Paychex Mobile App for iPad - Analyst Blog

Paychex Inc. ( PAYX ) has introduced a software-as-a-service (SaaS) application that is tailor-made for Apple Inc. 's ( AAPL ) iPad. We believe that the launch of this product will give the ace payroll, human resource, and benefits outsourcing solutions provider support to fight its rivals, Automated Data Processing Inc. ( ADP ) and Intuit Inc. ( INTU ), whose SaaS-based mobile solutions have already gained share in the market.

The newest member of the SaaS-suite, Paychex Online Mobile application is a free, highly secure and easy-to-use app. The app will navigate the user to an advanced landing page and open up a message center. The landing page will display information regarding the full range of products and services offered by Paychex. Moreover, the app will allow users to access and make changes to their 401(k) and flexible spending account ( FSA ) information from an iPad.

The app is expected to gain traction as it will offer greater flexibility than desktop PCs. Another important thing is that the user registered with Online Payroll Services need not opt for additional user name or password for logging into the iPad app. Moreover, the app features a "Report Favorite" section, where users can save and browse their frequently used products.

The acquisition of SaaS payroll solution provider SurePayroll Inc. was a game changer for Paychex. The acquisition helped Paychex to offer SaaS-based solutions, which should facilitate users in processing their payroll through either a web-browser or iPhone applications. Paychex was lagging in this section as both of its rivals were gaining ground through strategic SaaS acquisitions. Both Automated Data Processing and Intuit kick started their SaaS strategy with major acquisitions in 2009. Intuit acquired and PayCycle, while Automated Data Processing acquired HRinterax.

Company officials have high expectations from this launch. But we think that grabbing market share from its rivals will not be easy, as each company has years of exposure in the SaaS marketplace.

Moreover, we remain somewhat concerned about high unemployment and inflation rates within the small and medium business ( SMB ) group. Paychex is highly dependent on the performance of the SMB sector and this is the reason the company may not see much revenue growth in the near term. Limited margin expansion due to continued investments in diverse fields also keeps us concerned.

Paychex has a Zacks # 4 Rank, implying a short-term Sell recommendation.

APPLE INC ( AAPL ): Free Stock Analysis Report

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INTUIT INC ( INTU ): Free Stock Analysis Report

PAYCHEX INC (PAYX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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