CIO
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Intuit, known for personal financial products like TurboTax and Quickbooks, isn't considered a corporate IT company nor does it have any grand
designs to expand beyond its consumer and small business roots into the enterprise. That would seem to make Intuit CEO Brad Smith an odd
candidate for the IDG Enterprise CEO Interview Series. But Smith has deftly steered what was once only a shrink-wrap software company into the
cloud and mobile worlds and has led a re-engineering of Intuit's IT organization into a customer-focused (actually, 'customer back' focused), driver of
innovation and value.
In this conversation with IDGE Chief Content Officer John Gallant, Smith talks about that IT journey -- which included five CIO changes in half a
dozen years -- and what it means to really be a 'connected services' company in this new age of consumer IT. This discussion is invaluable for any
business or IT leader struggling to embrace mobility, social media and the cloud. You'll find it reassuring to learn -- according to Smith -- that you
already have the transformational IT employees you need. You just have to liberate them.
Tech Titans Talk: The IDG Enterprise CEO Interviews
Q: Let's start by talking about Intuit's 'connected services' strategy. What does that mean and what does that transformation entail?
A: As a company that's 28 years old, we've seen a lot of technology and business model transformation. We've seen it go from DOS to
Windows, from Windows to the Web. In 2008, when we were celebrating our 25th anniversary, we recognized that this next generation of customer
usage was going to be what we call 'connected services'. Connected services are multi-platform, multi-device, often with data in the cloud. There
are a couple of key components to connected services that we focus on. One is the ability to harness and capitalize on social. [That means] user
contribution, where more people contributing creates greater value for the total ecosystem, and the oil, or the gold, in that is the data. The data
that creates better customer delight, the data that helps people make better decisions in their financial lives. So, connected services has an element
of social to it.
It also has an element of mobile, because the computer's moved to the palm of our hand. We've talked about [that] we need to stop thinking
about these as phones. Very few people even make a phone call on an iPhone anymore. It's about the 1,000 times processing power of what
landed a man on the moon in the 60's now walking around in the palm of our hand. It's bridging this digital divide where you look at seven billion
people in the world, two billion have a PC. And you have five-and-a half billion with phones in their hands that are getting smarter every day. That
gives us the ability to help solve important financial problems for customer groups we could have never reached through just software and
services. The third element for us in connected services is [that] there really are no natural barriers now, which is where global came into play for us.
You have customers adopting products and services that may not have been designed or localized for their markets. But we have a world economy
now and we can see that with everything from the Euro and sovereign debt and the implications to us of China's GDP going down, to you name it.
We are now very interconnected.
Our transformation as a company is we have moved past DOS, past desktop and Windows, to now we have 62% of our revenue that comes from
connected, recurring revenue. 35 million of our 50 million customers use our cloud-based products, and every new R&D dollar we invest, every
new product or service we try to sell now has a mobile-first or a cloud-based implication to it. And the more open our platforms can be, the better,
because that enables user contribution and social to happen.
Q: What's next in that 'connected services' strategy?
A: Well, we don't see any of those things diminishing. We think those are going to be enduring. In fact, you hear a lot of people talking now
social, local, video, mobile, those kinds of concepts. I do think there are two underpinning elements we're starting to see emerge. One is more of a
platform, as opposed to an application approach - the ability for us to open up our platforms for third-party developers, for end users to contribute
value. At our [recent] leadership offsite, we spent time talking about this. How do we actually start to recognize that we have a platform here that
others can build and add value to, and extract value from? The second is data. Data not as an asset for us, but data to create delight. We view the
data as the customer's data.
I'll give you a tangible example. Today we have 4 million small businesses that use QuickBooks. The loneliest job in the United States is being a
small business owner. They have their uncles and their aunts giving them all kinds of advice on, "Here's the real estate you should buy, and here's
who you should buy your supplies from." What you often find is they want to talk to somebody who looks like them, not in size, but industry, and
the whole nine yards. So now we have the ability to take the data in the cloud, using QuickBooks online, and help a four-person florist in Boston
know whether the money they're spending on their seeds is the best price they could have gotten, or whether their accounts receivable is pretty
much the norm of others who look like them, and to make better informed decisions. Our ability to start to leverage data to create customer delight
by helping them make better decisions is the next big chapter we're working on as well.
Q: Do the kinds of customers you deal with understand that they're buying cloud? Do you sell them cloud? With this new strategy, how do
you change the way you market to customers?
A: We never use the industry terms. We define it in their terms, which is: what is the problem they're trying to solve, and what's the solution or
benefit this gives them? So, for example, our online services are always focused on 'anytime, anywhere' automatic backup; and that is what they
need. Or the ability for you to begin [work] on the PC and then access it on your smartphone, or be able to grab your tablet to finish the process.
That's the problem they need to solve.
We have GoPayment, which is the mobile payment solution that takes your regular smartphone, you put a piece into the ear jack and then swipe
a credit card. It sends you an email receipt and it updates QuickBooks back in the office, so you never have to go back to the office to do your
accounting. You just go from one carpet cleaning job to the next and everything's already reconciled for you. The cloud never comes out in our
conversation with them.
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