Via an e-mail sent to TSheets professionals and customers and a blog article by their CEO and Co-Founder, Matt Rissell, TSheets confirmed they have agreed to be acquired by Intuit. In a corresponding press release by Intuit, the deal is valued at $340 million and will close the end of Intuit’s fiscal Q2 2018. TSheets indicates that, at least initially, they will be allowed to continue to operate as they always have in nearly every way.
TSheets and Intuit, via QuickBooks Online, are two very big players in the cloud accounting software space. In terms of size, Intuit is of course the indisputable king of that space, but TSheets has done an impressive job gaining relevance with an exceptionally effective and feature-rich time tracking system. In some ways, this announcement comes as no surprise to me after TSheets has successfully integrated its service a lot deeper into the QuickBooks Online ecosystem than we typically see. However, TSheets also integrates with many other services that directly compete with Intuit’s service offerings. As such, many questions come up in my mind about what this change really means for the cloud accounting space and both companies involved.
This acquisition in some ways appears to represent a shift of Intuit’s strategy in relation to its QuickBooks Online ecosystem. Up to this point, Intuit has shown significant restraint in not expanding the functionality and capabilities of its QuickBooks Online services in favor of encouraging app integrations, such as TSheets. By now agreeing to acquire TSheets, Intuit indicates their intent is to use TSheets to seek to provide QuickBooks users a “single, seamless solution to track their time, streamline their invoicing and simplify paying their workers with complete confidence.”
I wondered recently whether Intuit might eventually phase out their payroll services given that I haven’t seen many significant improvements made to its functionality or features for quite a while now, and at present I far prefer Gusto’s payroll service offering (we use Gusto and TSheets with our Virtual Payroll and HR Service plans). However, with this announcement, I’m now inclined to believe the opposite. This move signals that Intuit is now looking to aggressively expand the native capabilities of its QuickBooks Online system, beginning with time tracking.
As such, my first big question is: how deeply does Intuit really plan to integrate TSheets’ technology into their QuickBooks Online system and their payroll services? Time tracking functionality is so integral to payroll, OBHR, and project management that I am now very curious to see whether Intuit continues their investment beyond TSheets and into these other areas. Will Intuit seek to reinvent and expand their service offerings to match Gusto’s ambitions? Might they even seek to acquire Gusto as they did TSheets? Will Intuit explore similar avenues in the space of project management or other spaces, such as CRM or inventory management? Needless to say, this announcement could mean many things.
The biggest question involves how the TSheets services itself will integrate with over services over time. Up to this point, TSheets has been very aggressive with integrating their service with other cloud technologies, including many of Intuit’s competitors. In the accounting system space, TSheets integrates with Xero and Sage 50, for example. In the payroll space, TSheets integrates with ADP RUN, Gusto and Wagepoint, among others. Integration partners will likely be concerned that, with this acquisition, Intuit will eventually no longer support their integrations. Alternatively, Intuit may allow the integrations to become irrelevant over time. For example, if TSheets is eventually repackaged as a time tracking system that natively extends QuickBooks Online’s functionality, will it ultimately become indistinguishable from QuickBooks itself?
Rissell states in his e-mail that TSheets will continue to work with third party integrations and add more after the acquisition closes, but my candid opinion on the matter is that, when it comes to mergers and acquisitions, promises like these are easy to make, but almost always prove very hard to keep. The goals and priorities of TSheets will invariably become subordinate to the goals and priorities of Intuit, and supporting integrations to Intuit’s competing providers isn’t ever going to be Intuit’s top priority.
Organization and Identity Changes
Matt Rissell assures the TSheets community in his blog post that he is “not going anywhere”, and this fact is confirmed by the Intuit press release. The release indicates that TSheets will be absorbed into Intuit’s Small Business and Self-Employed Group as a new offering called “Time Capture”, led by Matt Rissell, who in turn will report Alex Chriss, the Senior VP, chief product and platform officer for Intuit’s Small Business and Self-Employed Group. TSheets headquarters in Eagle, Idaho will become a new Intuit location.
Matt Rissell claims in his blog article that Intuit and TSheets are two very similar companies, and attempts to assure that TSheets is going to continue to do what it does best. However, in terms of company identity and direction, that does not necessarily appear to be the case. There is an inevitability of change consequent to acquisitions — some changes are good, and some are bad. Retaining Rissell, to me, is a smart move that will help retain continuity of the positive momentum that TSheets has been able to achieve as a company. However, Intuit’s expressed plans to deeply integrate TSheets into its existing organizational structure demonstrates an intent for TSheets that also gives me cause for the concerns expressed above. All said, only time will tell how this all plays out.