This blog post was written before Javelin was renamed to Capsule. See this post for more details.
A decade or so ago when Microsoft was in its heyday, we bought software and installed it in our homes and offices because that’s the way it was. Fast- forward to 2009 and we know that consumers are embracing software and services that operate online. The recent announcement from Microsoft that they are discontinuing MS Money provides a good example of the way it was then and the way it is now.
Microsoft in their own words have admitted the market has changed:
With banks, brokerage firms and Web sites now providing a range of options for managing personal finances, the consumer need for Microsoft Money Plus has changed. After suspending annual updates of Money Plus in 2008, Microsoft is announcing today that we will no longer offer Microsoft Money Plus for purchase after June 30, 2009.
In the same way MS Encarta was made obsolete by Wikipedia, MS Money hasn’t kept up with our expectations for tracking personal finances. Online services like Mint, Wesabe and Quicken offer not only an easier way to get started, but also a whole new way of presenting and using your financial information. For example Mint can compare your spending with other users and highlight areas where you are paying over the odds. Because Mint is hooked up to your bank, it also keeps track of your transactions as they happen and alerts you to events such as your account running out of money. Neat stuff and much more useful than MS Money ever was stuck in the constraints of your PC.
Part of the reason Microsoft have discontinued Money is due to a cost cutting exercise. Fact is the cost of distributing and supporting installed software is expensive. With an online service there is only one installation to support, not millions. This results in lower costs or even free services for consumers.
While individuals have been busy trying out these new services, businesses have been slower to change. After all, which is easier - trying out Mint for your own use, or convincing your boss to use a new online accounting system to run the business? Small tech savy businesses are leading the way by mashing up their pick of online service such as twitter, CRM, accounting, wikis and email marketing. You can see an example of this in my post showing Javelin CRM integrated seamlessly with Xero and KashFlow. In the same way that personal apps like Mint have made MS Money obsolete, the writing is on the wall for traditional business apps stuck in PC’s such as Act!, Sage and even MS Word.