Microsoft yanks Money off retail shelves

Updated 2:30 p.m., with comment from Microsoft.

It had become a ritual for Microsoft's consumer unit. Every year it came out with a new version of Microsoft Money and sent new boxes to retail stores.

That tradition is now dead.

Microsoft, via a newsgroup posting from one of its enthusiasts, announced it will no longer update Money each year and, more importantly, it will stop selling the product at retail stores.

It's the latest indication that Microsoft is seeing a shift in the way people, particularly consumers and small businesses, buy their software.

(Credit: Microsoft)

"More and more retail consumers are going online to shop the endless rows of digital shelves," Microsoft said, according to the newsgroup posting, which was noted earlier Friday by ZDNet blogger Mary Jo Foley. "In response to our retail partners' needs, consumer behavior and business efficiencies, Microsoft is focusing distribution efforts for Microsoft Money Plus software online via download and discontinuing traditional box sales of the software at retail."

Money is not the first consumer title to see its fortunes change in recent years. Another perennial shelf space occupant, Microsoft Digital Image Suite, was discontinued altogether last year.

However, Microsoft added in the posting that it is not abandoning packaged software companywide.

"Microsoft does not see shrink wrapped software going away anytime soon and we are always talking to customers about different ways to price and package our software offerings," it said in the posting. "The company is evolving its strategy and product solutions to meet customer demand and optimize business efficiencies."

Indeed, the company has seen very strong sales of the latest version of Office and its OneCare security software is also sold heavily at retail stores. The company just introduced Equipt, which is a subscription service combining the two, but sold as a packaged product at retail.

The company has been eyeing this shift for some time and looking at options like subscriptions, online services, and even advertising-funded software on the PC. After years of weighing the issue, the company went ahead with Microsoft Works SE, an ad-supported free version of its consumer productivity package.

Intuit, another big name in consumer software, has already seen a huge shift to both online sales as well as selling its personal and small business finance programs as online services, rather than packaged software.

The company already gets more money from its TurboTax online service than it does for the packaged product, with more than 10 million people doing their taxes online. The company also has 128,000 small business customers using its online services, according to spokeswoman Heather McLellan.

It has also debuted niche products that are online-only such as a medical account expense manager product.

Update: I spoke this afternoon with Chris Jolley, a product manager in Microsoft's financial products group. He added some details on the trends that prompted Microsoft's move.

In the past 12 months, half of the sales for Money Plus, the latest version of Microsoft Money, have come via digital download. That's roughly three times the rate of a year earlier, he said.

Although the company laid the ground work for less-than-annual updates when it renamed the product a year ago, Jolley said that the decisions to go digital and to skip this year's update were made more recently.

[ss_Whiplash]

Funny. After the nightmare of trying to get Money reinstalled after a system crash, I had planned to abandon their stupid online purchase system and go back to physical media. Now I guess I have no choice.

[technewsjunkie]

"Microsoft does not see shrink wrapped software going away anytime soon"

They also say "680K" is more than anyone will ever need. Reliable insight this company has.
They also almost missed the Internet! (browser)

I hope they stick to this prediction.

[Mr. Dee]

A lot of Microsoft consumer products are becoming more irrelevant these days, the first product I noticed this trend with is Encarta. Usually around July of each year, a new version would be announced, but its not the case. My personal feeling towards that product is, Wikipedia is the future of digital encyclopedias, Microsoft started the effort, now the Internet and Open Source are finishing it. I never understood why Digital Image Suite was discontinued, although I remember early during the Windows Vista betas, Windows Photo Library was toted as its successor, not that I see any features in it that would make it a definite successor, but I guess Microsoft saw tying its future to Windows was a better hope for survival. But, I think this is a right direction for Microsoft Money and I hope Microsoft just face the cost and reality that products like Encarta will need to be web based only and 'free' to compete with existing solutions that are working better because of the web. The eventuality that the web might make Microsoft need to push other establishments like Office to the browser is not far away I believe, but knowing Microsoft, they will fight it to the very end then embrace it, then ultimately dominate it.

[gsekse]

It might take 10 year or so, but Microsoft is losing it's relevence in the market. It may have a 90% share now, but hey, at one time so did IBM. It's a big company that has lost it's ability, (like many big companies) to change with the times and modify their business model as they go along. Instead, for the last 5-10 years, they have tried to FORCE whatever idea they think is useful, down the consumer's throat. Yeah... Yeah... "and Mainframes are going to be the answer forever" sayeth all mighty IBM... (just before the fall)

[wildscribe]

As technewsjunkie has accurately pointed out MS always seems to be several steps behind the curve. Aside from buying a copy of MS Vista Business last year, I personally have not purchased any shrink-wrapped software since 2002. I am using Google docs as my desktop and I have installed Open Office as my office suite. I am using Ubuntu Linux as my operating system on several computers. And at work, I am gradually changing everyone over to Ubuntu. I know that I am not the only one doing this. I wonder when Microsoft will ever wake up! I think that that all those decision people in Redmond still believe it is 1998!!! WAKE UP!!!

[gthurman]

If Equipt contains a hosted version of Outlook, compatible with ActiveSync, it might be used to backup Mobile 5/6 which no longer ships Outlook with PDAs. That extra benefit adds value to conflicting reports of how much Office is bundled with OneCare and for what length of time.

[ethana2]

Yeah really, I'll think about using it when it shows up in my apt repos..
*cough*
Don't see it going away any time soon, do they? Well, they don't see a lot of things.

[oogabooga2000]

They also say "680K" is more than anyone will ever need. Reliable insight this company has.
They also almost missed the Internet! (browser)


*cough* ...I think you mean "640K". At least if conventional memory serves...

[sanenazok]

I want to point out another part of this story: abandoning idiotic yearly upgrades. I adapted Quicken back in the day (Win 3.1) and have been stuck as their ATM every few years. Now they expire their versions after three years. I was going to hold out on my Q2005 but then I got tired of entering everything by hand so off to eBay I go to buy Q2008. I wish Quicken would only update its software with new features, and not just because the calendar on the wall has changed. Maybe with MS Money less of a competition now Intuit won't be so desperate for dough.

[SJ2571]

Er, Money is/was a load of crap. They're probably pulling it from shelves because nobody wants it, that's all.

[Penguinisto]

With the advent of online banking (and many banks adding a shedload of nice tools for money management to their sites), a separate money app is kinda redundant. Nowadays, you can do pretty much the same things with a web-account at your bank and a decent spreadsheet app.

[Mr. Dee]

I wouldn't be so quick to count Microsoft out. Microsoft would be considered the calm within the chaos of the 1980s because of how its software standardized the industry. Instead of IBM becoming a monopoly, it became just another PC vendor. IBM's reign on the PC industry in 80s was so short lived, 1981 to like 1983 with the introduction of other compatibles like Compaq, Dell, Tandy, Radio Shack, HP and many others because of a couple things, off the shelf components, MS-DOS and Intel x86. Microsoft has been around longer than IBM's dominant life span in the PC Industry and their doom have been predicted since the introduction of Netscape and Java and now Linux/OpenSouce, but Microsoft continues to be successful. As for the case of the Company's software becoming irrelevant, if Windows and Office is irrelevant because of the web, then so is OS X, Linux and Open Office. People still believe in those two platforms (Office and Windows), they are standards, guaranteed to work, well supported. Software in the future is not doomed, there is nothing to worry about, there will be no paradigm shifts, just a change in location, a lot of what we do today will be done mostly through the browser and their is certainly an opportunity for it with Microsoft's own software and they realize it but are milking it for what its worth between now and the time they do decide to webify their entire product line. There is one Office application that has been webified Outlook through Outlook Web Access component of Exchange Server which is based on AJAX. There are still issues to work out in terms of making it easy to program, maintain, provide redundancy, synchronization and 100% availability. And maybe once all those kinks are worked out, Microsoft will push Office completely to the web, through a number of channels, either through MS Partners hosting it or on their own servers. Microsoft is just as important in this race to make the web the place for everything. Everybody today is in its infancy, we are nowhere near to realizing what will happen in the next 10 to 15 years.

[t8]

I might download Windows if it was a free product with no ads or if they paid me to use it.

[t8]

I think this means that Microsoft is going to release an online version of Money in Office Live to compete with Google Docs.

[Mr. Dee]

I can't see a tie in between Office Live and an Online version of Microsoft Money except for traditional functionality like exporting data sets to Office programs like Excel. Right now, the decision is to stop pushing out minor versions of Money in shrink wrapped boxes in retail. It just does not make sense with incremental improvements each year. People still don't realize how integrated with the web Microsoft products have become over the years, Windows Update and the products own ability to update through the web get new features really breaths new life into the products. I believe if Money is going to embrace the web, either by becoming download only for new versions or updates or becoming a browser only service, its a win-win for the Company and its customers. No need to spend money packaging, no need to go to a brick and mortar store or order a new version, you always are guaranteed the latest version. The only thing left to do is position other products in this direction and means Office and Windows own built in apps.

[Had_to_be_said]

MICROSOFT SAYETH:

You dont own the software you pay for.


THE SUPREME COURT RULES:

If you possess a "physical-copy" of software, YES, you DO "own" it.


CONSUMERS SAY:

If, I pay for it... I will decide how I use it, where, and for how long.


MICROSFT NOW SAYS:

We will be phasing-out "physical copies" of software (in favor of downloads and "remotely-hosted", software). Its the future that everybody wants.

Figure it out..!

[chuck_whealton]

I'm a bit surprised there isn't yet an Open Source financial product that can provide the same functionality of Microsoft Money or Quicken.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com

[Mr. Dee]

chuck_whealton,

Linux does have finance software here are few: GnuCash, CBB and PearBudget , but I am sure they are just as limited as Microsoft Money version 1.0.

[bruceslog]

Shhhh !! Why are you trying to wake them up ?
They're becoming sleepy and less relevant with each passing year.. let them sleep !
Allow other, better options ( Linux, Open Office, Google, etc ) a chance to stretch and grow without being stomped on by the big, clumsy, sleepy beast.
Shhhhhhhh ! : )

[Penguinisto]

@Mr Dee:

Most money apps are pretty useless nowadays. Before banking-on-the-web, there was a need and use for something to maintain household budgeting and the like. MS Money has, as you've indicated, become pretty redundant.

I also agree with you that MSFT played a pretty prominent role in the PC revolution, but by no means was it the only player. MSFT got ahead for one big reason initially: superior marketing. The products were always somewhat buggy, but MSFT always managed to leverage what they had into something bigger.

Nowadays they are the ones who are moribund, slow-moving, and confused. IBM was smart enough to see long ago (after the OS/2 shafting) that the OS in general would become a mere commodity, and moved strongly into services and the enterprise, where the majority of its bread-and-butter is still produced. Not bad for a company that was founded on selling typewriters and 'adding machines' in the 19th century.

Question is, where will Microsoft be in 100 years, when they reach the same age that IBM is now? Personally, I doubt that they last even half as long.