The newly-independent Quicken will try to reverse years of neglect by its former parent Intuit, the chief executive of Quicken Inc. said today.
“QuickBooks and TurboTax put Quicken into the shadows,” said Eric Dunn in an interview, speaking of Intuit’s two biggest revenue generators. “Marketing [at Intuit] was focused on the lower-hanging fruit, and not on acquiring new users [for Quicken]. Quicken can provide comprehensive capabilities for people with some additional complexity in their lives, which often starts to show up in people when they reach their 30s.”
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As consumers marry, start families, buy a house, begin college and retirement planning, they find they need more than what their bank’s online website can provide to help them manage their money, Dunn argued. He was responding to questions about whether Quicken’s model — which relies on a complex piece of software run on a personal computer — is still workable. Quickendebuted in 1983, when it ran on PCs equipped with Microsoft’s MS-DOS and on the Apple II.
“This is a durable software company that can last forever,” said Dunn, who leads the new firm.
Dunn’s bullishness was grounded not only in his long tenure at Intuit — he did two stints with the company, was the fourth employee at the Palo Alto, Calif. firm and wrote some of Quicken’s early code — but also in his own personal stake.
Along with several other former Intuit employees, Dunn led a management buyout of Quicken when its former owner put it on the block last year. Last month, Intuit announced that equity firm H.I.G. Capital had acquired Quickenfor an undisclosed amount. The deal finalized March 31.
Quicken will be based in Menlo Park, Calif.
The separation of Quicken from Intuit, and the financial shot in the arm provided by H.I.G.’s acquisition, will allow for improvements, some of them long overdue. Dunn promised current Quicken users that the company is working its way down a list of to-dos, including a possible revamping of the Windows version’s update process and adding more features and tools to the Mac edition.
“We’re tackling the issues that customers have raised,” Dunn said. “The Windows product has a lot of functionality, but the cloud capability is limited — it only syncs a subset of accounts. There’s lots more that our customers expect from us.”
Top priorities on Quicken for Windows, said Dunn, are to refresh and modernize the user interface (UI), and to make the program more robust and reliable, all customer pain points.
Updates, for instance, often cripple the software, requiring users to reach out to support or dig up solutions on their own from the support discussion forums to again be able to launch and use the program. “We’re evaluating a new software update technology,” Dunn said, acknowledging that the aged update code wasn’t perfect. “We’ve found a third-party vendor that we think will do a better job [of updating Quicken].”
On the Mac, Quicken continues to not only lag behind the Windows edition, but also lacks functionality that existed in Quicken 2007, the last version prior to resuming development and getting Quicken 2016 out the door. Although Quicken 2016 for the Mac promises online bill pay, for example, the technology has been adopted by few banks, and the separate Quicken Bill Pay service does not work with the Mac version.
That’s riled many of the 30% of Quicken’s users who run the software on a Mac, triggering complaints that they’d been duped by the marketing claim that the program can pay bills electronically.
“This is number 3 or 4 on our list, definitely in the top 5,” said Dunn of making it possible for Mac users of Quicken 2016 to pay via Quicken Bill Pay. The $10-per-month service is not administered by Quicken — nor before that by Intuit — but by Fidelity Information Services (FIS).
Some things won’t change, however, now that the company is on its own.
According to Dunn, Quicken won’t become a cloud-based software service: Too many users balk at the idea of storing their financial data in a remote data center. They want it where they believe it’s safer, on their computers.
But a subscription service, akin to Microsoft’s Office 365? That’s possible.
“We’re open to that,” said Dunn when asked. “We’re investigating. It could make sense.”
Quicken already has some elements of a subscription-based revenue model: Intuit had a long-standing mandate that users upgrade every three years or lose all online connectivity, including bill pay and downloading transactions from their banks, credit card companies and securities brokers. Intuit had defended that policy — and Dunn did as well — by citing ongoing costs incurred to support the connectivity.
Presumably, Quicken as a subscription would be similar to Office 365, which stores the actual applications locally on personal computers. The annual fee for Office 365 gives subscribers rights to continue running the applications, and to receive a constant stream of updates.
As for the future of Quicken — a concern users raised whenIntuit said it would unload the division — Dunn remains ever-upbeat. “I think [users] can be completely confident that Quicken will be there for another 30 years,” Dunn said. “In a couple of years from now, I hope they say, ‘Wow, this is the best Quicken ever.'”
But H.I.G. may not be the owner that long, he acknowledged. “What often happens if that an equity firm operates [an acquisition] for four to five years, then seeks a liquidity,” Dunn pointed out. “That’s a good time frame for myself and the team, too.”
Some acquisitions like Quicken’s end up being sold to another buyer or to the management team that also invested, or the company goes public in an initial public offering, or IPO. The latter, said Dunn, would be the ideal end game.
“The business [of Quicken] has been quite steady and profitable,” Dunn added in another reassurance that the company could survive the transition to independence. “We have a stable business. But if we put a little bit of dollars into the development teams, this couldn’t just be steady, but a growth business.”
According to Dunn, Quicken was generating between $90 million and $100 million in revenue annually, more than double the $51 million Intuit said the group brought in during the 2015 fiscal year. Dunn asserted that Intuit had changed Quicken’s revenue recognition before it put the software up for sale, and had deferred a large chunk of income.