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When Robyn Ross attempted to e-mail an invoice using her bookkeeping software last week, she was surprised to find it would cost nearly $200 to do so.
Ross, a Miami publicist, routinely used her QuickBooks Pro software for that task after purchasing it three years ago. But when she fired up the program days ago for the first time in more than a year, the e-mailing function no longer worked. A call to QuickBooks' maker, Intuit, diagnosed the problem: Ross needed to upgrade to a newer program. The cost: $199.
"I said: "This is really outlandish,"' said Ross, who originally paid $300 for the software. "Charge something reasonable if you have to do it."
Intuit's longstanding sunset policy, which requires QuickBooks users to pay for upgrades after about three years, has long been a source of customer complaints. The policy has also boosted profits at Intuit, which reported that QuickBooks-related revenue grew 15 percent in its last fiscal year, which ended in July.
Now that revenue could face its first serious threat in years.
The company recently resolved legal attacks on the sunset policy, which centered on allegations that it violates a California consumer-protection statute.
Last week, Intuit disclosed in its annual report that after a court dismissed the complaints, the plaintiffs signed a settlement in June waiving their right to appeal. The two lawsuits, filed last year, related to upgrade policies for Intuit's Quicken tax software and for QuickBooks. Intuit declined to disclose financial terms of the settlement. Attorneys for the plaintiffs did not return calls.
Intuit is also bracing for a new challenge to its franchise from Microsoft, which last month took direct aim at QuickBooks by introducing Microsoft Small Business Accounting 2006. Microsoft hasn't finalized its upgrade policy but said the software is supposed to work indefinitely, with customer support available five to 10 years after purchase.
Microsoft has tried to unseat QuickBooks before, to no avail. But this time could be different, according to J. Carlton Collins, a CPA and CEO of Accounting Software Advisor.
"If Small Business Accounting weren't a decent solution, the (Intuit) renewal policy would not matter much. However, everyone seems to think Small Business Accounting will make a dramatic impact," Collins wrote in an e-mail. "Clearly Microsoft is intent on deploying this product to the masses, and profits are a secondary concern."
QuickBooks and Small Business Accounting are among several similarly conceived programs on the market. A keyword search for "free accounting software" produces a lengthy list of returns. Sage Software sells another popular number-crunching program that, like QuickBooks, comes with an obsolescence policy.
Eben Moglen, a director of the Free Software Foundation, says forced renewal policies are basically information age remakes of the manufacturing practice known as planned obsolescence. Automakers used this practice to their advantage by producing cars that lasted only a few years before breaking down.
In the world of software, Moglen said, planned obsolescence is a more complicated idea: Unlike cars, people usually don't own commercial software.
"You didn't buy it. They simply licensed it to you," he said.
That said, planned obsolescence appears to have had little impact on QuickBooks' popularity. Sheldon Needle, president and founder of a company called CTS that evaluates accounting software, sees the sunset policy renewal fees as a relatively minor inconvenience for most users, who like the fact that the program is relatively simple to use and can be augmented with a plethora of add-on services.
"As long as it's working for them it's working for them," he said. "People would be foolish to try to switch to something else to save $200."
Ross disagrees. Currently, she's investigating other software platforms with similar features that don't require upgrade fees.
"I just want to buy the software and be done with it," she said.
