Today I received a press release [ACI Does Not Renew Lighthouseâ„¢ Agreement with Appraisal.comâ„¢ [AppraisalBuzz]]( that announce the termination of the licensing agreement for its Lighthouse product for use with, Day One and Nova users. ACI will provide upgrades for those users to switch to ACI products.

It is curious why this announcement was done as a press release. That seems to be unprecedented.

Its not apparent why this limitation would be trumpeted to the appraisal community unless is was done to sell more upgrades. However, this is only speculation. I don’t know the reasons for the decision besides those publicly stated as being in the best interests of ACI users.

If true, the strategy is quite logical. If Lighthouse was the standard for electronic data transfer for the appraisal industry over the past 7 years as the release says, then it could be advantageous to pull the plug on competitors and peripheral companies as the industry begins to rely exclusively on it and there are few alternatives. Users are forced (or urged with discounts and deadlines) to quickly switchover. One alternative to this prprietary format is the PDF format which is associated with Adobe. Most lenders accept this format and have developed OCR applications to cull key pieces of data from the documents. However, with PDF, the raw data does not stream to the client (which they can use to analyze and give to other appraisers).

I remember when appraisal software began to ramp up 15-20 years ago, some lenders would opt to go with a proprietary format and the appraiser would be forced to use it or lose the client. Appraisers were often running two or three software packages simultaneously. We would decline working for a lender because we did not want to run a particular software package. It seemed to me that the line was crossed when a lender would force me to run a type of software for their convenience since I had many other clients that used different packages. Kinda like, Are you a “Ford” truck owner or a “Chevy” truck owner.

Products like Lighthouse came out and made this practice obsolete but as time has passed, history may be repeating itself as it remains one of the few methods of EDI delivery of appraisal reports.

This situation brings to mind the problems with over-dependence on proprietary formats:

* They require ongoing licensing fees
* Vendors are subject to the whims of the licensor
* Users are eventually afforded fewer market alternatives
* Industries depend on the health of the company that is the primary licensor