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Intuit Gains Expanded CRM Presence with $420 Million Demandforce Purchase

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Posted April 30, 2012 By Pedro Hernandez     Feedback

Intuit parts with big bucks for a shot at the hot cloud and social CRM markets.

Intuit is snapping up San Francisco-based Demandforce, a software-as-a-service (SaaS) CRM provider, for $423.5 million in an all-cash deal.

Specializing in marketing and customer communications for SMBs, Demandforce will become a new division within Intuit's Small Business Group and will continue to be headed by the firm's president and founder, Rick Berry. The companies expect the deal to close in May 2012 pending regulatory and conditional clearances.

"Demandforce sits at the sweet spot of Intuit's SMB customer base," said Kiran Patel, executive vice president and general manager of Intuit's Small Business Group, in a statement. "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."

Demandforce provides email marketing, social media engagement and online reputation management, among other services. Its mobile product provides anytime, anywhere access via devices like the iPhone.

With Demandforce, Inuit stands to inherit -- and cross-sell to -- a sizable customer base. Demandforce's platform serves 5,000 small business users in the United States and Canada, according to the company.

His company’s technology aside, Berry spells out what made his company such an attractive acquisition target in a company blog post. "Today we connect more than 35,000 business users to more than 30 million consumers across 15 distinct industry segments, generating over $1 billion dollars in incremental revenue to our customers – and we’re just getting started," he wrote. 

Moreover, Demandforce opens new opportunities, particularly in the booming cloud services and social CRM markets.

Social and Mobile CRM

Mobility and social media hooks are more than hot new trends in CRM. They are emerging as must-haves in today's business climate.

A recent Nucleus Research report found that social and mobile features improved the productivity of sales people by 26.4 percent. Gartner identified the integration of social into customer relationship management as a top challenge in 2012. It helps explain why CRM is now one of this year’s top IT priorities for CIOs, according to the research firm.

Intuit is no stranger to the cloud, or to CRM for that matter. Last year it partnered with Salesforce.com for Quickbooks and Quickbooks Online integration. Today's deal -- the biggest under CEO Brad Smith's leadership -- signals that Intuit intends not only to blaze its own trail, but that the software maker is bringing its business strategy into alignment with an increasingly social and mobile marketplace.

Pedro Hernandez is a contributing editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @ecoINSITE.

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