Novell/WordPerfect Plans to Make
Money on Money

November 1994

Part of the fall-out from the Microsoft acquisition of Intuit, was a need for Microsoft to divest themselves from their own personal financial management product, Money. It was deemed highly unlikely that the Department of Justice would allow them to add Intuit's 70% market segment share to Microsoft's own 10% share for Money.

The perfect solution was to "sell" the product to Novell/WordPerfect, for their consumer products software line. This gets the product out of the way of the Intuit/Microsoft deal, outside the problem area of market concentration, and into the hands of a company that Microsoft can clearly argue to the D of J is a large, reputable company, and one that is likely to continue to hold a significant and even growing share in the personal financial management market.

WordPerfect had already entered the personal financial management market earlier this year, with the acquisition of the tax-oriented product Tax-Saver from Parsons Technology. This product is also the side benefit of an Intuit deal; Intuit needed to find a buyer for the product when it acquired Parsons to avoid problems of its own with the D of J.

While details of the Microsoft/Novell/ WordPerfect deal for Money are still not public, Jeff Mallett of Novell told us that it was a no money up front deal, with Microsoft to get a small royalty on future sales of Money, for a limited period of time. Frankly, we'd guess that Microsoft would have paid Novell to take Money off its hands, in its rush to consummate the $1.5 billion Intuit acquisition of Quicken.

Novell gets both the product itself as well as a solid customer base of 1.8 million with a registration rate of 34% (or about 600,000 identified users). This puts them neck-and-neck with Computer Associates for the Number Two position in the category and only slightly ahead of Mecca, with an 8% market share. We'd guess they'd have to get to 15% or so to pull into a solid Number 2 spot on their own.

Novell also gets the software specs for the next version of Money, including a new, sexier interface, as well as all of the existing alliances and relationships, including deals with several banks, including Chase Manhattan, to use Money as a financial relationship front-end, and a pending deal with a yet-to-be-identified credit card company. When the product moves to Novell, when the deal closes (after D of J approval, expected within 30 days), development will move to Novell, but a Microsoft team will accompany the transition for the first four months, including support for the new interface design.

The whole deal, of course, is contingent on Microsoft's deal with Intuit; if that collapses, the Money deal dies, too.

Novell sees the Money deal as an excellent opportunity to add to its personal financial management product line, strengthen its consumer products, and underline its new pervasive computing strategy of offering computing any time, everywhere, even at your check book or credit card. Novell had already made bundling deals with Intuit for its Main Street consumer software division; it is widely assumed that these will eventually be converted into Money bundles (although WordPerfect assured us that the Intuit deal with MainStreet would go forward for now).

Money could be available from Novell as early as November. It's currently available in the U.S., Canada, the U.K., Australia, France, and Germany. Incidentally, in the nascent European market (which totals $6 million), Money has a 60% market share, and banking deals in Germany and France.

Comments or Questions: Send Email to opinions@wohl.com

Home/ Search / 2005 Articles / Issue Archive / Free Newsletter

Entire contents © 1994 by Amy D. Wohl. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden.