by John M. Covaleski
Mountain View, Calif. - Intuit Inc. has consolidated its accounting industry-focused operations under one umbrella organization that includes the single largest concentration of public practice account-ants in the United States.
Intuit’s new "Profess-ional Accounting Solutions" (PAS) group has an established base of 185,000 individual public practice accountants. By contrast, the American Institute of CPAs has 337,867 CPA members, but just 130,995 are in public practice, with the remainder in corporate accounting, education or other non-public practice areas.
Intuit’s new group combines its Professional Products tax preparation software line with its "Advisor" organization, - which includes QuickBooks consultants and members of its payroll services referral program. Intuit plans to use the group to collectively market to and communicate with the 185,000 individual accountants who are either an Intuit advisor, use one of its tax prep products, use QuickBooks or work with clients who use QuickBooks. (That 185,000 does not double-count practitioners using more than one Intuit offering.)
With the combination, Intuit expects to more effectively reach accountants and to leverage its relationship in the industry in marketing products and services to the overall business community. The group’s creation is the culmination of a two-year product growth strategy in which Intuit has more than doubled its tax prep software customer base and expanded its flagship accounting product QuickBooks in several directions, including more than 100 vertical industries.
PAS is headed by Dan Manack, who was general manager of Intuit’s Professional Products group, comprised of its tax preparation software products, Pro Series, Lacerte and the former Tax and Accounting Software Corp. Intuit’s acquisition of Lacerte and TAASC in 2000 and 2001, respectively, more than doubled its tax-prep user base to 105,000.
Intuit has not determined a specific strategy for PAS yet, but it appears the vendor will use the consolida-tion to:
- Develop new marketing initiatives for QuickBooks.
- Build platforms that help accountants expand their businesses.
- Cross-market software and services to the accountants.
- Communicate more directly with its accountant constituents in setting future product and service strategies.
"We have a tremendous opportunity to communicate everything we offer to accountants together and to let them know that we are a one-stop shop for many of their needs," said Manack, who joined Intuit in January from a senior position with Peregrine Systems, a global provider of infrastructure management software and services. He has also worked for Unisys Corp. and Texas Instruments during his 15-plus years in technology."Before, the main reason we contacted accountants was to ask the if they wanted to buy or renew their tax software," Manack added. "We’ll still be selling, but we’ll also be talking to accountants about the problems and challenges they face, so we can get recommendations on how we can address them."
All of Intuit’s top accounting industry-focused executives were moved into the new organization, where they retain their former responsibilities, For example, Rich Walker, a point person for QuickBooks and Kristi Coleman, a managing director in Professional Products, are both directors in PAS.
PAS’s primary mission, according to Manack, is to educate accountants about Intuit’s ever-expanding line of products and services, and to get feedback for future development. "We want to bring ourselves to a partner-level status with accountants and make ourselves more sensitive to what we offer them," he said.
Intuit observers applaud the new group’s potential to further expand Intuit’s already daunting market presence. QuickBooks alone has some 2.5 million users, making it the most widely used and recognized business application in the country.
"Intuit sees accountants as their most important relationship and their closest connection to small business, and this gives them a way to corner those accountants," said David Farina, technology industry analyst for William Blair & Co., a Chicago-based investment firm.
"Accountants are seen as the ultimate influencer on small businesses’ decisions. This (PAS) makes Intuit more able to develop and leverage them as a channel," said Helen Chan, an analyst with Yankee Group, a Boston-based technology industry analyst.
However, Randy Johnston, the Hutchinson, Kans.-based exec-utive vice president of technology trainers K2 Enterprises, noted, "This may just muddle their market message because Intuit’s tax prep and the consulting operations are distinctly different audiences."
Johnston and Farina both noted that PAS could jumpstart Intuit’s payroll services business, which expanded significantly in May when it acquired Fort Worth-based CBS Employer Services Inc., the parent company of CBS Payroll. "Intuit has a great payroll service, but nobody’s using it. This could be a great way to drive business there," Johnston said.
Asked about PAS having more public practice accountants in its fold than the AICPA has, Ron Eagle, president of the Information Technology Alliance consortium of technology consultants and vendors, noted "Intuit has a better story to tell than the institute."
In recent months, Intuit’s story has been about rapid expansion of all its products - an expansion that laid the stepping stones for creating PAS. "All these new pieces are coming together and this new organization is the opportunity to tie everything in one place with a single line of sight," according to Manack.
In addition to doubling its tax prep software market by acquiring Lacerte and TAASC, during the past two years Intuit has also vastly expanded its accounting and business management software market capabilities with steps that include:
- Releasing an "Enterprise" version of QuickBooks designed for businesses with as many as 250 employees - up from the product’s traditional user base of companies ranging from home offices to 20-employee shops.
- Allowing third-party soft-ware companies to develop links enabling the free flow of data between their packages and QuickBooks. More than 100 vertical and other custom applications of QuickBooks have been established by this program.
- Creating an accountants version of QuickBooks to better enable practitioners to work with their customers.
- Acquiring vertical industry software specialist development companies and using those deals as bases for further product/ service development in the respective industries.
Since 2001, Intuit has acquired Denver-based American Fundware in the nonprofit industry; Omware Inc., a Sebastopol, Calif., construction industry specialist, and most recently, Blue Ocean Software Inc., a Tampa, Fla.-based software vendor that helps businesses manage information technology resources and assets. It has also indicated a willingness to buy more.Intuit’s expansion into vertical markets figures to be a key element of PAS. "We want to make sure that accountants understand the value proposition that Intuit offers and vertical industry development is part of that," Manack said. "I want to communicate vertical industry information to accountants servicing those markets and enable them to expand their vertical services if they want."
Any expansion into providing vertical industry-focused training to accountants could be similar to vertical industry training that the AICPA has provided for many years. For example, Intuit would likely want to leverage its relationship with CPAs to expand its new nonprofit industry software presence, and one of the AICPA’s best-known annual sessions has been its nonprofit industry conference.
Intuit may have already tread onto AICPA territory in July by making its first-ever appearance at an ITA conference. ITA, whose members include some of the most successful technology consulting organizations affiliated with CPA firms, was an AICPA membership section until May.
Attendance at that ITA meeting by Intuit’s Rich Walker and Steve Cook has fueled speculation that Intuit may be interested in acquiring a vendor of horizontal accounting software for middle-market companies, larger than the typical users of QuickBooks. That speculation is also being fueled by its acquisition of American Fundware, whose nonprofit industry products are designed for larger users than QuickBooks targets.
Manack did not comment directly about what Intuit may acquire, but he noted that there is "a blurring of the lines" between low-end accounting software like QuickBooks and the products designed for the middle market. Eagle speculated, "It’s pretty clear they are going to be in the channel business (use resellers) and as they look at CPAs, they should be interested in developing relationships with the real power movers that can get their message across."
Intuit has not determined exactly how PAS will communicate with accountants. But Manack said that additional seminars and Internet-based "Webinars" are possibilities.
He also said that he will not be especially visible in the accounting industry, and instead will leave most of the direct industry contact with the Intuit people already providing that-such as Walker and Steve Blundell, vice president of acquisitions and innovation.
