QuickBooks Online is clearly the focus of Intuit’s development in accounting systems – that should be clear to anyone who works with Intuit. However, what is also clear is that the product does not have all the features found in QuickBooks desktop, and that there is a lot of resistance to the product from many long-time users and ProAdvisors. So, why is Intuit so focused on this product? Let’s examine QuickBooks Online, where I think it stands today, where I think it is heading.
This article is part of my series on Intuit and the future of QuickBooks. The articles are:
- Intuit’s Long-Term Vision
- QuickBooks Online Is the Future for Intuit (this article)
- QuickBooks Online Accountant Connects Them All
- Why QuickBooks Self-Employed Is Important to Accountants
- Is QuickBooks Desktop Dead?
In my article on Intuit’s long-term vision I came up with five key points that I believe guide all QuickBooks product development at Intuit:
- Working in the Cloud will be the new normal
- Mobile technology will be the primary tool
- Data collection is critical, and the Cloud will allow for faster Machine Learning
- One-person businesses and contract workers will exceed 40% of the workforce by 2020
- Globalization is key, and emerging industrializing countries will rely on mobile technology
Let’s look at QuickBooks Online and how those five key points have driven Intuit’s focus, and the development of the product.
QuickBooks Online: Working in the Cloud
Well, that is obvious, isn’t it? This is a cloud-based product. It is based on Oracle and is mostly hosted in Intuit’s own data centers. In recent years, some functionality has been developed on or moved to Amazon Web Services (AWS), which I find interesting. A few years ago Intuit was focused on their own data centers (do you remember their big data center outage?), but Rick Richardson of Technology This Week (a paid subscription newsletter that I highly recommend) says that lately there has been a “growing sense that things may be more secure in the public cloud,” services like AWS. It is interesting to note that Intuit’s most comparable competitor, Xero, has moved entirely over to AWS in 2016.
Here’s a chart from Intuit showing the growth of QuickBooks Online subscribers:
Note that “TAM” is “Total Addressable Market.”
Clearly Intuit has focused on growth of their cloud-based accounting product. They are experiencing rapid growth in the US market and they are starting to grow in the non-US markets where they have recently released versions.
QuickBooks Online and Mobile Technology
The increased use of mobile technology in our society is very obvious. To someone of my generation, looking at my kids and grandkids, painfully obvious.
QuickBooks Online addresses the key point of mobile technology well, with a fairly robust and flexible app that is available on iOS and Android systems.
There are a couple of interesting points relating to QuickBooks and mobile technology.
- One aspect works with the globalization key point. In some countries, you will find that there are many more people using mobile technology than there are using web technology via browsers on a computer. Development of mobile technology is one of the key factors behind Intuit’s entry in many of these “emerging” industrial countries.
- Another interesting point is that Intuit is starting to place emphasis on mobile first. That is, they are starting to roll out features on the mobile app before they are available in the browser version. You may start to see features that are only available via the mobile app at some point.
Data Collection Is Key to QuickBooks Online
When you work with a cloud-based product, the developers of that product have a complete copy of your data. They can see everything that you do, including what kind of transactions you work with, how you classify information in your bank feed, how long it takes you to pay outstanding bills, and more.
Here’s a graphic from Intuit that shows how important it is to them to have access to all of this data.
All kinds of information flows through the Intuit ecosystem, and Intuit is paying attention. One key advantage that Intuit has over the other developers of online accounting products is that Intuit has access to a much wider scope of information, since they have their own tax, payroll, payment and personal financing products. By looking at your data and combining it with all the other users’ data, Intuit builds a picture of how people use their products and what kinds of decisions they make. They are creating computer algorithms that take this aggregate data and apply concepts of machine learning to modify how QuickBooks Online works with you.
“Machine learning is the ability of computers/algorithms to learn and draw conclusions from new data without being explicitly programmed to do so” – Steve King, Emergent Research, http://www.emergentresearch.com/