If you want a good subject for controversy, ask a bunch of accounting software consultants and resellers where Intuit is going with its rash of purchases of higher-end software companies, a target group that includes both companies that sell direct and those that use a channel to reach end users.
Intuit is on a buying binge. In the last six months, the vendor has acquired the following companies: Management Reports ($92 Million); Eclipse, ($85 Million), CBS Payroll ($78 Million); OmWare, ($46.1 Million), and American Fundware ($26 million. A number of my acquaintances are ready to write off Intuit as a company that is snapping up old code and which is unlikely to support channel sales.
I don’t subscribe to that view. I think Intuit is getting some bargains, and in some cases, companies that have good products that needed some investment, or which have enough user base to keep existing products going while high-powered upgrades are developed.
A couple of weeks ago in the column, "Channel Assisted Sales," I discussed Intuit as a company that already had a channel before it starting buying companies like OmWare, which markets the MasterBuilder construction package. My view is that the Intuit Advisor Program, that enrolls CPAs, is a very effective channel program, just not a reselling channel. But the potential is there to grow a reselling group.
Of course, all of this buying is not directly aimed at reselling. CBS Payroll appeared to be a move to help shore up Intuit’s existing payroll business. It is filling in gaps in its CPA applications, with plans for such products as QuickBooks Write-up later this year. It will clearly seek to buy companies to fill in gaps in this area.
But it is in accounting applications that Intuit is getting the most notice. Eclipse markets ERP-class software that sells for $75,000 to $250,000. This kind of price tag signals that Intuit is amassing a line that has applications sold at retail, through VARS, and through direct sales, something that rest of the mid-market has not done.
Intuit will not turn MasterBuilder or FundWare over to retail or direct sales. If it can successfully convert a significant portion of the 206,000 mid-market companies that use QuickBooks to the mid-market level QuickBooks Enterprise Solutions, it will stir significant demand from VARs who want to broaden their lines in the face of a dwindling number of software vendors.
Intuit is in all of these channels for the long haul.
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