Michael Hiltzik over at The Los Angeles Times reported this morning, Intuit Changed TurboTax This Year, Triggering an Enormous Customer Uproar. What they did was pretty bad. The base $59.99 TurboTax has always included the filing of schedules C (small business expenses), D (capital gains), E (suplemental income) and F (farm income). These are pretty common forms, even for relatively poor people. But if you need these forms, Intuit will charge you $30 or more on top of your initial investment. This is a pretty obvious cash grab. And a stupid one too. People have other options like TaxAct and any number of online services. But it appears that there are a lot of people running companies who can only see as far ahead as their next quarterly bonus. Of course, in this case, such shortsightedness backfired — since 23 December, the share price has dropped 9.2%, and that’s after a modest rebound this morning.
I’m sure that Intuit will weather this storm. But it brings up some broader issues regarding software. The most obvious one is that taking away functionality is a bad thing. Probably the best thing you can say for free market capitalism is that it drives down prices over time. So when you adjust for inflation, that huge high-definition television you buy today will cost you less than some tiny black-and-white television you bought back in 1965. So what is Intuit doing by providing a lesser product for the same price? They are raising the price but trying to fool the public. It certainly would have been okay for them to come out with some kind of minimal TurboTax, but that would have had to sell for less money. And like I said, this was just a cash grab.
A bigger issue to me is the cost to users of software changes. I’m still scarred from the major UI change that Microsoft made to Office 2007. And don’t get me started on Windows 8. It isn’t that I don’t like to learn new skills. It is that learning new ways to do things you already know how to do is time consuming and thus costly. As a result, Office 2007 made me switch to Open Office (free download), and I’ve never regretted it. Similarly, Windows 8 has made Will and me seriously consider how we can get Linux to work for regular computer users.
I’m not saying that software updates are a bad thing. There are times when they make sense. But in commercial software, updates are usually a business decision: the company needs to make some more money. For 99% of the software users, the enhanced capabilities that the new version provides will not be used. But even if the user wants the “latest and greatest” or, in fact, needs it, the company could at least not change things so that old skills must be abandoned.
Intuit screwed up in an especially egregious way. But the basic thing they did is standard procedure in the computer business. In general, these companies don’t want to make you more productive. Your productivity is irrelevant to their mission. They want to sell you a new piece of software and if that costs you hours or days of productivity, not problem! That isn’t their business.