Intuit vs. Web 2.0: Entry-level QuickBooks software is now free

Intuit is making the 2008 version of its entry-level small-business accounting product, QuickBooks Simple Start Edition, free. Previous full versions of the program sold for $99.95, and "more than 300,000 businesses" use the product. So why give it away?

Intuit's pitch is that it wants to encourage entrepreneurs to take the plunge and launch their dream businesses, and removing the $100 barrier to basic accounting software is its way of proving it. Alongside the launch of the 2008 version, there's a new "Just Start" marketing campaign and contest, in which one person can win $50,000 in cash and services to start a business.

Whether or not Simple Start is good software (I haven't used it and have no opinion), Intuit's move to make it free is defensive. Microsoft offers a competing stripped-down small-business accounting product, and there are new small business-focused Web 2.0 services coming online all the time. Most of the free and low-cost business apps are fairly basic, and that's all mom-and-pop startups need. What the accounting vendors really want is the more grown-up small business customers that are willing to pay for robust accounting solutions.

Hence Intuit's entry-level software that is free today, but that works as an easy gateway to paid services like Payroll ($99 a year and up) and to its more powerful QuickBooks software and online products. It's a straightforward get-them-while-they're-young strategy. Or rather, get them while the Web 2.0 is still young.

[John N Roberts]

Competition.

This is another situation where a corporation cannot stand competition from a start up. It reminds me of Microsoft vs OpenOffice.

[daftkey]

Maybe some backup..?

"Can't stand competition?"

Since when does a company sitting in the dominant market position, and has been facing real competition from established companies (Sage, Microsoft, MYOB) for years suddenly become afraid of competition from a startup with potentially no real business plan or experience? I think Microsoft vs OpenOffice, if anything, proves that just because something is free doesn't necessarily make it a huge threat.

I think where we will see a lot of Web 2.0 and Free/Open Source projects fail is people making just the same mistake you are - assuming that a company "can't stand competition" when in fact, they are in the best position to take on that competition and can easily adapt (as Intuit is doing right now).

[primeguy]

Not so fast. . .

It should be noted that Simple Start is NOT a web-based application. It's a download for a single machine. Users will not get the benefit of "anytime, anywhere" access.

[Jay Parkhill]

Intuit plugs users into online advertising

Intuit also bought StepUp Commerce this year, and charges QB users to plug offline inventory into search engines- so it isn't just about software being free. There may be a subscription model behind it (don't know if StepUp is part of simple start).

[bjacaruso]

Only the Start?

My guess that Intuit is just early to a game (MS is already there), that will have us see many of the entry level accounting application vendors show up for free. We discussed this today at a product meeting at Pervasive DataSolutions (QuickBooks Integration) and feel this momentum will only continue. Small startups cannot afford to not try this. The pay off for Intuit is obvious, once I start using their software I am not likely to change soon. For a company with some deep pockets it makes sense.

[cardfan1213]

Quickbooks is smart and will remain dominant

They are the dominate small business accounting solution and have focused on the small accounting firms. It's those firms that will dictate to most small businesses what they prefer.

Trust me, if you work as an accountant, you don't want your clients using all this other crap. You get their quickbooks file and work on it.

[Schilling34]

PAYROLL SERVICES INCREASE?

HELP! We use QuickBooks 2007 for our payroll. We just received a notice that our Annual Subscription is going up from $99.00 to $239.00 per year?? I didn't realize we HAD an annual
subscription. We use the payroll module to calculate and print paychecks here in the office.

Am I missing something here? Does anyone know anything about this?