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Archive for April 16th, 2008

Intuit’s Radical New Flex + QuickBase Cloud Platform

Posted by Bob Warfield on April 16, 2008

The Cloud Computing Platform News just keeps on coming.  I got a briefing (under embargo) on Intuit’s new Cloud Computing Platform based on Adobe Flex with QuickBase.  The new platform will be formally announced in a press release tomorrow morning, but I wanted to go over what I learned from the briefing.  I spoke with Bill Lucchini, VP and GM of Inutit QuickBase and Peter Vogel, Group Manager of Intuit’s Developer Network and came away very impressed: this thing has legs!

Timing:  As I mentioned, formal announcement is tomorrow, and this will be accompanied by a private beta.  Intuit will limit this beta to folks that are capable of doing something interesting on the platform, like Adobe’s Flex, and are willing to commit to building a real app.   This will not be the first 10,000 or 20,000 served like Google’s AppEngine beta.  It’s invite only.  Things will open up more with a live Version 1.0 in the Summer.

What’s different about this platform versus Amazon, Google, and the gaggle smaller companies in the Cloud Platform space like Bungee, Coghead, Rollbase, et al?   Intuit went out to a series of focus groups drawn from their developer community and other sources and came back with 3 requirements for the platform:

– What Intuit calls “Table Stakes”:  You have to be able to create great apps for business.  There can’t be something limiting about the platform for this market.

– It has to be possible to create a profitable business on the platform.  Intuit wants to help out with Demand Generation via their already very large ecosystem, and they want to set their pricing at a level that makes it possible to create a reasonable business around the platform.  I’ve written about this problem before with being too expensive.

–  It has to save significant development costs and pain by doing all the stuff that everyone keeps reinventing.  Billing, integration with QuickBooks, provisioning, email connectivity, and all that sort of thing.

Bill Lucchini is very focused on the importance of the ecosystem and the economics for customers that choose this platform.  In his words:

This is about opening it up to a huge ecosystem of developers.  People have been aware for a while that we’re all building the same stuff over and over again.  We’ve brought a lot of assets together to fix that.  Competition is good: it will drive even more innovation for platform users.

The ecosystem that Intuit brings is indeed huge.  There are 3.6 million QuickBooks users, 250 thousand QuickBase customers, and the Intuit Developer Network sports 75 thousand developers.  These are not just tire kickers, these are folks in the business of developing around QuickBooks and other Intuit properties.

Some things I notice about the platform:

– It’s got both “easy” and “powerful”:  You can write your clients in Flex.  That’s power.  Hard to identify a stronger client platform.  On the server side, QuickBase offers “easy”.  All sorts of issues are automatically handled for you with a point and shoot declarative interface.

– The server side needs further development:  “easy” is cool right up until you can’t do what you need to do.  This is an open issue for the platform, and one they’re aware of.  I told them server side Flex processes for business logic and custom SQL of some sort (ala Force) against the tables would cover the bases.  They wouldn’t say what they plan, but didn’t object to my thoughts.

Where does it fit relative to the competition?

– Amazon:  Still the most proven and flexible of the Cloud Platforms.  But, if you need to integrate with QuickBooks data (which you will if you target small business with a business app!), or if you want a much simpler development environment, Intuit has a clear win if they deliver what they promise.  The services Intuit will offer are much higher level than Amazon.  They are true SaaS application services.  I think it makes sense even to partner the two.  For example, we discussed that QuickBase has no S3 equivalent, so if you want to host a lot of data, it might make sense to have you app on the Intuit platform use S3 for large objects like streaming video.

– Google:  AppEngine is a simpler and less capable vision as it stands than what Intuit is talking about.   Yet, there are some similarities.  If they keep beefing it up, AppEngine will be more focused towards Web 2.0 consumer apps and Intuit is more in tune with SaaS business apps.

– is the closest analog to what Intuit is doing.  As I’ve written in the past, there are significant economic barriers for Force–it simply costs too much for ISV’s.  The impression I get is that Intuit is well aware of this and plans to commoditize that pricing to a much lower level.  Their model is to be priced competitively with Amazon.  Like Salesforce, Intuit is bringing a platform with an ecosystem and data already in place and considerable market momentum.  Which one makes more sense for your application?  I would think that building around QuickBooks is a little more strategic, but that Salesforce will carry you higher in the foodchain to larger businesses.  It’s an interesting comparison.  Either way, Intuit brings serious competition into Salesforce’s world that they’ll have to respond to.

–  The Little Guys:  Bungee Labs, Coghead, Rollbase, and a number of others are in this category.  It’s hard to see how this announcement is good news for them.  As Lucchini says, “What they’re doing is innovative and interesting, but they’re creating a toolkit.  We’re focused on creating successful profitable businesses.  These platforms are going to be about network effects.  Good apps bring users to a platform.  It’s a chicken and egg business, and we have both the chicken and the egg.”

– Collateral Damage:  Not sure how companies focused on having ERP-centric suites with a platform will react.  It can’t be great news for a NetSuite or competitors like little Intacct to see this.  Likely they’ll view that QuickBooks is for smaller businesses than they’re serving and that they’re the next step when you outgrow QuickBooks.  Remains to be seeen how true that is.

The Demo came next after the positioning discussion.  Honestly, we covered all the bases above very quickly since we were all on the same page about the state of the market.

Someone mentioned that the standard for Cloud Platforms was to bring up an app that everyone in the audience can log into within 5 minutes or less.  No problems here.  We had the good old “Hello, World” up and running very quickly.

The process went like this:

– Start a new Flex project.  Their stuff is fully integrated with Eclipse and Flex Builder via the Intuit QuickBase SDK.

– Drop their library into Flex Builder.

– Respond to a brief connection data dialog that establishes where in the cloud your stuff is connecting.

– They then selected the Master Sync App template, which includes synchronization with QuickBooks.

– Select a Developer Key and login.  Developer Keys are connections to the cloud or to a project there.

–  A Model/View/Controller framework is automatically generated in Flex.

–  You can then select fields from QuickBooks or your other QuickBase tables.  Data transfer objects and business delegate objects are automatically create for your Flex code to access.

–  Deploy the app.

–  Connect to it.  There are multiple datasets available.  In this case for Sample and Live data.  Test data is another option.

Done!  Here is the Hello, World app they created for me:

Given more time, say 1 hour, they can create a much more sophisticated Customer Service application:


After the demo, I was prompted to dig into The Techie Stuff.  I wanted to understand what some of the use cases were.  In other words, what kinds of apps were their “insider” early customers working on?

– Customer Service

– Employee Scheduling

– Existing software co’s looking to add new modules

– Solution providers looking to move from 1:1 custom work to converting their domain knowledge into applications so they can sell products 1:M.

Pretty typical business apps.

As mentioned, the server side is limited currently to what can be done with QuickBase.  That involves quite a lot, BTW.  All the usual lookup fields, snapshot fields, formulas and such are all there.  Deeper server side processing will require more development, but Intuit are thinking about it.

I asked about SOA.  I build an app and I want to release API’s for my customers to use in accessing my app.  Their story is pretty good hear.  The interface between Flex and the Cloud is RESTful.  You can use the same API’s to allow outside apps to access data you make accessible.  Pretty straightforward.  Accessibility is tied to a developer key.  Publish that key to folks using your API, set the right permissions, and you are there.

Two other key issues are multitenancy and scalability.  Apps created on this platform are multitenant from the get-go, and there is a lot of great support.  For example, suppose you change the DB schema and need to roll out the changes to all your customers.  They have a DB Migration Wizard that automates that chore.  Metadata is there that lets customers add fields or whole tables to their tenant.  This can be enabled as self-service in an app and does nto require a develoepr to handle it.

In terms of the services the platform offers, it’s quite a comprehensive list:

– Login/Security/Permissions Management (Row/Field level access)/Provisioning

– Database:  Handled by QuickBase.  Includes full metadata customizability.  Create new tables or access QuickBooks.

– Reporting:  Automatic report creation with point and click customization.

– Email notifications

– Billing and Provisioning:  This is a lot of work that Intuit has already figured out and will undertake on your behalf.

– REST-based SOA

Parting Thoughts:  What’s not to like?

Not much.  It’s a remarkably complete offering based on developers I talk to in the SaaS world.  We briefly discussed Lock-In, and I think Lucchini has the right attitude:

We never want to lock anyone in. But we want the customer to choose us because we offer more value. That’s why we didn’t create our own language like Apex, we chose Flex. We won’t stop anybody from leaving. Vendors have to double down and work harder to keep customers loyal.

No question.  Lock in doesn’t really work anyway unless everything in site is proprietary.  Look at how fast Google AppEngine got hacked to run on Amazon Web Services.

Another question I have is what impact this new offering will have on the uptake of the SaaS version of QuickBooks?  My wife is a CPA and is very aware of QuickBooks.  She tells me that in the classes and seminars she follows, customers are told that SaaS QuickBooks is less capable and less flexible.  I can’t say whether that is a current opinion or not, but wanting to be a part of this new ecosystem may be a new driver for customers to move from installing QuickBooks to SaaS QuickBooks. 

These are exciting times in the Cloud Computing world.  Another big player has thrown its hat into the ring with a lot to offer.  I’m also glad to see Abode and Flex are playing, though I didn’t get a chance to talk to anyone at Adobe.  We’re still waiting on Microsoft and any others to show themselves, but the bar keeps getting higher for what they’ll have to deliver!

Related Articles

TechCrunch picks up the story.  The title, “Watch out Salesforce…”, makes it pretty clear who they think is at risk from this move.

Posted in saas | 16 Comments »

Google’s Paid Click Rates: Google Needs the Best Clicks

Posted by Bob Warfield on April 16, 2008

More gnashing and moaning about Google’s paid clicks says Larry Dignan.  This is one of the factors that’s hammered Google’s stock prices as the world worries that Google is slowing down suddenly.  There’s been a lot of back and forth, and Google for its part say they triggered some of this by changing how things work to improve the quality of the click throughs for advertisers.  Tim Armstrong, Google’s president of advertising and commerce in North America has said:

“We have a clear drive that a consumer should see really good ads,” said Armstrong, speaking at a Bear Stearns media conference in Palm Beach, Fla. “The outside world looked at that change as not healthy for Google, (but) advertisers got increased conversion. For us we looked at that as a positive change.”

Google has also said they would compensate elsewhere, for instance by “dialing up” advertising on YouTube.  The latter remark is interesting in the wake of Marshall Kirkpatrick’s article that suggests YouTube dominates video even more than Google dominates search.

I’m not here to predict what results Google will turn in very shortly, but I am here to say that Google’s focus on increased conversion of the click-throughs is worthwhile. 

Why has Google been so successful?  As I noted in another post, MySpace reports $10M profit on $500M in revenues.  Google, by contrast, got there on $80M in revenues.  It was wildly more profitable in other words.

Profit is a sign of market inefficiency somewhere.  In this case, the inefficiency is the gap between how well advertising with Google works versus advertising on MySpace.  In fact, Google was onto a far better mousetrap almost from their beginning.  Being able to eliminate an inefficiency in the markets let’s a company play the spread between the status quo and the new higher level of efficiency that they can offer.

Google’s move here is aimed at preserving or perhaps even widening that gap in how well their advertising works versus how well other’s ads work.  It’s an interesting chess move.  There could be several outcomes:

–  The market doesn’t care.  Google just gave up a bunch of click throughs for no gain.

–  It is a competitive response.  We’re not privy to how big the efficiency “gap” still is.  Ohers may have made progress closing the gap and this is a defensive move by Google to keep it open.

–  It is a prelude to price increases.  If Google has made the gap even wider, they have earned the right to raise prices because the ads are more effective.  With a tough economy, the volume may be down, so it may be important to be able to increase prices.

Profitability is hugely important, and becomes the primary factor in many endgames (the other being strategic value if you are not profitable).  Being unreasonably profitable has always been a Google strength.  We shouldn’t be surprised if they try to manage for continued profitability even perhaps at some expense to raw growth.

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Andrew Chen wants to know what it means when services like Alexa and Compete can be so wrong about Google and, “these same, somewhat flawed approaches are driving the decisions of media buyers in a $40B+ global advertising industry?”

As I told Andrew in a comment to the post, it means the quality of clicks really does matter.  Hence Google’s great results.  Hence their continued dominance.  Hence it’s hard to sell advertising if you don’t have an unfair click quality advantage.


Posted in Marketing, strategy, Web 2.0 | 2 Comments »

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