ASX listed accounting software company Reckon has severed ties with US-based Quickbooks supplier Intuit, following a falling out over strategic direction and hosting priorities.
Reckon and Intuit secured an alliance in 2010 for the marketing and distribution of Intuit’s range of desktop products which included a termination caveat in the case that either party’s online strategies were steering off course.
In a statement to the ASX on Friday, Reckon said that as a “consequence of the gradual divergence since then of our respective online ambitions, Reckon Limited advises that we have entered a notice period, at the end of which, on 10 February 2014, the licensing agreement will be formally terminated.”
The Australian software developer added that further online products are in development and will be rolled out over the coming months including its own Cashbooks product, a software-as-a-service (SaaS) product hosted in a private cloud. Reckon’s strategy remained to provide “fully localised products specifically for our markets, hosted locally,” for accountants, bookkeepers, and their business clients.
"The business dynamics have changed over the last few years, with a very focussed cloud based strategy now required. As a business, Reckon needs to be ever more flexible with our product offering and the territories within which we operate,” Reckon chief executive Clive Rabie said in a statement.
He added to local press that a significant part of the concern over the continuation of the alliance was that users’ data would be hosted offshore and in particular Asia and Europe or the US and subject to the law of those jurisdictions.
“If you go onto the Azure platform then your data is stored in Europe, or America, and we’re not comfortable with that. We’re not even comfortable having it in New Zealand, we want users’ data here,” Rabie told SmartCompany.
After February 2014, Reckon will effectively enjoy royalty free rights to continue selling, and may independently develop, the then current Intuit desktop technology and QuickBooks Hosted technology for a 100 year period. The company estimates that this will result in an annualised royalty saving of about AUD $6million .