In personal finance, the name to know remains Intuit Inc. The company's Quicken software is the clear winner in the category, despite Microsoft's attempts to unseat it. The two have a history. Microsoft tried to buy Intuit back in 1994, but the plans were nixed by the government. When that failed, Microsoft returned to its normal turtle vs. hare strategy, where it consistently improves its products over time and eventually passes its competitors. While the strategy worked with Windows, Word and other Microsoft products, so far it has failed to catch Quicken.
While Microsoft has made some slight gains, mostly in the retail sales, "the market is Quicken's to lose," said Chris LeTocq, analyst at research firm Dataquest. "Microsoft is going to have to leverage their online presence, because I don't think they can beat Quicken in retail."
Quicken's dominance in retail does not give the full picture, however. Users often simply take whatever comes with their PC or whatever their bank is giving away. This becomes an important factor when one considers that between them, Microsoft and Intuit have some 13 million customers, a tiny figure compared to the number of families with bank accounts.
Microsoft may have an advantage down the road. In its corner is the fact that many users simply use what comes with their computer, and Microsoft says more PCs come with its software. "The momentum is with us," said Richard Bray, product unit manager at Microsoft.
So the fight centres on convincing new users that Intuit or Money is the product to go with. That makes marketing, not technology, the battlefield.
Marketing is key because, for many consumers, the decision between Money and Quicken is a "Coke- Pepsi thing," said David Lewis, vice president for interactive markets at Union Bank of California. "Based on the ads they were running last year, Microsoft and Intuit are trying to get users to switch," he said. "But when you look at the potential universe out there, it just doesn't make sense."
Both companies have tried to tout ease of use and planning as key features that a new user must have. Intuit has stressed its WebEntry feature, which lets users enter their data through a secure Web site and download it later on. Microsoft Money, meanwhile, has a feature that lets users download statements from more than 450 banks and financial institutions.
Both companies let users analyse their finances to help plan for future expenses, be it taxes or college. Intuit recently launched a new retail promotion campaign that highlights the product's ability "to help you take advantage of opportunities you may have missed," said Mark Goines, Intuit's general manager of consumer products. One display shows a man chasing a dollar bill with a butterfly net.
Microsoft, meanwhile, is touting its new partnership with American Express, which offers financial advice to Money users.
Microsoft includes Money in its Home Essentials package, a popular offering for many consumer systems, that bundles Word, Encarta, Works and other applications. That bundle "has been a good way for us to get Money in the hands of people who are looking for a broader solution," said Bray. LeTocq doesn't see as much promise in that bundle, however.
"Microsoft doesn't have an application like Office at home that it can leverage to make Money successful," he said.