November 21, 2011
I’ve been travelling for the past couple of weeks and haven’t kept up to date with news from the SaaS accounting companies that I usually watch closely. Here’s a summary of stuff that’s happened of late. Quick general disclosure though, I have consulted to a number of the companies below – more information here.
Xero – more customers, more revenue, more hiring
Had its 6 month report that it’s required to make as a publicly listed company. In its report, Xero had some pretty impressive numbers with customers now well over the 50000 mark and revenue up well worldwide. Non-NZ revenue now makes up more than 40% of Xero’s revenue, mainly this comes from Australia and the UK with both over $1M revenue. The rest of the world (which includes the US) is still tiny with only 400K of revenue, but recent attendance at industry events stateside, the relocation of the CTO and the community manager to San Francisco and the soon to be announced appointment of a US managing director will hopefully change that fact.
Xero is still loss-making, but that loss has reduced 27% in this reporting period (from $4.7M to $3.7M). Of course its world-total of 50000 customers is still a drop in the ocean compared to the three incumbents Sage, Intuit and MYOB who between them service around 8 million customers, but Xero’s growth trajectory is what’s important and this is heading in the right direction.
I’m still picking a major funding announcement in the near future to fund what will be an extremely expensive US market entry. In other news, Xero announced the resignation of both its chairman and co-founder Hamish Edwards. Neither of these is a surprise, Chair Phil Norman has led the company through its startup and IPO phase and now hands over to someone else to take the company through its next growth phase. In the case of co-founder Edwards, ever since his return from a posting to the UK I have had questions from Xero partners as to his actual role in the company. While he’s still officially an executive within the company, I suspect his operational role will go the same way as his governance one and fade off into the twilight.
Brightpearl – big name hires and great growth
Brightpearl, the ERP vendor who has a solution that sits nicely between tools like Xero for micro businesses and much broader offerings from the likes of NetSuite has been going gangbusters.
Brightpearl has announced two high-profile executive appointments including Harriet Fletcher from Rackspace as Marketing Director, UK and James Scott, formerly MD of Channel Advisor in EMEA, as a senior consultant on the company’s ecommerce strategy.
Brightpearl is enjoying strong growth and is pushing heavily with its channel sales strategy – something that a product that suits larger businesses than solutions targeted at micro-businesses can do. I’ve said before that Brightpearl is a very promising application, I’d class it as down a rung from Intacct, but really only competing with a product like Saasu to the small and mid sized organization that requires a full breadth of features.
Intacct – awesome channel growth and possible IPO
I’ll be covering some product specific news from Intacct in the next week or two but on the business side Intacct has also been growing strongly. They have 5000 companies using their solution (bear in mind Intacct sells at a much higher price point than products like Xero) and their own VAR program is accounting for 50% of sales (up from 35% last year). This is further proof that a smart channel strategy which sees partners really add value to the core product is a great way to get ahead, even in this disintermediated cloudy world.
CEO Rob Reid has also stated that the company has enough financing to pursue its own IPO but hasn’t offered a specific timetable for this move.
MYOB – New generation platform for a hybrid world
Desktop software vendor MYOB has finally rolled out its new line of products that see it finally move from a completely desktop based provider to a hybrid one. Th new generation of products are the result of a three year development project and moves the product base onto a completely new platform which will allow for hybrid desktop/cloud functionality.
The rebuild sees MYOB moved to a .NET SQL platform which will see it, over time, offer customers an on-premise, cloud or hybrid choice as to where their data is held. Part of the success of this project revolves around the opening up of core APIs and this is one area I’d be excited to see some progress from MYOB on.
QuickBooks – Problematic outages
While Intuit follows its own hybrid approach with the Partner Platform, it also has a full online version of its software. QuickBooks online hasn’t had a good time of it lately with some high profile outages in recent weeks. The really telling part about these problems is that they’ve been recurrent and have happened over multiple days and weeks.
While I believe that the IPP is a more important and valuable cloud play for Intuit, outages on its sister products tarnish the Intuit brand so here’s hoping Intuit can kick things into gear rapidly.
More news coming soon – but suffice it to say that things are looking rosy for the SaaS accounting vendors…