The Path to the Cloud is Paved…. With Jagged Rocks…

It’s always interesting to watch companies looking to move from their “traditional” approach of software delivery to living in the cloud. One company I’ve had a first hand glimpse of making that shift is MYOB (see disclosure). In its home market of Australia and New Zealand, MYOB is facing a small, but growing, and increasingly difficult to ignore challenge from Xero.

In an effort to mitigate this threat, MYOB has been working on a multi year (and multi million dollar) project that sees it move from a desktop-centric vendor to one that looks more like a hybrid provider. One of the steps in that process has been to move the software from it’s old database approach to one based on MySQL and hence more able to play in a “cloudy world”.

But one of the things about moving a software platform, and a business, to the cloud is that two distinct barriers are in the way;

  1. Moving millions of lines of existing code to a new platform, while still maintaining backwards compatibility and not breaking everything is an incredibly hard job. There’s a reason why the most successful SaaS businesses are ones that had no legacy products to move
  2. Cloud is bout much more than a technology shift, in fact the biggest part of cloud is that it democratizes, consumerizes and commoditizes technology. That’s a very difficult thing to face for a vendor that has been used to license fees and annual maintenance contracts

So it was interesting o see the response that MYOB got to its initial attempt to migrate its core accounting product, AccountRight. Alas it hasn’t been plain sailing – with issues arising of both a technical nature and a business one.

Platform shifts are hard

Users are complaining vociferously about performance issues with the new products saying that they’re buggy and slow with unusual requirements put on users (the need for QuickTime for example, strange in a world that’s all about web standards). In their defence MYOB are being forced to support, almost on a case by case basis, individual machines with particular software and hardware issues. Which brings us around to one of the benefits of a true web app – so long as the browser a user has is supported – that should be the sum total of the potential issue list.

True Xero does require users to have Flash installed – but they’ve promised (for awhile now it must be said) to move off Flash onto something that is more preformant and more importantly native within the browser (HTML5 anyone?).

People expect consistency from an existing player

One subject of complaint from MYOB users is that with the new package, only one business entity is allowed per license. As a little background, in the past there was no barrier to multiple entities being run with one software license. While it is undeniable that Xero and all the other vendors charge  separate subscription for each business entity, the key thing here is perception. Companies have grown accustomed to running multiple entities with one MYOB license and when this is no longer available, another of their existing ties to the incumbent provider is lost.

3 Comments
  • Hi Ben,

    As I understand, only the desktop version of the product has been released, and the issues that you mention (performance, bugs, etc) relate to the desktop product, not the cloud version of AccountRight. That said, it obviously doesn’t bode well for the cloud version.

    Also I understand the desktop database is MS SQL CE and the cloud database is SQL Azure, not MySQL.

    Regards,
    Paul

  • Paul Lattimore |

    Happy New Year Ben.

    This is like watching a race where only one car is on the track, and the other teams are still working out which tyres to use.

  • There are two other prominent advantages Xero has, the first being no legacy of archaic software patched to the nth degree over decades. As developers having to work with MYOB we find it very difficult to work with MYOB’s ‘brand’ of SQL query logic. Writing to their data file through ODBC simiarly archaic – why would you want to move that to the cloud?
    Secondly, Xero has embraced new technologies, willing to take on modern techniques, unencumbered by what appers to be ‘old school’ thinking, absurd decisions such as dropping development of any API. Requiring developers to, eventually, write to the data file through ODBC – unbelievable in the year 2012.

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