by Seth Fineberg
Mountain View, Calif. -- Despite a major restructuring of a key business unit coupled with a series of management changes at accounting software provider Intuit Inc., tech industry followers opine that the reshuffling more closely resembles “growing pains” than signs of internal strife.
Just weeks after restructuring its Professional Accounting Solutions unit into two divisions, Intuit announced that Tom Allanson, senior vice president of the consumer tax group, and recently hired chief marketing officer Tom Weigman were leaving the company.
However, industry analysts agree that the departures will have little effect on the company, and were likely due to personal reasons.
“Management has been known to turn under Steve Bennett.He has very high expectations, but the timing is perfect if you look at it,” said David Farina, equity analyst with Chicago-based William Blair & Co. “Right now you are in a season where what really matters is execution on tax software. True, there has been new management over the last couple of years, and investors do get nervous when they hear about these changes, but really it’s not that big of a deal.”
In December, Intuit said that it was splitting its PAS unit into two groups, Pro Tax, which encompasses the tax compliance units — Pro Series and Lacerte — and Accountant Central, a unit responsible for driving the company’s overall accounting strategy.
Vice president and general manager Brad Smith was tapped to head Accountant Central and Karl Grass leads Pro Tax. Dan Manack, who formerly led the PAS unit, was slated to leave the company this month following a transition period.
As for dealing with the most recent departures, Intuit president and chief executive Steve Bennett is temporarily assuming Allanson’s responsibilities, while Raymond Stern, Intuit’s senior vice president of corporate strategy and development and a member of Intuit since 1998, has absorbed Weigman’s duties.
Weigman was hired in August 2003.
Allanson had been with the company since April 2002 and “decided it was a good time to look at other opportunities,” said Intuit spokeswoman Holly Anderson. His leaving comes as Intuit gears up for the tax season, when the company’s TurboTax product helps generate roughly 25 percent of the company’s annual revenues of $1.6 billion, or $423 million.
Katherine Jones, managing director of enterprise applications research at Boston-based Aberdeen Group, is also looking past Intuit’s internal shifts towards what she describes as “a company on the move.”
“Intuit’s biggest issue now is not who is leaving for where or why, but taking small business services further; getting their payroll solutions and incremental products working well,” Jones said. “The change in their accounting focus is a good thing too. They’ve been trying to find the right mix for what is the important distribution constituency for them [accountants and CPAs] for a long time.”
Anderson maintained that the company has not missed a beat in its forward path because of the recent changes.
“This really isn’t even a bump in the road for us. One thing you will always find is that we are never satisfied with where we are,” Anderson said. “Steve [Bennett] is driven. We are working with customers to understand their needs as we continue to evolve and challenge ourselves to be better.”
“We are looking to fill [Allanson’s] spot for the future but, right now, the heavy lifting is already done for tax season and it’s a matter of selling the product now,” she said. “It’s as good a time to leave as any.”
Aberdeen’s Jones also added that Intuit could be a good contender for the low-end, midsized enterprise space, especially with their recent vertical product offerings, including QuickBooks for the nonprofit and manufacturing sectors, and their point-of-sale product.
“Quicken and QuickBooks have always been easy to use,” Jones explained. “What an easy assumption that you could build something that is a next step up and is equally easy to use.”
Meanwhile, product recommenders such as Matt Camden, chief technology officer at Peoria, Ill.-based Clifton Gunderson Technology Solutions, aren’t entirely certain what to make of the recent changes at Intuit. He is more aware of those that have occurred in the accounting software market, and the loyalty his clients have to Intuit’s products.
“As an outsider, it’s hard to really say what is going on inside Intuit, but what I do know is that they do not want to be third in the race to be the top accounting solution,” Camden said, referring to Microsoft, Best Software (whose parent company recently agreed to purchase competitor Accpac International Inc.), and Intuit vying for attention in the small to midsized accounting application space. “Our clients are very loyal to Intuit and there is no doubt they are trying to go up market with their products, but they just aren’t getting much traction beyond small business clients. That is what they need to work on.”
