App ecosystems are already old hat. Plugins are the future

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This article appeared in the December 2016 issue of CRN magazine.

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App ecosystems are already old hat. Plugins are the future

COMMENT  |  App ecosystems are all the rage these days. Why buy a cloud app if it can’t connect to anything else? There’s no point recreating a desktop silo in the cloud.

And yet, testimony to the speed of progress, your 500-app ecosystem is already looking old hat. One of the most important announcements at QuickBooks Connect, the global conference held by Intuit in San Jose each year, was the launch of QuickBooks’ plugin framework. 

The plugin framework means that apps in the QuickBooks ecosystem will be natively integrated into QuickBooks with the same user interface, colour scheme and login as the accounting software. In short, it’s a steroidal increase in functionality without the multiple UIs, logins and user experiences of using an ecosystem of different apps. 

QuickBooks’ head of developers, Vinay Pai, got the nod to create APIs (application programming interfaces) for every part of the small business accounting software. 

“So right now everything is open to third-party apps. To embed their UI, add buttons on a different page and embed in the navigation of QuickBooks Online,” Pai told me in San Jose.

“My aim is to expand this over the next 12 months. And then you’re going to see us bring in more partners to the point where we have dozens and then hundreds of apps embedded natively.”

CEO Brad Smith revealed this shift to a platform as a defining moment for QuickBooks, one that wasn’t lightly taken. 

“[Smith’s] boldest decision, hotly debated internally, was opening the platform to all apps, including those that compete with Intuit’s own offerings, for example in handling small-business payrolls,” wrote Fortune magazine in its feature on businessperson of the year (Smith came sixth after Microsoft’s Satya Nadella).  

The best example, indeed the pioneer of this architecture, was a small payroll SaaS company in Australia called KeyPay. 

When Intuit brought QuickBooks Online to Australia several years ago it was unable to make a dent in the market because it had no payroll. Rival Xero had not long before acquired payroll software company PayCycle and, once it had integrated it into the accounting software, seen sales take off. 

KeyPay wooed Intuit over several months and managed the improbable technical feat of embedding externally owned payroll software into Intuit’s flagship program. Every business in Australia that signs up to QuickBooks Online automatically becomes a customer of KeyPay, with Intuit providing a no-cost payroll solution of up to 10 employees. 

In the meantime, KeyPay continues to sell itself directly to SMEs and integrates with competing accounting software, Xero, Saasu, NetSuite and JCurve.

“Everyone wins when you have relationships like this,” says Richard McLean, one of the founders of KeyPay. The platform provider now has specialised features for vertical markets, the external software developers have vetted access to a marketplace, and the user has a consistent workflow across both apps. 

At its US conference, Intuit announced it had approved a second app to integrate natively: scheduling app TSheets.  

Expense management and accounts payable app is also in the works. One would expect Fathom and Receipt Bank, which with TSheets and comprise Intuit’s four top apps, to follow suit.

It’s still very early in this project but its ambition is impressive. Many compare the model to, which offers native integration for third-party apps built on its developer platform

Intuit is no doubt hoping for a similar effect: a platform that adds features without the need for Intuit to expend resources. 

ERPs will always have the engineering advantage of a single database. It will always be simpler to have one source of truth and less likelihood of error due to integration bugs.

However, ERPs have fallen behind in key areas such as the automation of bank reconciliation, off-the-shelf mobile apps and connectivity to financial services such as lending.

QuickBooks Online will also be able to offer greater personalisation and specialisation to small businesses, and for a lower cost. A single UI removes the switching costs in time and attention when dealing with multiple interfaces. Add to that the reduced time spent training. If Intuit can reverse engineer a plugin framework it could have found a real advantage.

Sholto Macpherson travelled to San Jose as a guest of Intuit. Intuit paid for his flights and accommodation.

Sholto Macpherson is a journalist and commentator who covers emerging technology in cloud.

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