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Intuit recently made the announcement that six of their popular QuickBooks Desktop 2020 products will be discontinued after May 31, 2023, and another will be discontinued after October 3, 2023. The company is undergoing what is called a “forced migration,” which happens when a company discontinues a product (or suite of products) and forces customers to move to another product or suite.
If you are a QuickBooks Desktop 2020 customer and haven’t read it yet, you can find the company’s official announcement here. According to the company, the products set to be discontinued after May 31, 2023, are:
The product to be discontinued after October 3, 2023, is:
The official announcement covers the “what,” but it leaves out some important context that QuickBooks Desktop customers may feel that they are missing. Below we will help to explain the “why” and provide more context regarding why Intuit may have decided to make this change, to help customers better understand what it means for them.
The top-line reason that Intuit is forcing migration to their QuickBooks Online products is to keep up with industry standards and provide a better experience for their customers. The company faces stiff competition from others who utilize cloud computing, which can offer substantial benefits and ease of use for customers. The move to cloud-based technology has led to major advances in accounting software that desktop customers may not even know are available.
Some of the advantages offered through the move to QuickBooks Online are:
Along with the ability to provide a better customer experience, many software and technology companies are changing to subscription models. From their own business perspective, having customers sign up for a smaller monthly subscription and allowing a larger number of integrations through their software makes a business more “sticky” to its customers.
The allure of this subscription and integration model for the company is that the smaller monthly price rather than the large expense to buy new software all at once makes it more likely that customers will stay with them.
The migration to online services and the ability of the company to provide more integrations means that their customers are less likely to switch to a competitor when multiple business processes are all integrated with QuickBooks software.
While Intuit and QuickBooks have long been the leader in the accounting software industry, advances in technology have allowed new entrants and competitors to begin siphoning off some of their market share. Each of these competitors offers its own unique aspects to customers, whether they be customization, pricing, scalability, or data security protocols.
QuickBooks can be used by large enterprises and small businesses alike, so their main competitors can be broken down into those two main categories. At the enterprise level, the primary competitors for QuickBooks are:
At the small business level, the primary competitors for QuickBooks are:
For small businesses that currently use QuickBooks Desktop products, the migration to QuickBooks Online may require investments in both time and money (in the short run). Altogether the changes should lead to more streamlined processes, as the integrations may reduce some double-work that was previously required, and Intuit will likely continue to work towards the best customer experience that they can possibly provide.
One of the defining aspects of capitalism is that it allows competition, which forces companies to always work to offer a superior product to their customers. This move to QuickBooks Online not only allows the customer service team to have a better understanding of how the software is working within your system but will also allow for more seamless updates as the company works to improve the product and customer experience.
The migration from QuickBooks Desktop to QuickBooks Online will transition the costs of the software from one large payment when it's time to update the software to smaller, monthly payments that spread those costs out over time. It should be noted that even though the monthly costs are lower than one lump payment, they do add up to a higher total cost on an annual basis. Intuit is offering generous discounts for the first year, but afterward, they will charge at the regular rate, which is higher on an annual basis.
To put it plainly, QuickBooks Desktop used to cost $300, and the software purchase was good for three years (which breaks down to $100 per year). The regular rate for QuickBooks Online is $39 per month for the cheapest plan, which adds up to $468 per year – roughly 4.5x as much!
There may also be increased costs for companies that need to bring on consultants or specialists to help them make the transition. The streamlining and ability to save time on multiple business processes may make up for those initial costs in the long run, and the smaller monthly cost can help small businesses to finance their cost of the software more easily. There may be some initial growing pains as companies familiarize themselves with the new interface and usability of QuickBooks Online, but the time savings, in the long run, should make up for it.
For those small businesses who do find themselves having a difficult time making the transition to QuickBooks Online, the new format provides both live chat and live telephone options and specialized transition support to help customers with their migration.
For the small businesses that are making the move to QuickBooks Online, the transition should be relatively seamless. As with any change in software or data migration, it would be wise to have all of your data backed up just in case something goes wrong during the process.
The company has stated that any files created in QuickBooks Desktop should be able to transfer directly to QuickBooks Online and that the process should take less than an hour for the average company. Ultimately, the transition to QuickBooks Online means that customers will be able to have the advantages of advancements in cloud technology and software updates in real time, which can lead to an overall better experience and more efficient processes.
Much of the focus for QuickBooks Online has been put into the move toward mobility, scalability, and ease of use for customers. We saw how important the quick shift to remote work could be in some circumstances during the lockdowns in 2020, and the ability for remote collaboration and access through this cloud-based format makes bookkeeping and financial operations accessible no matter where employees are.
For mobility, the move to the QuickBooks cloud solution will allow customers to access, analyze, manage, and collaborate on company financial data from any device with an internet connection, no matter where they are. This change also allows companies to leverage the power of the cloud by removing manual processes that have typically been required by desktop software such as product updates, backups, server maintenance, and data transfers.
In summary, the move to QuickBooks Online should provide customers with greater access and a more streamlined process when dealing with their financial software.
Technology and software companies that support many industries are making the move to both cloud-based options and subscription pricing models, and it seems those will be the prevailing models in the long run. Due to the rapid advancements in cloud-computing technology and Inuit’s dedication to providing its customers with the best tools for managing their finances, Intuit is well-positioned to capitalize on emerging opportunities and further improve its customer experience.
It is safe to predict that QuickBooks Online will continue to gain traction and grow its market share as the go-to solution for small businesses in the near future. The product already provides greater features than its competitors, and the move to a cloud-based solution means that QuickBooks can continue to advance ahead of its peers.
Change can be scary, especially for something as important as the finances of a small business. The ability to stay competitive requires any business to be able to keep up with and stay ahead of changes within the marketplace, however, and advances in technology have those changes advancing at a rapid pace.
While the idea of a company forcing its customers to move to a new type of product may be alarming at first, we hope that this article has helped outline how this change is one for the better, in the long run. Improvements in mobility, scalability, access, reporting, and security are all moving in the right direction, and that’s where this change to QuickBooks Online will take any business that chooses to make it.
