Microsoft Money to be sold online only

The tradition of walking into a store and picking software from the shelf already seems to some PC users as old-fashioned as sitting down and ordering a drink from a drug store soda fountain
In this era of high-speed Internet access, it's often easier to click a mouse and download a piece of software straight to the computer desktop, or fire up a Web browser and access a program as an online service.
Most people in the industry don't expect packaged software, as a category, to die anytime soon. But changes in technology and consumer habits are increasingly causing software companies to think twice about those boxes and installation disks that they ship to stores.
Which is one reason consumers will no longer find boxes of Microsoft Money in stores after current supplies run out. Microsoft said earlier this month that it would discontinue packaged retail sales of the personal financial-management software - instead shifting entirely to online downloads.
Microsoft says it's embracing a trend experienced by that product: In the past year, more than 50 percent of Microsoft Money Plus sales came via downloads, the company says. That was more than three times greater than in the previous year.
"This is really the key stat that helped make the decision very easy for us," said Chris Jolley, group manager for Microsoft Financial Products.
Microsoft - which still sells lots of copies of Windows, Office and other programs in traditional stores - says the decision applies only to the Money product line. In a statement posted on the Microsoft Money online forum, the company said it "does not see shrink-wrapped software going away anytime soon."
Numbers from the NPD Group research firm support that assertion: As of last year, about 70 percent of the dollar volume of software sales was still going through traditional, bricks-and-mortar retail stores in the United States.
Packaged software is "still an important piece of the software sales pie," said Michael Redmond, an NPD analyst, in an e-mail message last week.
But the market is shifting. Through June of this year, the dollar volume of packaged software sales in the United States was down about 15 percent compared with the same period last year, according to NPD data. E-commerce software sales - which include digital downloads and online purchases shipped to consumers in the mail - were the only software distribution channel showing growth in that period.
Microsoft competitor Intuit Inc. also offers downloads of its software, including QuickBooks and Quicken. But the Mountain View company says it plans to keep its products on traditional store shelves.
"I'm still a big believer in packaged-goods software," said Rick Jensen, senior vice president and general manager of Intuit's Small Business Division. "If you go to the retail stores, you probably see that the amount of shelf space that they give to packaged software has declined, but it's still one of our best channels, the place that we get most of our new customers, and we're still excited about it."
Benefits of downloading include near-instant gratification for the customer, business efficiency for the vendor and a reduced impact on the environment, from eliminating packaging. It's also possible for companies to make incremental fixes more quickly with downloadable software.
"In the online world, you can literally change some of that stuff real time," Jolley said. Online downloads also increase the flexibility to offer pricing promotions, he added.
Apart from downloads, software is increasingly being delivered as an online service through a browser, as exemplified by Salesforce.com's on-demand software. Microsoft, Intuit and others also are taking a hybrid approach, offering online services that work in conjunction with PC-based software.
As Microsoft announced plans to discontinue the packaged version of Money, the company also said it wouldn't be releasing a new version of the software at all this year. Jolley declined to speculate about when a new version will come out, but he said personal finance remains an important category for the company.
Asked if Microsoft is worried about losing market share to Intuit by not having Money in physical stores, Jolley said it was "certainly a consideration that we're well aware of." But he said the company will be doing its best to express the benefits of downloads to consumers. It's also talking with retailers about making Money available for download directly from their sites, not just from Microsoft's download site.
Intuit's Jensen, for one, is fine with Microsoft's decision to stop selling packaged versions of Money in traditional stores.
"When someone goes into a retail store, looking for personal financial software, they're going to see Quicken," he said, "and that's all they're going to see."
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