QuickBooks

Is QuickBooks Desktop Dead?

Written by Charlie Russell

Is QuickBooks Desktop Dead?People ask me this all the time. Is QuickBooks Desktop dead? Will Intuit discontinue this product soon? For several years now people have convinced themselves that there is no future for this product, in spite of public statements from Intuit that there will always be a desktop QuickBooks product. Let’s take a look at the current state of QuickBooks on the desktop, where I think it is headed, and why I don’t see it going away in the near future.

For the sake of discussion here I’m going to refer to “QuickBooks desktop,” but that actually is a composite of three separate products: QuickBooks Pro/Premier, QuickBooks Enterprise, and QuickBooks for Mac. I’ll make some specific predictions on each of these individually.

This article is part of my series on Intuit and the future of QuickBooks. The articles are:

Why Do People Think It Is Going Away?

There are a lot of reasons why people are worried about the future of QuickBooks desktop. Intuit clearly states at every opportunity that they believe that their future is “in the cloud.” Not long ago, if you went to the QuickBooks website, it was almost impossible to find even a reference to the desktop product! I’ve also had people come up to me who said that they had “talked to Intuit CEO Brad Smith and he says he has a five-year plan to discontinue the product” (something I’ve never heard from him myself).

In addition, let’s go back to the five key points that I see as Intuit’s plan for the future:

  1. Working in the Cloud: QuickBooks desktop is, obviously, a “desktop” product, not a “cloud” product. Yes, you can access through the Internet it in various ways, but those all have some significant costs and limitations.
  2. Mobile technology: It is difficult to connect this easily with mobile devices. Intuit dropped their own mobile integrated product some time ago.
  3. Data collection: This is a cornerstone of Intuit’s plans for technology advances, but QuickBooks desktop data is not easily accessible to Intuit.
  4. One-person businesses and contract workers: QuickBooks desktop is not the easiest product to work with. I know that Intuit has said for years now that anyone can run their business with QuickBooks, but we all know it isn’t all that easy for many people to work with, without a lot of help. Hey, that is why people like me are in business!
  5. Globalization: QuickBooks desktop is limited to the US, Canada and United Kingdom. And I seriously doubt that it will ever be available in any other country-specific version.

Isn’t it clear that this product has no future? Maybe, maybe not…

Follow the Money

OK, so let’s look at revenue for the QuickBooks environment.

Here’s a chart that I showed before in my earlier discussion on QuickBooks Online. It shows that revenue has been increasing over the past few years, it also shows that a significant amount of revenue comes from “attachments.” Intuit depends heavily on the revenue that is generated by their own add-on products, such as QuickBooks Payroll and QuickBooks Payments.

QuickBooks Online revenue

Now let’s throw in the revenue generated in the desktop environment:

QuickBooks Desktop revenue

Several key points that should be obvious here:

  • When you include consideration for “attachments” in the revenue stream, the desktop environment is generating significantly more revenue than the online market.
  • Another very interesting point is that revenue for the desktop increased in fiscal year 2016 over the prior year.

Folks, I can’t think of clearer evidence than this. How could Intuit turn away from that significant revenue stream? They do have a history of cutting adrift products that don’t perform well or that they don’t think fit their business model, but I can’t see them cutting off QuickBooks desktop, overall.

Intuit has known about the significance of the revenue stream of “attachments” for a long time now. I do, however, think that they were caught by surprise by the growth of desktop revenue this year.

They also see this revenue stream as being fairly steady for the near future, as they show in this graphic from the Intuit Investor Day presentation in 2016:

QuickBooks revenue projections

Note that “SBG” is “Small Business Group” and “TT” is TurboTax.

Clearly Intuit believes that their future is in the online marketplace. All of their research shows that this is where the world should be heading. And for several years now the online products have been the focus in new development. However, the desktop product continues to address businesses not served by QuickBooks Online, those that have complex business needs.

How long will this last, though? That is hard to predict. Fully 80% of the new customers to QuickBooks Online are first time users. These people expect to be online and using their mobile devices, and that isn’t the desktop product. Existing QuickBooks desktop users aren’t moving over to QuickBooks Online rapidly. There are several reasons for this, in my mind:

  • QuickBooks Online doesn’t have all the features that QuickBooks desktop contains. People don’t want to give up features like sales orders, assembly builds, backorder management and more. However, Intuit is continuing to expand the online product.
  • Many desktop users are worried about data security “in the cloud.” However, the younger generation of business owners are less concerned about this because everything they do is mobile and in the cloud. They don’t see it as a drawback.
  • I find that many desktop users just aren’t comfortable with working “in the cloud.” I expect that Intuit’s plan is to expose desktop users to online services, such as moving QuickBooks Payments to a cloud-based service that integrates with the desktop product, getting people incrementally comfortable with the advantages of being online.

OK, so I’ve been talking about “QuickBooks desktop” collectively. Now let’s break it down into the component products. I think that each of those products has a different future. Note that when Intuit shows revenue and user information in their charts they don’t usually provide us with separate figures for QuickBooks Pro/Premier, QuickBooks Enterprise and QuickBooks for Mac.


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About the author

Charlie Russell

Charlie Russell has been involved with the small business software industry since the mid 70's, and remembers releasing his first commercial accounting software product when you had an 8-bit microcomputer with one 8 inch floppy disk drive. He has a special interest in inventory and manufacturing software for small businesses. Charlie is a Certified Advanced QuickBooks ProAdvisor with additional certifications for QuickBooks Online and QuickBooks Enterprise, as well as being a Xero Certified Partner. Charlie started blogging about QuickBooks in 2008 (Practical QuickBooks) and has been the managing editor and primary writer for the Sleeter Report since 2011. Charlie can be reached at charlie@ccrsoftware.com

Visit his CCRSoftware web site for information about his QuickBooks add-on products. He is also the author of the California Wildflower Hikes blog.

23 Comments

  • Thanks Charlie, this series is awesome.

    I definitely agree it’s obvious that Intuit eyes QuickBooks Online as the future. But like many, we’ve found that our bigger and more complex clients really have difficulty migrating to QBO. Some are relieved to migrate back to one of the desktop products. We’re seeing that the sweet spot for QBO is on the low end of business revenue and complexity. Bigger businesses are still best suited to go to Enterprise, which has a better feature set to meet their needs. And frankly Enterprise fills a big hole in the marketplace. QBO doesn’t provide the larger and more complex companies what they need just yet.

    I am eager to see how QBO evolves in the coming years, and if it will truly replace the desktop products…especially Enterprise. I expect it to be on par with Enterprise in the 5 year range. But I’m not sure it will ever truly replace it. I think there’s a strong market for both products, even if the capabilities are similar.

    Kurt

    • Thanks, Kurt! Haven’t heard from you in awhile.

      I think it will be a very long time before QuickBooks Online is on a par with Enterprise. In fact, I wonder if it ever will, at least BY ITSELF. However, addon products are going to fill in a lot of those gaps. There are addon products that go a long way towards “Enterprise parity” when you talk about heavy inventory related businesses, for example. But I don’t see things like heavy manufacturing ever using QBO by itself. Also, we are going to start to see features in QBO that don’t exist in the desktop products. That is when it is going to be very hard to compare desktop to online.

      But, yes, at this time, without addons, QBO is definitely aimed at the smaller business, service oriented.

    • There are all kinds of them, but each has different advantages, and you have to choose the one that fits your needs. https://apps.intuit.com/ lists quite a few, some of which I am familiar with, some that I am not. SOS Inventory has been around a long time. Cin7 fits some businesses and has a lot of followers. I really like DEAR Inventory for some kinds of situations. Unleashed, HandiFox, Agiliron, All Orders, BarCloud, SalesPad Cloud are all products that I have some familiarity with and are good options. But they are all different, and there are many kinds of businesses dealing with “inventory management”.

  • Intuit will be eyeing the higher revenue/customer from a subscription model. They will happily toss half their old customers if they can keep the other half and get a lot more cash out of them – and that’s the name of the game with a subscription model (ask Adobe).

    So the high revenue from Desktop users might just be seen as something large to milk. Once they have you on subscription (for Desktop Software) and once they make more of the add-ons cloud based, you’re stuck with them. Then they force migration to QBO. I would trust Intuit’s statements about preserving Desktop about as much as I’d trust anything their marketing people say.

    You make a really good point about Desktop Pro probably being the first Windows version to walk the plank.

    • As I said, I believe, they already have a subscription model as an option, so they have a way to test the market there.

      I’m not sure what you mean by having more add-ons cloud based in relation to this, as that is a statement open to interpretation.

      Keep in mind that although I’ve referenced Intuit’s statements about the desktop being around, I’m not basing my claims on that. I’m looking at the revenue, and staffing, and other factors. I do believe that there will be an end to the desktop product, but I don’t expect it to be in the very near future. Not when you count the entire product line, including Enterprise.

      But, we’ll see! And, Intuit does change course fairly often, so we have to revisit the issue every couple of years.

      • Hi Charlie, I have a comment about Quickbooks Online. I currently run QB Mac 2016 (the last year for QB Mac) and I ran a 30-day trial of QBO to test the product. There is a feature we need in QBO which is absent, which was a deal breaker for us: namely, that we need to organize customers by “type”. We have clients that are under contract with us – and we also have clients that are on a pay-as-you-go program. QB Pro Windows, and QB Mac have this feature – the ability to assign a “type” to each customer profile. Can you offer this feedback to Intuit? We could use QBO if that feature existed.

          • Hi Charlie, thank you for your reply. There is one more feature, that to my knowledge, none of the Quickbooks products have offered – namely, the ability to run a summary report titled: “Income by locality”. City business license fees, are based on gross receipts accrued within a city. Companies report their 12-month sales on their license renewal form, which determines the license fee. There is no easy way currently to summarize sales by city. Can you get this message to Intuit? Thank you.

  • Very informative article. Love the insight on possible changes in future Enterprise development. Would love to see more integration abilities to desktop. Reporting, CRM, Marketing Automation, etc.

  • Thanks so much Charlie for the very comprehensive “state of the union” series. It was extremely well organized, thought out, and written. I appreciate your hard work. I commented on the various articles along the way.

  • This has been an interesting series and great analysis. I can’t see Intuit abandoning desktop in the near future either. It’s just a better fit for some clients. Others work better with QBO.

    I realize Intuit would like to see those users that need more features migrate to QBO plus add-ons. But the cost for some can easily be quadruple what the desktop option would cost them.

    Both products (desktop & QBO) have different strengths. It’s really nice having both.

  • Like with any product in the cloud. In accounting software terms they are relevantly new. The desktop products have been built by likes of Sage and QB and have aged 20-30 years. The new Online product will not be direct replacements for a time yet and take time to be as feature rich. However. It’s a fact that most people using these desktop products are in most cases not using the product to its full potential nor do they need all of it. So QBO, Sage One and Xero penetrate that market well. As well as new business sales in the small and micro world. In time they will be as feature rich or provide ISVs that write into them. Its also still important to nurture the long standing customers for life as well as new businesses. Sage do this well as they provide a choice, desktop, hybrid, online. That scales from micro to Enterprise on all 3 styles providing all round choice. What’s more important is the automation online software provides. Many people should be preparing for the effects of AI, and bots on the services they provide to customers and how to utilize that to reduce labor and time and increase effectiveness and productivity.

  • The sad things is that people who use QBO don’t realize what they are missing when they have never used the desktop version. Ignorance is bliss as they say. However, for the cost of QBO and the features compared to the desktop version, QBO falls ridiculously short. Intuit does a hard sell for people to subscribe to QBO even when they know it is not as good a product. I understand, it’s a business and they are there to make money. But misleading customers into purchasing or even upgrading to a product that they know will not fit their business is just reckless and irresponsible.

  • @Kendall, I’ve been using QuicBooks desktop since the DOS version, and know exactly what is under the hood in each product. There is a trade off when selecting products. QBO is definitely not the same product as QBD. If you need certain features found in QBD, then that’s the product to use for that client. But, for more simple clients where your main requirements are multi-user remote access, and heavily rely on bank feeds, then QBO is the way to go, because it’s Bank Feed is far superior than QBD. As a result, I can get those clients done much faster in QBO than QBD. It really depends on what the client needs.

  • In the uk enterprise was axed a few years ago and now desktop is a monthly subscription at double the price of QBO so I see the end in sight

    • I do tend to be a bit USA-centric, since that is the market I work in and where I have the most connections at Intuit. I did point out the move to subscription pricing in the UK, and I believe that if this works as they hope in the UK (that is, encourages people to move from desktop to online) then we’ll see it here.

      Pro/Premier sales in the UK have never been stellar. Enterprise sales also were quite low. So Intuit axed Enterprise and is trying to get everyone to the online product. This allows them to focus desktop sales to the US and Canada markets, where they are doing better.

      • Wow! Glad I’m not in the UK, however a similar thing will probably happen here in the US in ~5 years, except Enterprise might be the one that hangs on while Pro/Premier is discontinued. We see this pattern with Intuit when they are shifting direction. Reduce marketing/availability, then report reducing sales on that product, and finally, discontinuing the product based on poor sales performance. Gee I wonder why? If it’s not a super well performing product, then Intuit can’t be bothered, even if it serves a need in the market. I use and recommend QBO for what it is, but it’s not a replacement (yet) for either desktop products for many clients, regardless of what Intuit’s marketing machine would like users to believe.

  • Having worked with a lot of accountants in the UK and USA i have seen both sides. The UK accountant is very pro active with new technology not just accounting but using add on solutions like T-Sheets, Receipt bank to name a few. Subscription is even a consideration anymore, its just the way its done and not many think twice about it. This is a market standard, Direct debit (auto pay) is a requirement for most retail, technology, IT, Mobile, Telephony, utilities. I’ve noticed in the USA still a lot of traditional methods still being used with check writing. In my 35 years living in the UK ive never written a check neither have any of my friends and work colleagues. Subscription is just not a big deal. Also the HMRC have gone all digital and will be fully digital by 2020 so this was a huge influence. Not to spiral off point. The USA still has a lot of traditional thinking customers being led by traditional based accountants, probably worlds most complex tax system, and broadband still reaching to further regions this is an issue for cloud adoption. Desktop is still the stronger product but cloud has all the automation. As i eluded to above Sage have built a desktop hybrid with 50c, 100c so they have desktop with automated tools like T-Sheets and bank feeds. Also their cloud products talk to their desktop so you can use Sage One and Sage 50c together. Then they have their cloud portfolio Sage One (similar to QBO) and now Sage Live a mid-market customization cloud software built on the Saleforce platform. Nature will take its course the market will shift Sage seem to cover all basis along the road.

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