The Start of the End of Shrinkwrapped Software?

Microsoft’s venerable Money personal finance application is going away–from retail stores, at least. Over at ZDNet’s All About Microsoft, Mary Jo Foley reports on the fate of the application, which used to get a yearly update. There will be no 2009 version this Fall–Microsoft says it just doesn’t need a new version that often–and the program will be sold only via electronic distribution from now on.

There’s no way to interpret this as good news for Money (which looks like it’s officially known as Money Plus these days). If it were fabulously successful as a program that received annual updates and was sold in a box, Microsoft would just go on selling it that way for as long as it could. But I think that what’s happening to Money will happen to an awful lot of applications over the next few years–and that it will be a good thing for software consumers and software companies.

Even if desktop applications themselves stick around, selling them at retail stores is an awfully inefficient way to get them into the hands of customers. Anyone with a broadband connection can snag a current copy of nearly any major application reasonably quickly by downloading it–and in most cases can start with a free trial version and then pay only after confirming that the app is worth the dough. It’s a lot more efficient, and nobody has to kill any trees or put gas in any delivery trucks. And the software publisher doesn’t have to cut a retail store or distributor in on its profits.

In the old days, boxes of software filled aisle after aisle at stores such as CompUSA. These days, CompUSA is no longer a national chain, and the software sections in Best Buy and Circuit City are small, archaic, and not particularly crowded with shoppers. Come to think of it, I can’t remember the last time I bought an application in boxed form anywhere…

As for Money not receiving a 2009 update, that seems a little odd–especially since Microsoft is releasing that news in August, presumably long after development work for Money 20009 would have begun. But the frequent updates for Money and arch-rival Intuit Quicken haven’t necessarily been good things for consumers. Both applications have been around for so long that they’ve had all the key features for eons; both have added features that haven’t been a big whoop–or, in some cases, which some customers have actively disliked. And Microsoft and Intuit have both tried to nudge consumers to upgrade by disabling the online banking features in older versions, a strategy which–no surprise!–tends to drive people bonkers.

When you think about it, annual upgrades are both too frequent and not frequent enough. The need to release a Money 2005 and Money 2006 and Money 2007 and Money 2008 forced Microsoft to introduce new features whether it had anything especially compelling to offer or not. But when Microsoft did have something new and worthwhile to offer, it had to wait for the annual upgrade to add it.

One of the many virtues of online applications is that they can add features in a more logical fashion: frequently and instantly when there’s new stuff worth adding, and not at all when there isn’t. That’s Google’s strategy with its services, and it seems to work for everyone involved.

My guess is that the end of retail distribution and annual updates for Money means that the program is headed into limbo, and may never receive another significant upgrade. If I used it–and Money has millions of customers, even if it never succeeded in crushing Quicken–I’d keep that in mind and would at least consider moving to Quicken, which will surely be around for a long time in its current form.

But if Microsoft did keep Money around as a download-only application, updating it only when it could make clear improvements, that would be kind of cool. It wouldn’t necessarily be a bad thing for current Money users, and it might be a sign of things to come for application distribution in general.

That’s assuming that it doesn’t want to make Money into a Web-based application, though–and it won’t be long before the days are numbered for almost any desktop application that doesn’t have some sort of online version.If you’re reading this, you’re part of the last generation for whom software was primarily something that was stored on a local drive rather than on the Internet.

And here’s a prediction I feel utterly comfortable making: The day just isn’t all that far off when BestBuy will quietly decide to stop selling computer software, period. If it has anything more than a small, perfunctory shelf of the stuff in 2012, I’d be startled…

via Technologizer