Last week Intuit showed just how much it wants to win in the Australian market. The first QuickBooks Connect customer conference in Australia took a leaf out of the mothership event in San Jose.
It had celebrities galore (Christine Anu, Rove McManus, Michelle Bridges, Glenn McGrath), executive vice presidents (Sasan Goodarzi, head of the QuickBooks division and Rich Preece, head of the global accountants division, as well as local boss Nicolette Maury), a fancy location at the SCG and plenty of wining and dining. The whole thing must have cost a packet.
An audience of about 600 showed up, and for the first time at this type of event in Australia there were a good number of business owners among the bookkeepers and accountants. This reflects Intuit’s heritage in direct sales; it is a household name in the US, much as MYOB is in Australia.
Intuit is laying the foundations, slowly, for a similar presence here. It has spent big on TV ad campaigns to familiarise small businesses with the logo to avoid Intuit’s accounting partners from having to sell the brand itself, Preece told me at QuickBooks Connect Sydney.
Intuit is active in five markets; the UK, Canada, Brazil, France, Singapore as well as Australia. The company is literally giving away its software. Since QuickBooks Connect in November 2016, accountants and bookkeepers outside the US could get their first 10 QuickBooks Online licences for just $10 (or equivalent in local currency).
That strategy is working. Intuit’s results this week showed it had cleared the 2 million subscriber mark by 200,000, with 70 percent growth outside the US, to 433,000 subscribers. Overall growth was 59 percent, explained by the larger existing base in the US.
This suggests that targeting accounting professionals with cheap software and running brand-based advertising campaigns to SMEs is effective. Like Xero, Intuit plans to monetise other financial services through the software so it still makes sense to sell it at a huge discount.
Intuit is determined to build a global brand. The generational shift from desktop software to software-as-a-service (or cloud software) is a high speed, multinational landgrab.
Intuit may have cracked the marketing code for cloud accounting software but it is still several tools short of matching Xero in Australia and New Zealand.
Xero’s four-year investment in an integrated online tax program gives it a critical advantage in those two countries. And it is rewriting the way accountants run their practices with the notification-driven, API-happy Xero HQ (yet to be released).
Intuit is rolling out practice management tools to accountants in Australia and other non-US markets, the company announced at QuickBooks Connect Sydney.
The company added a tab to the QuickBooks Online Accountant app called Practice Manager to track tasks by client. The interface is a Kanban-style calendar with columns for tasks due today, this week, next week and the next 30 days.
QuickBooks Online Accountant lists the tasks for clients by their due date in each column.
Intuit has built an online tax app in the US which is already used by 10,000 accountants. However, building a tax app would take far too long to satisfy Intuit’s ambitions. Instead it is integrating with local tax software in non-US countries with the exception of Canada.
The first example is Tax Filer in the UK which has been integrated into QuickBooks Online Accountant. “A significant number” of accountants are using it, but Intuit won’t disclose the exact number, says Preece.
Intuit is looking for a similar partner in Australia. “There are not too many options, but the intent is to deeply partner in the same way as we have in the UK,” Preece says.
The big question is how long will this take? It took six months to integrate Tax Filer into QuickBooks Online, “but finding a partner can be six months or more”, Preece says. “On the roadmap we think about it as FY18 – we absolutely look at this as in the next 15 months.”
Once you have the tool you then need to convince people to use it. Accountants take a lot of convincing, especially with practice management which is the most painful change of all. I’d expect Intuit to keep pushing harder to win SMEs than accountants.
One interesting difference has emerged between Intuit and Xero. Intuit is going downmarket while Xero is going up. At Xerocon last year Rod Drury said Xero was working on increasing its transaction limits and features so that growing customers could stay on Xero for longer.
Intuit CEO Brad Smith has set his sights on the self-employed. It is an absolutely enormous market that is destined to grow even faster with the transition to a gig economy. Intuit estimates there are 155 million small businesses in the world and about 700 million self-employed.
“Right now there is a large pocket of underserved self-employed and micro-businesses in the Australian market,” says Maury. “There are more and more platforms that are helping people to do that with Uber, AirTasker and so on. It’s an area that will grow.”
Maury and Preece insist that the self-employed market is a potential gold mine for accountants and bookkeepers. At this stage, and with so much to play out, I’m not convinced.
With QuickBooks Connect, Intuit gave the old accounting conference a taste of American glamour and largesse, and drawn customers into the mix. Xero vs MYOB was just the warmup. Now, as the Yanks like to say, it’s “Game on”.
Sholto Macpherson
Thank you, Sholto,
This is a great article.
I use Quick Books online for my small consulting firm and I love it because as an accounting software consultant, I used at least 10+ similar applications the past decade and none was as intuitive. There are also other great features like new client/Gmail lookup and integration out of the box. From what I investigated, many very good add-on apps can easily integrate directly or via Zapier (or similar) into QB, and that is exciting, QB brings with them many American add-on solutions which also work over here.
I also work with Xero, and somehow Xero feels a bit more clunky when it comes to Bank Recons and journals. Xero’s ecosystem is by far more extended but their price of $50 p/m vs an approximate $10-25 p/m for QB makes a big difference if you are not planning to use many add-ons.
So, thank you once again, you highlighted their market and strategy very clearly. Now I know how to compare the Xero vs QB market. I think the problem QB might experience especially with accountants is this:
1. No “decent” rebate structure – no referral.
2. No practise management app -no mass adoption by accountants
3. No familiar name – no game
4. No differentiation (except price) – Xero will win especially for the more conservative.
Because Australian Accountants know and trust Xero… QB is actually taking a different “go to market” approach, They use a direct to market – get the small guys approach. The question is will they raise prices after that first low priced 12 months? I think they will because then you are somehow hooked.
I suppose it is a catch 22 situation because QB wants accountants on board but they cannot offer them much (except a fancy annual party and entertainment?!). On top of that self-employed people and consultants can easily sign-up without thinking about what their accountant might think or say. QB would have loved to do things the way Xero did it, so in all fairness, they are shooting for spot #2. Once people know this, it can make them a bit on edge,
Anyway, I wish them the all best, they have a great product and personally, I think they are targeting the right market…I mean what else can they do? What do you think i.t.o. their timing, competitive offering and channel options? How much of an impact will a bigger eco-system make and will it matter given they are starting out with the self-employed. I think the market is getting saturated, and the myriad of options will drive any person crazy.
Thanks, I am looking out for your any comments 😉
Hanno Winterbach
Hi Hanno – thanks for the extensive comment. Re: timing, competitive offering and channel options – that’s a whole new article! In short, I don’t think it’s too late. Intuit can spend like the majors and it’s the king when it comes to direct advertising of accounting software. The value of each subscription is worth far more than the price of the sub itself. It’s all the extra financial services (especially loans) that will be sold through the software down the track that will make it worth many times more than the sub paid. Intuit just has the cash to buy more subscribers up front and hold them for years before they become profitable.
Businesses will be happy to switch once from desktop to cloud, so it’s a golden opportunity. the attraction of swapping from cloud app A to cloud app B is considerably less. It’s a window of golden opportunity. Intuit is cashing in on it cos it can.
As a newbie to running my own business – and having to wade through all the “cloud accounting” systems – QB Connect was great – it enabled me to look at what is available and how it will integrate.
I am a MYOB user of many years – but have worked with larger systems and ERP systems. My business is for small business, so accounting programs like XERO, QB, MYOB AR, are what my clients are looking for. There were other new and interesting apps available to us to look at too.
As a soon to be qualified accountant, and a new business owner dealing with SBE’S and looking to expand with sole traders who – honestly – need the help of bookkeeping and accounting services – I am initially fairly interested in what QB has to offer….time will tell.
I really don’t think that this was an “all American” copy……we Aussies are of a different culture and always will be. I think that QB Connect DID connect with Australian business – yes they wooed us – but we are not quite that gullible…..we take our time to make sure we have the right business tools to assist us and give us the best Client/Professional link possible.
Thanks Veronica for the comment. I’m glad to hear you got a lot out of the conference. No disrespect intended by describing it as all American. It’s just a reference to the celebrity-heavy style of the program.
Yes will be intrested to see how it plays out. I too am not convince the micro market is an opportunity for accountants or bookkeepers as they tend to be DYI and with quickbooks pricing it is attractive to the DYI business owner
I have personally used both quickbooks for over 15 years and quickbooks online for last 2 and have to say Xero and MYOB have a better end user experience
Also the fact that quickbooks has no structure when it comes to chart of accounts every quickbooks we inherit is a totally disaster as client signs up and just actives feeds with no thought process
The one advantage they have is inventory but again if marketing to micro not sure the benefits
I also find it intresting how long it took quickbooks to launch online, as years ago at the early stages of xero in Aust we were asked to meet with various heads from Intuit to show us the protype and provide feeback on platform that was 3 August 2012.
The landscape is changing at the end of the day us as Advisors are driven by what is most suitable and beneficial to our clients. We have always passed any rebates from vendors to clients so personally quickbooks model is not an issue. In truth would prefer clients look after own subscriptions.
Hi Anna – nice to hear from you. Yes there was a delay in adding recommendations to those early visits of 2012. The team in AU is much bigger now so it’s unlikely to be that way. It’s worth noting that the (relatively) new QB boss Goodarzi is in favour of adding and releasing features globally. Eg. this new calendar for QBOA was beta tested and launched in six countries simultaneously. Great for split testing!
So the tax stuff will be driven locally but feature requests go into a bigger pot.
They have certainly made an impact!……..I have seen some Xero advocates start to turn their heads toward QBO and start to take notice, based on this event…………..I guess with all Xero’s growth and impact in Australia, QBO really had to do something………fast………….they have deep pockets.
So rolling out the red carpet and making a big thing is one method, and a price of $99 is pretty awesome…………Xerocon is around $900 for 2 days……………..
But what will Intuit do next?………….its the follow up that matters, not all this social media posturing.
What about price dumping as well?…………….selling SAAS for such a low price (they probably can sell this low because the US would be insanely profitable) is the strategy of a market bully…………a negative approach to a challenge from the new guy (Xero).
And this method highlights Intuits culture………….would they do the same to their customers?
One other thing is that a lot of the practice management “addons” are starting to get cosy with QBO…………….and rightfully so, they high customer numbers…………………They also have deep pockets and could be on the lookout for acquisitions.
Makes commercial sense for those addons to get in bed with Goliath, with or without protection.
Interesting times and hopefully SME, BKK and ACC are the winners.
Thanks Donnie. Yes, you’re right about the price. It will be interesting to see how much Xerocon is this year…
The price dumping is an interesting issue. Some accountants see it as a double standard – Intuit talks to accountants about value pricing and not competes on cost, and then turns around and competes on cost…
Rod Drury says SMBs aren’t price sensitive for accounting software, pointing to Xero’s rapid growth in Australia. But then you look at Intuit’s latest numbers with 70% growth in global markets where you can buy 10 for $10 and wonder whether that’s true…
As a UK accountant, we are seeing two key problems with the QBO/Tax filer combo.
Firstly, QBO marketing direct to the self employed is rather worrying, ”all you have to do is press a few buttons and your taxes are done”, approach is at best rather misleading. As we all know well software is a good tool, but not a replacement for professional advice and the self employed can make an excellent job of making a bit of a mess of it.
Secondly, while QBO are starting to develop practice management functions, it is at best at this stage very limited. This is somewhat of a barrier to accountants. It would be far better if there was the ability to integrate with some of the established Apps
Thanks James for the comment. Re: self-employed, Intuit intends to automate the coding in accounting software (especially QB SE). Eventually sole traders won’t have the opportunity to make a mess of it. They will just be responsible for gathering the data. And if you look at how the mileage calculator works, that gathers the data without anyone’s input.
The current product is essentially a beta compared to where it will end up.