Contact: Scott Denne
Intuit has carved out an incumbent position for itself around its accounting software, and that’s a position it needs to leverage now while the competition is limited. The company is in an enviable position as a provider of software to small businesses, a market that has taken off in recent years as lower-recurring-cost SaaS products are easier to sell to cash-flow-conscious small businesses.
Most of Intuit’s recent acquisitions have been small. If it were to look to make bigger deals, it could, for example, use its payroll software businesses to help it get deeper into human resources with an add-on such as PeopleMatter, which provides software for managing hourly employees, or iCIMS, which offers a suite of cloud HR software for smaller businesses. Intuit has willingly spent heavily on M&A in the past, including its $423.5m purchase of marketing software vendor Demandforce in 2012.
Intuit has used the popularity of QuickBooks to spring into other corners of small business software, including payments, payroll and marketing. All of those have become solid businesses and are growing nicely, each in excess of 10% annually; however, competition has been limited in the small business sector. Now other firms – including Web hosting giant Go Daddy, marketing software company HubSpot and collaboration vendor Zoho – are making headway into the market. Today’s successful startups scale quickly, making internal innovation at Intuit an untimely choice. If the company doesn’t scoop up promising young companies soon, it could find itself with much more competition for deals and customers in the small business segment.
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