What I found out about TurboTax Controversy with their activation system?

Question

Have your people checkout the Turbo Tax contraversy with their activation system. Check PC magazine for reviews and Amazon.com for their reviews. It sounds really scary to me. Let me know what you found out. thx. Marcia Bostrom 480-898-1635 or work 480-346-4431.

Answer

This question was answered on March 22, 2003. Much of the information contained herein may have changed since posting.

Good for Intuit! When people have 3 cars and they get the oil changed on all 3 cars, They pay me for 3 oil changes Why should the software companies be any different? If you have 3 PC's, then you need 3 copies of the software.

As much as I would like to give the other 2 oil changes for free, I just can't I would be out of business in no time.

Real people with real families work for these software companies and they have to eat too.

Posted by: Geek on February 13, 2003 10:22 AM

We are tax preparation professionals We started with Turbo Tax in 1984 when the product was first introduced We used the products over the next three years, but changed when better professional products came on the market Our firm pays for site licenses and support We applaud Intuit for designing a product that attempts to protect the creative rights of the software Intuit also allows free processing to those individuals whose tax returns fall under the IRS guidelines

The frustration of the likes of Mr Gregory is very common The record of abuse speaks for itself The good software companys are now in the postion of protecting their assets It makes the growth of the software business attainable If a tax attorney cannot afford the cost of multiple copies or a more professional package, maybe they are in the wrong business.

Posted by: Milt Abramson, CPA on February 13, 2003 11:13 AM

Lost in the pirating controversy is the principle of unspoken agreement between a buyer and seller, as defined by English Common law and virtually destroyed by the Johnnie Cochran-style, technicality laden American court system In my view, the term 'software piracy' is an oxymoron Very few manufacturers have ever delivered quality and reliability as a part of their software releases, and we, the unsuspecting general public, are the victims Software manufacturers are virtually never held to the same expectations standards which are required of other products Instead, these vendors foist upon us what amounts to little more than candy-coated beta code, have the nerve to charge exorbitant fees for 'support,' issue countless patches and updates, then brazenly put us through it all again with the next release

As a professional in the field, I can't even begin to estimate the cost in terms of time and money to my business and those of my clients that bad software has caused The errors and shoddy functionality are of such a ludicrous nature that the products themselves are the butt of endless jokes and Internet gags, and whole websites are devoted to calling out these problems and dealing with them (I have a journal of over 30 issues with Microsoft Word alone - spanning five different Microsoft operating system point releases and four different Office point releases which are *still* unresolved and escalated.)

Conclusion? Installing an additional copy of software on an unlicensed machine may amount to a crime against that unsuspecting new user (ha), but certainly not piracy Only legitimate products and services can be associated with that concept

Posted by: Gregory Winters on February 13, 2003 11:21 AM

Software piracy is a big deal Legitimate customers pay for it, just like we pay for shoplifting at the malls.

Accordingly, I don't mind the antipiracy measures taken by TurboTax (and others) as long as it doesn't impede legitimate use Personally, I haven't run into any problems with TurboTax.

I have a bigger issue with Microsoft's process, however.

I volunteer as the computer guy at a non-profit counseling agency, and operate on a shoestring budget We have a simple 4-computer peer to peer network to share database files.

We use MS Access It's great But every time MS Office is upgraded, the file structure for Access changes If we were to add one additional computer to the network we would be forced to buy not just one copy of Access, but five, to stay compatible across the network.

In the past, we could just buy the one new Access copy for the new computer (to be legally licensed), but load the old version on the new computer We can't do that anymore because each copy of the software must be "activated" as an anti-piracy measure.

Here's the real kicker: Even if we bought the five current copies of Access, we couldn't run them on some of our older (donated) machines, because they don't meet current specifications So adding one computer means buying five new computers (and five new operating systems sold by Microsoft), as well as five copies of Access We're really stuck!

One might say, "It's not Microsoft's problem that our agency can't afford to keep up with technology." We'd be happy to keep using the older version of Access, but we're forced to re-pay for programs we already legitimately license.

Posted by: Perturbed on February 13, 2003 11:26 AM

I think Intuit is overestimating the piracy issue I have used Turbo Tax for years, filing as many as 5 returns per year for members of my immediate family So returns filed versus copies sold is certainly not a reliable measure.

Had I known about their tactics before I purchased Turbo Tax this year, I would have switched to the H&R Block software instead Next year? Well, Intuit can cut their CD production by a least one copy.

And regarding the gentleman's comment about the tax attorney who didn't want to buy a second copy of the program, being able to afford it is not the issue It's getting what you pay for Perhaps the gentleman would like to fork over HIS money to buy duplicate copies for everyone who owns 2 PCs!

Posted by: Bill Black on February 13, 2003 11:37 AM

Dear Mike,

I left TurboTax years ago, when installing the new version (at that time) on my Windows 95 system was too complicated I switched to TaxCut and I just e-filed my 3rd federal return using it Who's afraid of the big, bad Intuit? ;-)

Posted by: Eric Sanders on February 13, 2003 12:40 PM

I used Taxslayer this year and last year I don't have a complicated return, and the software is free They only charged a small fee to file electronically (and the state return was free) There's no reason to spring for something like TurboTax when something quite sufficient is available at little or no cost, and avoid most of the complicated activation and/or licensing issues at the same time.

Posted by: Bob on February 13, 2003 07:51 PM

In an otherwise good report about a interesting incident you missed some details

"Last year, Intuit sold about 8 million copies of TurboTax Yet 15.5 million tax returns were filed with the program."

Intuit collected a fee for every return filed electronically using their software Also, early in Turbo Tax's history the license encouraged people to use their product to help family and friends fill out up to five returns Some may never have noticed the restrictions after Intuit changed the licensing The license, to this day, does not state that only one return can be filed per legally purchased copy

"Industry experts guess that probably 3 million or so purchasers legitimately used the program to also do multiple returns for other family members But a conservative estimate is that 4 million of those 15.5 million returns were done on pirated software, a loss to the company of about $80 million."

Considering that the numbers may in fact be useless guesses, Intuit didn't lose a dime on those 4 million returns What they may not have done is taken in an extra $80 million in profit Accountants may quibble, but to most people a loss means something missing, not a fog of opportunity that may or may not have ever been real What Intuit quite possibly did is pick up new customers who liked the "demo" version - this year What they need to know, and don't seem to care about - yet - is how many current customers won't be purchasing their product next year

If one of the other tax preparation software packages imports prior years data from Turbo Tax 2002, and doesn't burden this user with Intuit's paranoia features, Intuit will have lost me as a customer

By the way, as a repeat customer and subscription purchaser, Intuit gave me a "free" copy of the Britannica 2003 Encyclopedia That retails for a lot more then free Did Intuit lose Britannica umpteen million dollars by giving copies of an encyclopedia away? Or did they provide valuable but cheap advertisement for Britannica?

Posted by: Don Bosman on February 14, 2003 10:16 AM

I have just read your column on the trials of using Turbo-Tax You make statements concerning lost revenues The software and entertainment industries constantly publish staggering numbers related to the cost of "Illegal" software These numbers are used without question by everyone, including you.

The numbers always attempt to quantify the "Illegal" copies and assume everyone who couldn't steal a copy would immediately rush out and buy it The music industry sees a song downloaded and claims one sale was lost Obviously this is false The ratio is not one to one If that song wasn't available on Napster you cant assume the person would buy the CD Only those albums worth $15 to the person are ever purchased Downloading a song here or there cannot be labeled as a lost sale because most of those people would never buy the album anyway They just want a particular song or maybe only want to check out a new artist Buying the whole CD would never be considered In fact, most downloaded music is listened to a couple of times and deleted If it weren't available the person would just do without it The same as before the internet No one ran out buying everything the music industry published then.

The same reasoning applies to your story They claim half the TurboTax forms filed were not purchased legally How many of those people would have bought the program if it weren't free? Some would have gone to H&R Block and some would do it themselves Some would take the information to a friend and let his legal TurboTax do it Some would buy another software package other than TurboTax A very small percentage would have purchased the program So what is the real cost to the company of illegal TurboTax? No one knows, but it sure isn't $80 million like you state How many people got mad over the poor customer relations caused by the copy protection, vowing never to buy it again? No one knows but it is probably more than the lost sales due to copying.

I point these matters out in the hopes you will think about the industry numbers or figures They appear to be misleading or even false Without a doubt illegal copying is a problem that costs the industry money But the numbers they want us to believe are simply not true.

Posted by: Randy on February 14, 2003 11:14 PM

I just finished reading your article.

I've been a user of TurboTax (and MacNTax before that) since the mid to late 80's, but not this year The anti piracy steps make the use of that product way too risky for me.

What would you do if you kept your tax records in TurboTax and were audited in 4 or 5 years I'll agree it's mighty unlikely but I don't like the pot odds (risk/reward) If you don't have the same computer slipping the CD into your new computer won't do you much good Of course Intuit I'm sure will tell you that if that happens just call them up and they will fix it for you Shall I list all the software companies that were around 5 years ago that you can't call today? Big names too.

I sell software for a living I've been torn by the same dilemma, how much am I willing to punish my current good customers to prevent the others from stealing my software Now I'm a small operator, and have no stockholders etc I've decided to go easy on it I know that some of my customers are cheating I know that some folks are pirating it, some morons that pirate it even call me up for tech support ;->

I believe that most people are honorable If they find value in the product, I hope that they are farsighted enough to see that if it isn't worth my time, I'll stop doing it.

Years ago I purchased a software product (the name escapes me now) that had a great anti piracy system In the introduction and installation area of the users manual it had a blurb something like this.

We worked hard to bring this product to you You paid good money for it It's only fair if others want to use it that they too should pay for it So this curse should visit anyone that passes the disk around May the fleas of a thousand mangy camels infest the armpits of anyone that allows this software to be copied.

Not only did their customers get some good software, but a smile as they installed it I know I did.

Gary

Posted by: Gary on February 27, 2003 07:52 PM

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Posted by Enyenihi of Katharine Gibbs School - New York on March 22, 2003