Up-Market Moves: Customers Drive Intuit's DirectionUp-Market Moves: Customers Drive Intuit's Direction

Without us knowing it, customers had started using our [small-business software] in far larger enterprises than we had ever dreamed, Intuit's Cook says.

Tony Kontzer, Contributor

November 19, 2004

2 Min Read
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One evening in the mid-1990s, Intuit Inc. founder and chairman Scott Cook had agreed to speak at a gathering of enterprise software vendors. He couldn't figure out why, but he couldn't get out of it, either.

"So I get up to speak, and I say, 'I don't know why I'm here,'" Cook says. "None of your customers have ever bought anything we make, and none of our customers could possibly afford anything you make or figure out how to use it. And they laughed."

As it turned out, that wasn't completely true. "Without us really knowing it, customers had started using our [small-business software] in far larger enterprises than we had ever dreamed," he says.

It wasn't the first time Intuit had been pulled up-market. It had seen its popular Quicken finance-management product for consumers adopted by small businesses years earlier. At first, "we ignored it because it made no sense," recalls Cook. "We were building consumer software. But eventually, we started paying attention."

That paved the way for Intuit to make two moves to address the small-business market. First, in 1991, it acquired a one-man operation called Standard Payroll and turned it into an automated payroll service that today boasts more than 800,000 customers. Then it developed a small-business version of Quicken that it dubbed QuickBooks, which was designed to help small companies navigate the complex world of debit and credit accounting.

Once again, Intuit was caught by surprise when midmarket companies began snatching up QuickBooks and signing up for Standard Payroll. Then it discovered that QuickBooks reached even further, into the realm of smaller enterprises, competing with products such as Great Plains (now a subsidiary of Microsoft). The result was QuickBooks Enterprise, a souped-up version of QuickBooks that has had a dedicated development team for nearly four years.

With its presence in the midmarket increasingly secure, Intuit set out to look for possible acquisitions that would help it break into more midmarket niches and even secure some more business customers. With its acquisition of Turning Mill Software Inc. in 2000 and the subsequent release of its QuickBase information-management application, Intuit was on its way. Four more key acquisitions followed over the next two years, and Cook says more acquisitions will follow--when the right opportunities arise.

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