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INTUIT PUTS REV REC IN THE CLOUDS Featured

Brad Smith, IntuitIntuit is transitioning its company by incorporating the move to the cloud into its accounting. The company is now recognizing desktop revenue over time, instead of recognizing license revenue at the time of sale, CEO Brad Smith said during this week’s earnings webcast for the year ended July 31. “This will push about $400 million from 2015 to future revenue,” he noted. One of the larger areas affected will be the desktop professional tax products, Lacerte and ProSeries, whose revenue will now be recognized more like subscription products.

Meanwhile, the company is also gearing up for a major push to convert desktop QuickBooks customers to QuickBooks Online. For the first time, there were more QBO customers than desktop customers signing on during the most recently ended quarter. The number of QBO subscribers hit 683,000, up from 624,000 on April 30. And it was up 40 percent from the 487,000 at the end for fiscal 2013. Smith said there will be initiatives to entice users and accountants to move to QBO.  Part of that will come in a restructuring of how QuickBooks is released to the market. Intuit will launch what Smith called experience releases. Those, he clarified, will not include new features but will concentrate on making the product easier to use, but will also have connections to online products. “Our goal is to make them comfortable with the cloud and help them [users] move to the future,” Smith said. He also noted that “all of the new features” would be provided in the cloud. Intuit has a clear incentive for moving customers. Smith said a QBO subscription provides about $800 in annual recurring revenue while the desktop amount is “a little bit under $500.”

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