By Art Gillis
Intuit and Microsoft have always had a taste for banking, but somehow they were missing the nuance and culture that are so important in banking. Bill Gates called bankers dinosaurs, not the ideal way to break into a club. Intuit knew how to keep the books, but it didn't know a deposit from a loan. Now Intuit solved its problem by acquiring a banking company, one that does banking the future way, electronically, not the old way, "paperbound." What struck me was the enormous initiation fee to get in. While the current price paid for a bank tech company has averaged 2.13 times revenue, Intuit paid Digital Insight shareholders a whopping 6.3 times revenue. Maybe Intuit knows something the rest of us don't. And I certainly missed the predication in last week's blog. I talked about the generics and came close with Microsoft, but I missed Intuit entirely. Automation in Banking - 2006 lists 19 Electronic Bill Presentment & Payment solutions. Maybe Microsoft will shoot high and go after CheckFree.
Blogger's note: Automation in Banking - 2006 includes 81 bank tech companies (250 solutions). But Microsoft and Intuit are not included despite repeated invitations to appear. I always felt there was a connection between bookkeeping software and banking systems, and I'm happy that Intuit confirmed I got at least one thing right.