The story started outside Microsoft, with a startup named Intuit releasing their first DOS-based PFM software, Quicken. The concept was simple and powerful: balance your checkbook, keep track of your financial transactions electronically. It worked; in fact surveys showed that Quicken became the driver for many consumers to buy their first personal computers in the late 80’s. But it really became popular when Windows, especially the first “good” version, 3.0 arrived.
Intuit remained a one-product company until after their IPO in 1993, when they acquired Chipsoft and entered the tax-software market. People maintained their data (still manually) in Quicken, then dumped it all into Turbotax to file their tax returns. Then came the nascent online services, which reduced manual data entry: if you found the right bank, you could get your data downloaded directly into Quicken. With online services came the concept of online community, and the bundle of all this soon became attractive enough for Microsoft to attempt to acquire Intuit, for $1.5B which was a huge amount in 1994-95. When the DOJ intervened, MS changed tactics: “If you can’t own it, kill it” became the new mantra.
And the years of head-on competition between MS Money and Intuit Quicken began. The ritual largely consisted of annual upgrades, and being consumer products, the mandatory comparative reviews. First Microsoft Money was clearly the underdog, but around 2002 a funny thing happened: the reviews started to tilt towards Money. Now deep in the Internet era, MS Money came with a browser-like UI, smoothly connecting online services into the basics ran on the local PC. In fact switching between screens I could often not realize whether I was working offline or online – I actually think this was the precursor to Microsoft’s Software plus Services concept. At its heyday Money effectively took over all one’s financial management tasks: it was no longer a system of record, but the primary interface to pay bills from, transfer between accounts, etc – especially when paired with the few excellent banks specializing on Online Finance. Like my favorite NetBank – until it became NotBank.
But despite all the relative succes, Money never became “The Brand” in personal finance: the title clearly remained with Intuit’s Quicken. Realizing they could not kill Intuit, Microsoft must have lost interest – the annual Money upgrades brought less and less new features or even bug fixes, and smart users started to skip releases between upgrades. Don’t take it from me: read a former Money developer’s reflection on what went wrong.
Then things started to really fall apart: weird things happened to user accounts beyond the users’ control. Categorization? Forget it, it may have worked in the late 90’s, but by now most of my downloaded data was associated with junk categories. I simply gave up on this feature. Who needs to know where your money goes anyway? But when Payee information started to get messed up, that hurt really bad. First Money jus did not get the right Payee information, then it started to make weird assumptions and assign everything to a handful payees – total chaos. Auto-download from the banks stopped working, sessions had to be manually started… the list could go on forever.
The worst part of this mess was the absolute lack of service. You see, I really don’t know to what extent it was the responsibility of Microsoft, the banks or third parties like Yodlee..etc. It’s really not my business to know! But there was no integrated support system, only fingerpointing, and one could not even get all the involved parties on the phone at the same time. Regular followers of the user-driven Money Support Group quickly learned that was just business as usual – we all accepted the continual decay year by year – for increasing fees we receieved less and less. S+S? What a joke: the software part was there, the service wasn’t.
Then there was the occasional drama: just about all upgrades brought the risk of being locked out of your money (I don’t mean just Money, but your own money, as in $, since this is where all payments actively took place) –for hours or days if you were less lucky. I’ve documented one such fiasco here, but don’t take my word for it: here’s what a Microsoft employee had to say on the same disaster:
This past weekend I got the most horrible and scary warning from Money. Just reading the instructions on how to keep using Money with Online Banking is enough to make this computer professional run screaming from my office. The instructions are 24 freaking pages!!! longer than the manual for the product. I seriously almost went to the “Add / Remove Programs” Control Panel to fix the problem.)
High drama aside, the worst part came through daily use of the system: data changed in existing accounts, very old transactions downloaded again into already reconciled months..etc. This is my bank account, my money we’re talking about! The very data I meticulously took care of while in my possession now got randomly changed. The only way to be really sure I had the right balances was to go and verify them at the individual bank or broker sites – but then what was Money for?
So here’s the evolution of Personal Finance management software:
- We transacted elsewhere, wrote paper checks, spent cash, used credit cards and manually entered all transactions into Quicken and Money, as the system of record. We worked the feed the beast.
- More of our transactions became electronic (credit card spending, online bank payments..etc) and both Quicken and Money got better in grabbing such data automatically, offering true convenience. The system started to work for us.
- No longer just an after-the-fact system of record, with cooperating banks Money and Quicken became the primary UI to conduct one’s finances. It was no longer just a system of record, but active financial management with payment and transfer capabilities.
- The new online features started to become less reliable, but at the same time banks and brokerages woke up and gave us more capabilities online on their own home sites, so Money slowly went from active management to being a ledger again – but at least automated, we did not have to feed the beast.
- The continued decay and unreliable data brought us back to where either we spend hours fixing the messed up downloads and trying to reconcile data in Money, or we simply no longer even have a reliable system of record. If I have to double-check my numbers at the bank’s site, or on paper (noooo!) , why have Money at all?
All this prompted my to start a parallel test on Web-based PFM provider Mint a few weeks ago. So far so good – Mint does not have all the “power” that Money had, but it does not come with the major scr***ups either, and it’s easy to use. No, it’s actually fun to use. It appears that the fellow-Money-user and Microsoft employee I quoted above, Omar Shahine was ahead of me:
I’ve been using Mint.com for over a year now. Earlier this year I switched “full time” as it sort of crept up on me. They finally have all the features I required in a personal finance package:
- Investment accounts (401K etc)
- SMS and Email alerts of transactions / balances
- Auto-Updating balances
- Amazing self correction of merchant names
- Cash Flow tools
- Accounts are always reconciled
- Zero Configuration Installation (no DRM).
- Mortgage and Loan accounts
I seriously love Mint. Now if they could just make an iPhone app!
That was a year ago – since then he got his wish, Mint does have an iPhone app. And that is an undeniable benefit of the SaaS model: continuous improvement, far outpacing the annual upgrade model, without the hassle and data-loss that often comes with those upgrades.
The now half-dead Money will continue to be “supported” and “function” online until January 2011 – if you trust the quality and can believe you are getting correct data. But why wait till the funeral?
Microsoft and Intuit has announced they are working together to create an easy migration path, so if bringing over history is critical, perhaps Quicken is the right option for you. I hope the conversion will be possible to Quicken Online, too, but there’s no word about it for now. Or you may just decide to test the pure-play SaaS providers like Mint and Wesabe.
Update: Joe Wilcox has it right:
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
Update #2: Companies Don’t Get Killed by Competition, They Commit Suicide The title sends a very similar message to my point above, but the article itself is about a lot more, sort of the Ars Poetica of a business Founder / CEO who not only survived several downturns but managed to thrive…