Intuit, which derives almost all of its revenue from the U.S., Canada, and the U.K., is attempting to tap new markets. The California financial software company is evaluating new markets in India, China, Russia, and Brazil, said Nilesh Thakker, Intuit's director of product development, and country manager for India, on Tuesday.
There are 26 million small businesses in the U.S., in contrast with 350 million outside the U.S., Thakker said. "So there is a huge opportunity outside the U.S. for us."
The company is starting development of a prototype of a point-of-sale software for the Indian market, with Indian versions of other Intuit products in the pipeline. The development of prototypes will not necessarily lead to launches of the products in India, Thakker said. "We are still at an early stage, and whether we will launch a product will depend on customers' feedback on the prototypes."
The company is also considering offering hosted versions of its products in India, and its online banking services for banks, Thakker said. Intuit acquired Digital Insight, a provider of online banking services to banks, in February this year.
Succeeding in markets outside the U.S., where the company makes over 95 percent of its revenue, requires more than localizing the product to reflect local currency, language, and accounting rules, according to Thakker. The work flow patterns at a point-of-sale in a retail store in India, for example, are very different from that in the U.S., he said.
Intuit's attempts in the 1990s to get into new markets such as Japan were not successful because the products launched in those markets did not take into account various market peculiarities, including the work flow, Thakker said. The Japanese, for example, are at ease with electronic funds transfer, unlike users in the U.S. who prefer to pay by checks, he added. Intuit sold off its wholly-owned Japanese subsidiary, Intuit KK, in 2003.
The company is keeping its options open on gaining access to the new markets it is targeting. It may acquire a local accounting software company with a strong local presence and brand, or it may work through distributors with a sound knowledge of the local market, Thakker said. "The strategy will differ from market to market," he added.
Having a product development center in Bangalore, India, will help the company develop products for the local market. The company has about 85 of its own staff, and 150 staff with outsourcer Cognizant Technology Solutions Corp., doing product development in India. It plans to increase staff in India to about 700 over the next two to three years, including 350 of its own staff.
If it gets serious about developing products for other markets like Russia and China, the company may consider setting up development centers in these countries, because knowledge of local business practices is critical to success, Thakker said.
Within the U.S. itself, Intuit is expanding by its announcement in June that its QuickBooks Enterprise Solutions would run on servers running the Linux operating system. The company's mid-market customers run their IT infrastructure on Linux servers, Thakker said. But the company isn't planning to offer as yet Linux versions of its other software, as most of its customers still use computers running Windows or the Mac operating system. Even for QuickBooks Enterprise, the client computers will still run Windows or Mac, he said.