Paying The Price For Proprietary Data Formats

Most small businesses won't notice the impending death of Microsoft Money. Perhaps they should.As of June 30, Microsoft will quit selling its Microsoft Money personal finance software. It will also require users to activate new copies of the software before January 31, 2011. While Money users can keep using the software indefinitely, Microsoft will discontinue all of its related online services, including online bill-pay, as of January, 2013.

According to the Microsoft announcement, it is dropping Money primarily due to competition from "banks, brokerage firms and Web sites," all of which offer a variety of similar personal finance services.

Businesses rarely use Microsoft Money. Even very small businesses typically avoid it, with the possible exception of some SOHO users. So who cares if Microsoft throws Money under a bus?

According to ITWire.com columnist Sam Varghese, there is a very good reason for small businesses to think about the big-picture implications: "Have you ever had the experience of creating and storing data in a certain application, only to find that your dependency on a proprietary format means that you have lost all your data? If you're lucky, you may be able to recreate everything from scratch. But how many people keep hard copies of their personal and business data these days?" Varghese continues: "With a package like Money, new versions take into account the changing laws that govern small business and personal finances and the headache of managing money disappears. But what about your data? Is Microsoft going to offer a package that can translate that data into something that could, perhaps, be used by a package like that put out by Intuit?" He thinks Microsoft is unlikely to give its Money users a parting gift that could ease the transition to Intuit products, or anyone else's financial-management software, for that matter. I think he's right.

Small-business owners rarely have time to ponder these types of questions. They adopt a product that suits their needs and forge ahead. Even if they stop to consider the consequences of getting locked into a proprietary data format, they assume potential problems won't affect them for years -- if they are affected at all.

It's a calculated risk, but it is a risk: Proprietary data formats have always caused problems, and they always will cause problems. The only way to eliminate the risk is to adopt software that uses open, fully documented data formats. That doesn't always mean using open-source software, although in many cases that can be a cost-effective option.

At any rate, consider the benefits of doing a data-format inventory. Consider what types of business data use proprietary formats, and assess the risk of those formats creating data-access or data-migration issues in the future.

You may decide the costs of moving away from proprietary data formats outweigh the benefits. Either way, it certainly beats ignoring the issue and hoping for the best.

UPDATE:

The comment from "Sadien" below makes an excellent point: Any data-format inventory should consider the availability -- and the quality -- of data-export tools for a given format.

Bear in mind, however, that the quality of such tools can vary considerably. Some built-in export tools are truly useful. Others export to comma-separated values (CSV) or other text-based formats that are all but useless for complex documents. Many fall somewhere in between.

When you weigh the effectiveness of a built-in data-export tool, pay close attention to the complexity of the documents involved. So they rely upon complex formatting? Do they work with composite documents that include, for example, embedded images or formulae? These are important questions, and in many cases, the only way to answer them is through old-fashioned trial-and-error testing.