Thursday, 11 December 2014 19:54

MYOB again questions rival Xero’s customer claims Featured

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The numbers game continues unabated in the hotly contested cloud accounting software market, with the two major players – MYOB and Xero – in a battle for market supremacy and a share of voice, in the ANZ regional market.

MYOB CEO Tim Reed has once again questioned the reported customer numbers of fast growing rival Xero, saying claimed customer numbers released today by Xero, are not directly comparable to MYOB's customer base.

Xero (ASX:XRO) today reported that another customer milestone had been reached, with over 400,000 small businesses now operating on its cloud accounting software platform.

"They include practice ledgers used by accountants and not available to SMEs," Reed says, reiterating what he said in October when Xero last released customer numbers – “they are simply non-paying customers of accountants using Xero”.

Reed also cites a Macquarie research paper published in July this year which he says estimated that 50-60% of Xero’s reported ledgers are business ledgers, comparable to the MYOB cloud solutions.

Regardless of Xero’s claimed customer acquisitions, Reed is bullish about MYOB’s performance and its market leadership position.

“Following our half yearly results where we announced a record performance for MYOB, we shared achievement of rapid growth to 100,000 cloud accounting subscribers within two years of launch of our flagship AccountRight cloud accounting solution, and we have been growing rapidly since we made that announcement in September,” Reed says today.

“Our growth since end June has been significant and we are still very confident of our position, even taking into account Xero’s announcement on cloud numbers made today.”

In its statement today on global customer numbers, Xero doesn’t give a breakdown of how many of the 400,000 are Australian and New Zealand customers, although it did say in October it had more than 158,000 Australian customers.

But, Xero Chairman Rod Drury, is bullish about his company’s performance saying today it now has a “critical mass of customers and data, in size and volume, required to build a global financial platform”.

“Through a constant innovation cycle we are fulfilling our potential as a small business growth engine, bringing together crucial capabilities in accounting, payroll and payments with insights and the business specific applications small businesses need from our hundreds of partners worldwide.”

Drury goes on to say that “support from both customers and partners is both humbling and exciting. Together we’ve established Xero as one of the leading platforms on which they connect, collaborate and conduct their business”.

On the back of his comment that Xero now has a critical mass of customers and data, in size and volume, Drury says the company is utilising the more than half a petabyte of data collected to report business performance “at scale and deliver insights designed to help improve the growth of small businesses”.

“Xero’s real-time data-set provides clear signals such as to the power of the small business economy in youth employment and job creation - and trends such as growing self and part-time employment.”

According to Drury, Xero is continuously improving with over 400 customer facing releases deployed during 2014, with most of these releases, “often unnoticed by customers, span small business tasks ranging from payroll through beautiful business reporting”.

Drury also flags that in the next week Xero will unveil a new business dashboard to help small businesses to have better visibility of their cash flow, as it begins its delivery of ‘Big Data for Small Business’ in early 2015.

Drury also says today that Xero has grown its team by 70% to over 1,000 this year, building capability for further innovation in 2015.

“Our momentum is not only a clear vote for platforms born and bred in the Cloud, but also optimised for mobile devices. In the past 12 months, over 145,000 small businesses have downloaded Xero Touch enabling them to pay, invoice and manage cash flow anyplace, anytime”.

Drury does say that the small business cloud market is still in its infancy, and that of the addressable market of hundreds of millions of small businesses, only a small percentage currently use cloud financial software.

“This is supported by the growth of critical Cloud technology including over 500 servers managing approximately 500TB of production data while maintaining best in class uptime of 99.99%.

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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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