Sunday, July 24, 2011

What killed Intuit's Quicken?

Quicken is dead.

Yes, you can still buy something called "Quicken" for Windows -- though not in the UK where the produce was terminated four years ago. No matter, Quicken is dead. The failure to produce a reasonable product for OS X is just another nail in the coffin.

Intuit itself may well continue. Their share price has done well over the past two years, and the company has moved well beyond their original product line. They may even be earning money (one way or another) from Intuit's, a read-only Cloud product with a few *cough* privacy and security issues

It's not just Quicken. Back in the 80s and 90s personal financial software was a hot product niche. At one point Microsoft Money was a serious player, until antitrust concerns and a failed acquisition left it mortally wounded.

So what happened to personal financial software? Why did it become a niche market for vendors like iBank for OS X?

I suspect it was more than one thing. This would be my guess ...

  1. The banks stopped cooperating. I've worked for ventures that relied on transaction and interface agreements; it can be hard to keep both parties motivated and the transaction system healthy. Perhaps at some point in the 90s the banks wanted this business for themselves, and saw internet banking as a competitive advantage. Why cooperate with a vendor that put all banks on a more-or-less even footing?
  2. The ability to visit web sites and find current investment values was sufficient for a significant fraction of Intuit's customer base.
  3. The American middle class fragmented as wealth concentrated in less than 1% of the US population.

The last of these is, of course, the most interesting.

Quicken is not an interesting product for people with millions of dollars to manage. They will largely use professional money managers. Quicken is not an interesting product for people with very limited savings and investments, particularly if the investments are largely concentrated in 401K accounts. The natural market for Quicken was individuals and families with significant financial complexity but not wealth.

Over the past fifteen years that market went away. The saving grace for niche Mac vendors is that, insofar as some remnant of that market still lives, it's now largely using Apple products.

In the end, I think the collapse of the American middle class killed Quicken.

See also:


Mackenzie said...

Add to that "online banking interfaces got better." I use PNC Bank, and the online banking interface is a rich web-app that shows me charts over time of my spending in various categories, allows me to set budgets for each category, and emails me when I'm at 75% of a category's budget (if that comes before the 21st, I need to slow down). It has a calendar showing when all my auto-debit bills are going out and reminders of when bills are due. It shows red warning triangles if I'm going to be low on money based on those things compared to pay days. With all that, why on Earth would I need a desktop application that I can only access on one computer???

JGF said...

Mackenzie -- how many stock and mutual funds do you track?

Anonymous said...

How about the near universality of spreadsheets as a contributing factor? I know that most financial planning I have done in my life I have turned to a spreadsheet and not even thought of dedicated finance software. I planned the financial aspects of my wedding and keep track of the progress of my car loan via my spreadsheet. :)

Of course this would break down if my financial life were a lot more complicated. But that seems like it might have taken a chunk out of the bottom of Quicken's market share.

JGF said...

Hard to imagine but we had spreadsheets even before quicken. I can't remember what the one before Lotus 123 was called. In those days there were a half-dozen on the market.

That fits my hypothesis though. Most people can make do with a spreadsheet or a bank web site. They just don't have enough money.

People with money have so much they need professional money managers.

What's gone away is the chunk of society that wasn't rich enough to interest a professional money manager but had finances too complex for a spreadsheet or a bank site.

Mel said...

Umm, just because the wealthy have more money doesn't mean the middle class has less. The percentage of homes with computers is not declining, so the market for personal finance software is not shrinking. I can't agree with the idea that the user base of the software has shrunk so much that there's no market. Why are there 5 or 6 competitors to replace Quicken on the Mac? Must be a market there somewhere.

JGF said...


Over the past twenty years, even as average income has risen, the earnings of the middle class have stagnated or fallen (excluding health care coverage compensation).

It is only at the high end of the income distribution that income has risen, and there it has risen enormously. That small niche group doesn't use quicken.

Anonymous said...

JGF: Visicalc. It was arguably the killer app that *made* the Apple II and moved microcomputers from curiosity to actual business tool.

IMHO, two main things have killed this kind of software. First, there was a big novelty factor when it became mass-market software, tied to the novelty of computers. People who didn't have computers were getting them-- the late 90s and early 2000s when PCs were a growth market-- and financial software was one of the things they had to get.

Second, it was the kind of stuff middle-middle-class people got when they had dreams of wealth and wanted to track the upward climb. The collapse of 2008 took the fun and interest out of it, no pun intended.

Color me skeptical: for most of the people who bought this kind of software, I don't think it ever really had much usability value. It was more about curiosity and aspiration. Budgeting is easy enough to do with simpler, less expensive tools, but they won't give you an instantaneous read on skyrocketing net worth.

JGF said...

Good comments, except for us the fun went away in 1999, not 2008. It doesn't feel like our world ever recovered from the dotCom crash.

Quicken was so much fun when savings used to rise nicely every year or so.