The Real Reason Microsoft Retired Money

• Microsoft
• Software
• WWW
• June 11, 2009

It’s sheer silliness to argue that Microsoft retired Money because of Intuit competition. The real cause is already giving Intuit’s Quicken trouble, too.

Ina Fried contends: “The defeat of Microsoft Money at the hands of Intuit’s Quicken marks a rare chapter in the annals of software history. Intuit is one of the few companies to take Microsoft head-on on its home turf—packaged software—and come out on top.”

Ina tells an interesting story that has little to do with reality. Sure, Intuit and Microsoft competed for years, and, yes, Intuit fought back a hostile Microsoft takeover. But Ina tells the kind of fairytale that journalists just love. It’s based on a seemingly sound hypothesis that leads to conflict. Journalists live to write conflict stories. Microsoft is easy target for conjecture and innuendo.

But Microsoft had good reasons to retire Money that have little, if nothing, to do with Quicken or even QuickBooks. Money is a dinosaur. It’s a fossil of a different era in computing, when people primarily used desktop software to manage their finances. But most banks offer similar personal finance management and bill payment services via the Web.

Many banks even offer applications for cell phones. Last month, I was out with an accountant friend, who got an urgent phone call from his client. My friend launched the Bank of America application on his iPhone and transferred money between accounts. No PC or desktop software required.

Microsoft has seen the future of personal finance, and it’s not Money. Nor is it Quicken. Intuit faces the same banking competition pressure as Microsoft—actually more so, since financial software and services are Intuit’s only lines of business. Money was a pittance in Microsoft’s global software empire.

Quicken Online

Over the years, Intuit has expanded into offering more financial services that either augment or even replace Quicken and QuickBooks features. For example, in December, Intuit launched free Quicken Online. Intuit has an iPhone app, offers the mobile phone GoPayment service and other services.

Microsoft only dabbled in financial services and for a simply good reason: The company didn’t want to compete with banks and other financial services running Microsoft software. Money doesn’t generate the real money. Microsoft was right not to compete with customers buying products like Office and Windows.

Intuit and Microsoft still compete for small business accounting software and online hosting services. But on the desktop, Microsoft has rightly stepped back from consumer financial software. It’s inevitable that Intuit will eventually make a similar move. Desktop Quicken is a relic, too. In the 1990s, Intuit and Money filled a market niche left wide open by banks, many of which either didn’t offer software or that didn’t meet consumers needs. But, now, most banks offer excellent consumer cloud-based money management and bill payment options—and desktop-bound apps are going mobile.

Money’s end foreshadows that of Desktop Quicken. At least Intuit has cloud strategies where to migrate Quicken.

Do you have a software story that you’d like told? Please email Joe Wilcox: oddlytogether at gmail dot com.

finance financial software Intuit Microsoft Money Quicken