There are winds of change whirling about, and people are starting to take notice. First came the death of Microsoft Money a few short years ago. Now, Quicken is thinking about significantly modifying its product.
For better or worse, it seems like the slow and painful death of desktop personal finance software is among us. Don’t get me wrong—many people still love desktop products and dislike the idea of their data floating around on the web.
But for an already non-profitable market segment, these new changes are starting to put the pressure on. Here are the primary reasons I think online is starting to beat out offline:
- Yearly upgrades are needed to stay up-to-date. In the case of packages like Quicken, online services are actually disabled after three years, essentially forcing your hand. A lot of people even upgrade yearly because the new features are “appealing.”
- Updates are infrequent and lag considerably. Let’s face it—at the speed of innovation today, once-yearly upgrades just won’t cut it. Factor in the programming time actually required to implement new features, and we’re actually working on a 2-3 year old piece of software. Online upgrades? Delivered instantly, as part of the package fee (or free for some), and much more relevant to the times.
- People are becoming much more comfortable with cloud computing. There’s a certain amount of distrust with giving your bank passwords to someone else, but people are putting more and more faith in the security of these secondary companies.
- Desktop packages are overloaded with useless features. Not useless for everyone, but useless for most. The complexity of some features can be so incredibly overwhelming that people just give up, which is the last thing we want.
- Banks are implementing “Quicken fees.” Don’t even get me started, but yes—these fees are specific to desktop packages (Quicken, MS Money), and can be avoided by using another type of money manager. The fees range from $5-$15 a month.
At the same time, there’s a strong push by online companies to innovate and grow. The perfect storm.
There are still a few that are doing it well on the software end—YNAB being a great example. But they’ve done well to get rid of many of the reasons I mentioned above and stay in the game.
Only time will tell how things shake out, but I think the tide of the online money managers is coming in fast.
How do you think will we manage our money in 5 years?
Photo by Vectorportal