Intuit today announced it has entered into a definitive agreement to purchase Demandforce for approximately US$423 million. Demandforce has been primarily focused on SMB segment offering products and services to help SMBs navigate and thrive in connected economy by automating their marketing and customer communications, building and maintaining a strong online reputation and raising their profile with their local consumers.
Speaking on the acquisition, Kiran Patel, EVP and General Manager, Intuit Small Business Group said, “Demandforce sits at the sweet spot of Intuit’s SMB customer base and is consistent with our goal to help our customers save time and make money. With a compelling customer value proposition, SaaS model and high growth profile, Demandforce will provide opportunities to grow Intuit’s customer base and revenue per customer over time.”
Analyst Speak
Intuit is continuing to build its capabilities in cloud application areas focused on alleviating the pain points of small businesses. Based on surveys conducted by Techaisle over the last 3 years, improving sales and marketing has shown up consistently as the top business pain point of small businesses. Moreover small businesses are increasingly struggling to grow their revenues, retaining and positively connecting with their customers in a virtual world. Techaisle survey data shows that nearly 45 percent of small businesses are not sure how social networking tools can help promote their business. 68 percent of small businesses mention that “their business success depends upon a strong relationship with the customer, providing goods and services highly customized to their needs and being responsive to their demands”. These same small businesses are gravitating towards social media campaigns (48 percent), email marketing initiatives (68 percent) to generate new customer leads and maintain existing ones.
Demandforce acquisition certainly helps Intuit in extending its existing offering of website services. It rounds off the full suite from “get found” to “increase exposure” to “extend communications” to “consolidate presence”.
Beyond the capabilities of Demandforce, the acquisition brings into Intuit’s fold many different small business vertical industry solutions. These verticals are typically ignored or only addressed by web-hosting providers. They constitute a very large part of the SMB universe but with a dichotomous adoption of technology. For example, salons and spas use very limited technology but still want to increase their customer base beyond the usual “word-of-mouth”. On the other hand wealth management businesses use advanced and emerging technologies but strongly desire customer expansion, communication nurturing, feedback mechanism and certified reviews to positively impact their business.
Success of the acquisition will be dependent upon Intuit’s ability to integrate Demandforce with its web services, back-end systems such as Quickbooks and cross-sell across both Demandforce and Intuit customers.
It is a move in the right direction.
Anurag Agrawal
Techaisle
Techaisle Blog
Convincing conference, unified messaging from all executives, substantial customer success stories including SMBs, considerable partner alliance conversations, convergence showcase, expanding geographic footprint, emerging technologies, mid-market design point, and end-to-end solutions story. What can I say?
At the recently held Dell Annual Analyst Conference, in Austin, the centerpiece of messaging was Dell’s relentless pursuit to be an end-to-end IT solutions provider and a trusted partner. Michael Dell in his conversation with the analysts proved that Dell has changed the conversation from product to services.
“Many new change vectors are going on - Data centers are becoming server centric/compute centric, networking is being combined with computing and storage and security are becoming one – Dell has the ability to understand where the puck is going”, said Michael Dell. To that extent Dell is busy building products and solutions from which customers can capture value.
Dell has made 20 acquisitions since 2008 to build a solutions delivery capability. Its R&D, which is increasingly being focused on storage, server, security and networking convergence went up by 40 percent in the last year alone. A key aspect of the strategy is to develop converged solutions that include storage, security, servers and wrapping it all together with services and deliver end user solutions that help customers compute in environments with pervasive data access.
Since his return as CEO, Michael Dell has steadily moved Dell into new areas for higher growth and profitability. Although Dell’s revenue has remained within a narrow margin, growing by only 1.5% from 2008 to 2012, its net income after taxes has grown by 18.5% within the same time period. Dell today has greater diversity in its solution offerings and broader geographic footprint. Both storage and security are higher margin products and with the acquisition of EqualLogic, Compellent and recently SonicWall, Dell’s margin story continues to improve.
Dell’s end-to-end solutions story is also beginning to look complete with portfolio having evolved from PCs and servers to services. Dell’s software portfolio is not where it should be but Dell is building out its capabilities for on premise software, cloud applications and software embedded in hardware. Consistent with the overall theme it wants to offer software solutions that are easier to buy, easier to use and easier to extract value.
Even the channels organization is perfectly aligned and focused on continuing to grow its PartnerDirect program that was started five years ago and is now approximately US$14 billion business for Dell. The channel’s organization headed by Greg Davis is continuing to make its rules of engagement very partner friendly and empowering and training its channels to provide value to their customers. Greg is ensuring that there is consistent
channel engagement across both mature and emerging markets with deal registration, compensation neutrality and executive priority. With over 135,000 training modules delivered in the last year alone it aims to provide simplicity, enablement and a strategy to win datacenters together. To take advantage of new social media networking platforms, Dell has also launched a new social media training program for its channel partners. The training program, developed based on Dell’s own experiences, provides its channel partners access to a number of useful social media tools and tips, including links to all of PartnerDirect’s social media platforms, a Q&A forum, registrations for both a live virtual training session and on-demand refresher courses.
Executing on its vision
Dell’s vision is being driven by five key market dynamics:
- Emerging markets growth
- Consumerization of IT
- Explosion of data
- Alternative computing platforms
- Corporate IT complexity
Dell has not only been able to integrate the businesses it has acquired but also has successfully scaled them. Dell Boomi, a middleware for cloud, originally acquired for its ability to bring cloud integration to SMBs, is equally at home in large enterprises. A recent example is OneWorld Alliance which has implemented a new information technology (IT) hub based on Dell Boomi AtomSphere cloud integration, designed to substantially reduce complexity, cost and time involved in linking new member airlines into the alliance.
SMBs' "CIO in a box"
Whenever an IT vendor presents customer stories I look for sincerity in the customer’s dialog and contribution of the IT vendor to customer’s success. Current Motor, an Ann Arbor, Michigan based SMB stole the show and my heart. With only 12 employees it uses full end-to-end solutions from Dell in the most interesting yet fundamental ways. Remember that it is only a small business; nevertheless Dell put a team together to bring to fruition integration with salesforce.com and digital dashboard enablement of Electric Scooters six months sooner than expected. Solutions used – mobility, cloud, hardware, software, services. As Laura Flanagan, Executive Chairman, Current Motor put it, “Dell is her CIO in a box.” And it all started with Laura approaching Dell with a business pain point. The result -- sincerity in dialog and value-add by Dell.
As Dave Johnson, SVP, Corporate Strategy said in his presentation, the “heart of the customer is the CIO.” No worries, SMBs, if you do not have a CIO, Dell can play that role for you.
Next Steps for Dell
- The entire Dell team has to work harder to get its messaging and capabilities heard by its current and potential customers because I feel Dell’s end-to-end
solutions story has not yet reached the crescendo it deserves - By focusing on mid-market design point Dell should not forget that small businesses have different needs and the last thing they want is a scaled-down version of product meant for mid-market businesses. Other IT vendors have tried in the past with zero to limited success
- Dell should formulate and articulate its mobile strategy beyond its planned introduction of tablets and smartphones, especially for the SMB segment that are adopting mobility solutions faster than enterprises
- Technology pain points have now overtaken business pain points for SMBs. Dell can be that unique IT Vendor that helps SMBs sort out and identify relevant technology options (cloud, mobility, infrastructure, managed services, virtualization, social media, business intelligence, marketing automation) by becoming a trusted advisor and business consultant
Anurag Agrawal
Techaisle
Dell’s Cloud Services & Solutions Certification is comprised of three primary pillars in providing cloud services and solutions:
- Cloud Builder – for channel partners that can provide services to design and develop a cloud infrastructure for their customers. This is typically suitable for VARs.
- Cloud Provider – for channels that have the capabilities or want to acquire skill-sets to operate a cloud networking operating center (NOC) enabled with Dell technology to provide cloud services. These include: Infrastructure as a Service (IaaS), Platform as a Service (PaaS) or Software as a Service (SaaS). This is typically suitable for SaaS ISVs, Service providers.
- Cloud Service Enabler – for those channel partners that want to act as aggregators or brokers identifying, securing and integrating the appropriate set of cloud technologies and services from multiple sources and operating the resulting cloud for their customers through a set of managed services. This is typically suitable for MSPs & Systems Integrators.
Techaisle believes that Dell’s new channel program is a step in the right direction. Techaisle’s research has shown that businesses are looking for advice and guidance from their channel partners on the use of cloud services & solutions. In addition, Techaisle’s channel research has also shown that many channel partners who want to offer cloud-based offerings to their business clients, themselves need help and support from their vendors. The new training requirements will ensure that channel partners have the required cloud-related skills to be the best in business. Dell is also making it easy
for partners to demonstrate their infrastructure-related skills by accepting their membership in channel programs of recognized vendors in technology areas of security, networking and virtualization. In addition to getting preferred pricing, Dell’s Cloud Partners will also have access to financing from Dell as well as support engagement from Dell Direct Sales and Services.
A key feature of Dell’s program is the recognition that channel partners vary greatly in their size, skills and resources. The program allows partners to transition to the cloud computing model in a manner they feel is best suited for them – be it as a cloud builder, cloud provider or as an cloud service enabler (aggregator). The program also allows partners to supplement Dell’s technology with their own technology services, giving them significant flexibility to offer Dell-based cloud offerings without having to write-off up their investment in their existing services.
Dell has steadily evolved its channel strategy over the last five years and this new certification represents an important step in that evolution. Given this steady evolution, Dell’s channel partners can expect Dell to further fine-tune channel’s role in the cloud, develop additional support programs and also expand its cloud-based offerings for the channel.
Anurag Agrawal
Techaisle
This week, Dell unveiled its Ultrabook, XPS 13 featuring an edge-to-edge glass, near “frameless” display, all-day battery life, and the latest innovative technology for a superb overall user experience. Starting at 2.99 lbs and less than a quarter-inch at its thinnest point, the XPS 13 sports the latest Intel technology, such as Rapid Start and Smart Connect, to enable users to be productive, connected and responsive anywhere.
While Dell did not participate in this year’s CES, Dell’s announcementwas a pre-planned set of announcements by Intel’s OEM partners to unveil their new UltraBook PCs, Intel’s response to Apple’s MacBook Air. What made Dell’s announcement stand out was that while the new ultrathin PCs like MacBook Air have generally been targeted at consumers, Dell has added features and functionalities for businesses, including the ability of IT staff to manage the XPS 13 efficiently and effectively. These include features like standard Trusted Platform Module for BitLocker Data Encryption and optional remote and on-site managed services (i.e. ProSupport after-sales service and Configuration Services such as custom imaging and asset tagging) that allow SMBs to proactively manage their IT
devices and applications, avoid downtime and increase their IT infrastructure availability.
Also while, Dell XPS 13’s starting price point is the same as Apple’s MacBook Air, Dell delivers much more at $999 than Apple does at the same price.
The obvious question that arises is why would Dell adapt a (presumably) consumer-focused product launched primarily at a consumer-oriented show, to also meet the needs of businesses? The answer lies in Dell’s increasing focus on the SMB market since the creation of its new SMB Business Unit a few years back. While SMB business lies under the CSMB group (Consumer & SMB), until recently headed by Steve Felice, SMBs’ needs seem to be getting ingrained into Dell’s DNA.
Dell has increased its focus on SMBs on a worldwide basis and this is also being reflected in Techaisle’s SMB tracking studies. In Techaisle’s recentstudy on purchase intention of Ultrabooks, SMBs rated Dell as their number 1 choice for Ultrabooks, even before the products were announced. Techaisle expects that at least 3.6 million Ultrabooks will be purchased by US SMBs in 2012, resulting in 1 in 5 PCs (desktops and laptops) shipped to SMBs. With increased mobility, size and weight of mobile PCs have become important factors for road warriors, who want to be able to work from anywhere and everywhere they go. While Ultrabooks are considered more stylish and cool as compared to other form factors, including tablets, SMBs also value their long battery life, lightweight, built in security features, ability to run Windows 8 and fast boot times.
Techaisle Survey showed that Dell had even a better preferred status for the upper mid-market SMBs, that is, from 250-999 employee size businesses which are less price-sensitive than their smaller counterparts. Additionally, 47 percent of SMBs plan to purchase directly from a manufacturers’ website, which gives Dell an added advantage, given its history of success in selling through the web.
The introduction of Ultrabooks by Dell could not have come at a better time. With increasing mobility among SMB employees, UltraBooks fill in the gap between the lighter (but also somewhat limited in their functionality) tablets and the traditional heavier laptops. Ultrabooks can perform all the tasks (and more) of the traditional laptops but with much greater convenience.
Anurag Agrawal
Techaisle
