Intuit Deathwatch

Mike Block for Quickbooks-blog writes: This will be the first of a long series of posts.

Intuit began in 1983. It quickly killed 46 competitors in the home checkbook market. It later crippled small business accounting program competitors. A national conference keynote soon told CPAs:

For those thinking of fighting QuickBooks,
the war is already over and QuickBooks won.

Intuit soon bought the best consumer tax program. It competed in predatory ways, adding rebates, cutting prices, giving away programs and adding many features if challenged. This made even Microsoft keep failing when competing with Intuit. 

Intuit soon had 95% of the small business accounting market, around 95% of the home checkbook market and around 80% of consumer tax. As a QuickBooks insider for more than 11 years, I exchanged countless emails with two Intuit CEOs and many of their top assistants. Highlighs included getting  Intuit to build a feedback website (almost) as I suggetsted and getting it to make a QuickBooks program change in four days, the week before Christmas.

I also got permission to publicise and encourage QuickBooks hosting for many years, despite contrary Software License Agreements. Intuit then used these agreements to force ridiculous terms on hosting companies. They included:

• A four-year so-called beta test for three companies
• The companies advertised that they were the only licensed companies
  (CPAs are risk adverse)
• Pay $3,000 with hosting application (no approval guarantee)
• Give all financial, operating, customer, sales and security data
• Let Intuit make data public and use it to compete
• Pay $15,000 more, plus $5/month/customer, increased at any time

About 15 hosting companies may now have some allegiance to Intuit, but about a thousand others and their users despise it. In addition, many of the 500,000+ QuickBooks hosting users know that Intuit now charges an extra $5/month to let them use QuickBooks efficiently.

I especially despise this because I initially got permission (direct from Brad Smith, now Intuit CEO) to publicize hosting. This came after getting near unanimous support from fellow ProSeries (professional TurboTax) Advisory Council users and Intuit staff. I then had repeated requests ignored, for Software License Agreement changes, so it would be legal. I even had an Intuit VP later say I was violating a non-disclosure agreement, when everything I wrote was not only with Brad's permission, but was made public initially by discussions with people from my QuickBooks hosting company (who did not sign non-disclosure agreements).  

As it is, the QuickBooks Software License Agreements make it illegal for you to share QuickBooks (when visiting clients) or to use internal file servers with different users (even if each has a copy of QuickBooks).

It is outrageous that Intuit would make all hosting company applicants disclose operating, financial, customer, sales and security data, especially without guaranteed hosting approval. It is far more outrageous that hosting applicants must agree to let Intuit make this public or to use it to compete against them, since they apparently update this data annually. Everyone expresses shock or amazement on first learning this.

I also never understood why the Department of Justice let Intuit flout anti-trust laws, especially as it conspired not to hire employees of other tech companies. However, monopolies rarely survive. As later posts will show, an Intuit deathwatch has now begun.

I may be uniquely qualified to predict this. I told Brad Smith he would be the next Intuit CEO two years before he was. However, the evidence is now far more compelling.