

At the time, about 94 people had signed up for the program.

Partner Insights

A year later, there are 207 resellers, about half of whom are ProAdvisors and the other half of whom sell competitive applications but wanted to add Enterprise Solutions, according to BJ Schaknowski, director of sales for Intuit's Mid-Market Group.

Some of these resellers are small shops while others are big names, like Clifton Gunderson, a regional accounting firm with 45 offices across the country. But they're all acknowledging the same problems and banking on Intuit to solve them.

Dawn Ashpole of Portland, Ore.-based SBA Services has been a ProAdvisor since 1997. She joined the pilot program about a year ago and has signed about 100 customers, increasing her business 279 percent as a result.

Some switchers are on an older version of an application and don't want to pay $10,000 or more to upgrade and the high consulting costs associated with it, Ashpole says. For her current customers who want to upgrade, the learning curve is virtually non-existent as the application looks and functions nearly identically to the other QuickBooks editions, she says.

John Sauder, Clifton Gunderson's director of entrepreneurial services agrees.

"We have many smaller clients using the QuickBooks Pro line of software. It was somewhat of a struggle to take a step into Sage or Microsoft products-it was either the technology or the price," Sauder says. "We saw Enterprise as filling a gap and we found our QuickBooks users are very accepting to move to Enterprise because a lot of screens look the same, so the accounting person doing the input has a high comfort level."

Overall sales are increasing in the direct sales force as well.

Beginning in the fourth quarter of fiscal year 2008, Intuit reported the "active customer base" of customers who are on a paid Full Service Plan as opposed to those who still own the product without the plan. The active base grew 22 percent from 27,000 customers in FY07 to 33,000 in FY08, but there are about 56,000 total customers, about 10,000 of which are switchers, the rest stretchers, according to Schacknowski. Sales averaged about 4,000 to 5,000 units per quarter, with 15,000 total units sold in the last fiscal year, up from 13,000 in FY07.

One problem resellers and Intuit itself continues to face is a double-edged sword, according to Angus Thomson, vice president and general manager of Intuit's Mid-Market Group. Because QuickBooks is so well-known as a small business application, it's difficult to convince larger companies that Enterprise Solutions is a fit.

"We have to educate the market that we have companies that come to us with $50 million in revenue-share the customers' stories to overcome that somewhat negative halo," Thomson says. "That's why we're branding it Intuit Enterprise Suite, to show we're behind it and bring up Intuit as a brand."

The suite now includes three Web-based applications that can be used in conjunction with the desktop accounting package.

* Intuit Field Service Management ES, a partnership with Corrigo which allows mobile workforces to schedule service calls and appointments from the road using wireless devices.

* Intuit Warehouse Management ES, a system powered by AccuCode to help product-based businesses get more from their inventory by tracking the items they have, where they are housed in multiple warehouses and how to get them to their customers.

* Intuit Sales Management ES, a beta-version product designed by Intuit that helps maximize the sales pipeline by helping sales people capture, access and share customer information quickly.

Pricing for QBES 9.0 starts at $3,000 for a five-seat license and includes a 12-month Full Service Plan that comes with 24/7 tech support, product upgrades and interactive training tools. Prices for the new applications will be announced this fall.

New features include database concurrency that allows administrators to back up files online while others are in the system instead of having to kick everyone out, which was a major complaint in previous versions. Report speed has increased by an average of 44 percent. Multicurrency support has been added after learning that 37 percent of Intuit's customers do cross-border transactions. It improves interaction with online banking, tracking information directly from and into QuickBooks. And it now comes in 25- and 30-user versions (from the former cap of 20), which Thomson expects to increase even further over time.

"We're comfortable with the performance level at 30 seats. As the Sybase database expands in capability, we're going to expand capability," up to 500 employees, Thomson says.

The vendor also unveiled the Intuit Partner Platform, where developers can use QuickBase and Adobe Flex to build more applications to integrate with QuickBooks, with Intuit handling the hosting and connectivity for a 20 percent revenue share and additional charge for using Intuit's servers.

But Intuit is doing some revenue sharing of its own, changing the commission plan for resellers.

Resellers originally received 25 percent margins across the board with additional discounts if they sold more deals each month. Now the baseline is a per-deal discount of 35 percent for five users, 40 percent for 10 users and 45 percent for 15 seats and above.

Intuit also will provide a 5 percent commission of gross sales to those who receive at least 60 out of 100 Net Promoter score-a 1-to-10 ranking by customers asking whether they would recommend their reseller to peers.

While the percentage of sales coming from the channel is relatively small today (Intuit would not reveal exact numbers), company executives say they would like to see as much of the sales coming from resellers as soon as possible.

To help them achieve that, Intuit has dedicated four channel managers to sales enablement, and filters resellers with about 50 percent of their leads.

Some resellers say they feel competition from the direct channel and wish their leads could be protected more upfront. They also would like more in the way of training and co-op marketing dollars, which Intuit is working on with PR templates and promotional materials and plans to launch an Intuit Solutions Provider University later this year.

The program costs $1,500 to join along with a $1,000 annual renewal and continuous certification. VARs with multiple locations will no longer be charged extra for the other offices.

Resellers say they appreciate Intuit's willingness to build the program to fit their needs and to listen to what some of their competitors are doing right when it comes to helping the channel succeed.

Judy Thornell is the president of Sage reseller Baytek. She now also serves as president of a new company, BCG US, which focuses on growing companies that could benefit from enterprise solutions, which Thornell says has a "reasonable cost of ownership."

"Account managers are very experienced in sales and business and able to provide valuable assistance helping close a sale and getting more information for the customer and from the customer, trying to understand which product is appropriate," Thornell says. "The channel is being built from the group up and is still being fine-tuned. However, Intuit is listening to the channel as to what is needed in a successful VAR program and they have a dedicated team and product roadmap in place."

Alexandra DeFelice is Associate Editor of Accounting Technology and can be reached at alexandra.defelice@sourcemedia.com.

INTUIT COMPANY SNAPSHOT

HQ: Mountain View, Calif.

Founded: 1983

Key Product: QuickBooks Enterprise Solutions

Number of Resellers: 207

Web site: www.quickbooks

enterprise.com/solutionprovider

Phone: (877) 300-7370

Email: IntuitSPProgram@intuit.com

Revenue: $3.1 billion

Employees: Approximately 8,000

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