Intuit grabs PayCycle

Updated: June 10, 2009

And it's all about strategy, Intuit says. The acquisition supports Intuit's strategic goals by underscoring the company's connected services strategy, which is designed to give customers online access to its products and services. This is key, because Intuit derives more than half its total revenue from connected services offerings. Expanding the online capability of its payroll offering advances Intuit's move into the "software as a service" markets for small business, which in turn is expected to accelerate the growth rate of its overall payroll business. PayCycle's partnerships with financial institutions are also expected to extend Intuit's ability to offer integrated payroll solutions to an even larger set of partners and deliver a simple payroll solution to a greater number of small businesses.

What does the deal mean for small businesses? Hundreds of thousands of accountants will be rejoicing now that they have the ability to "easily and profitably" offer services as stand-alone payroll providers for their small business customers.

Intuit now plans to offer small businesses a range of low-cost, high-value alternatives to expensive payroll outsourcers and time-consuming, error-prone manual payroll methods. It should also help them develop and deploy next-gen online payroll tools much faster.

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