Tuesday, June 23, 2009

Federated Applications

Intuit recently launched a new ambitious program to deliver Federated Applications on their platform. These applications will be available to Intuit customers via a "marketplace" (my term not Intuit's). Intuit has a number of SDKs to use their Cloud platform (Flex seems to be a strategic platform for them) but Federated Applications will not be constrained to a specific technology because they will be able to use a REST API. From the distance this program looks similar to Salesforce's successful AppExchange--approaching 1,000 published applications rapidly--but after a closer look it is important to highlight two intriguing differences:

1) Intuit takes care of the billing. It collects the monthly fees, pays the application developer and keeps a %. To many developers this is a nice service, they just know that every month money will be deposited in their bank accounts and they don't have to worry about paying Intuit. Intuit gets paid right away.

2) Federated applications have the ability to read data from Intuit applications but ALSO from any other Federated application in use by the current user. To make this happen Intuit requires that all applications meet certain integration requirements. While this is an extra step for most application developers the amount of work does not appear to be excessive (i.e. weeks not months). These requirements help to deliver a more consistent user experience and they make it easier for customers to try new applications. Another interesting consequence is the potential Network effect among applications. Federated applications are expected to publish their data objects to an open and shared environment. This means that application A can read/write data from Intuit applications but also from federated application B. This data exchange can increase the value of individual applications significantly (the more connected the more valuable). Of course, each application would need to know what type of objects to expect and what to do with them but given a common framework it should not be too difficult.

Compared to other Cloud providers (e.g. Salesforce) Intuit would seem to be off to a slow start but I find their vision intriguing and ambitious. More importantly if Intuit succeeds in recruiting useful applications this strategy could become very profitable for all involved.

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