Xero shares take a hit (BULL!), Intuit is doomed

Mike Block for Quickbooks-blog writes: The occasional completely wrong stories about Xero’s stock price keep amazing me. Here is a January 2013 prediction of doom (Xero Shares take a hit):

OPINION: Xero shares threatened to break through the $15
barrier this morning before suddenly crashing in what looked
like it could be the start of a major market correction. Shares
in the online accounting company plummeted $1.40 to $13.50.

Actually, this would have been a terrific time to buy Xero. Anyone who bets against Xero is almost sure to lose big. As of 9/8/13, Xero was $18 NZ$ ($2.1 billion market cap). Thousands of CPAs, Chartered Accountants and bookkeepers will be attending sold out four-day shows in Auckland, Sydney, San Francisco and London by the end of September. Everyone at the San Francisco show was sure Xero was much better than QuickBooks, Quicken or anything else in the small and medium business area, despite near hysterical Intuit actions.

Due to incredible new features Xero adds, every few weeks, at low or no cost, we all wanted to switch some or many accounts fast. One group included a CPA firm that consulted with 70% of the 100 largest CPA firms in five years. A second group has long been the best QuickBooks national teacher of CPAs. Both sound like they will soon move many clients to Xero. We also have a very fast growing list of inexpensive and powerful add-ons. They use free industry-standard RESTful interfaces, which keep getting better, making Xero the ideal choice for small and large companies. To the ontrary,

Intuit has a market cap of around $19 billion. I see no reason why Xero may not soon pass that. Their technology is comparatively far more disruptive and compelling than the comparable technology that Intuit had when it quickly killed 46 competitors in 1983. This time the rapid switch also will relate to the many senior CPAs who will never forget QuickBooks and TurboTax ads saying users did not need accountants, plus many sales and other policies that badly damaged CPA - client relationships. To the contrary, Xero continuously emphasizes its commitments to CPAs, Chartered Accountants and professional bookkeepers, who will eagerly reciprocate. We also will keep spreading the word from the ex-manager of Intuit’s ProAdvisor program, who now works for Xero precisely because of the way Intuit kept bypassing CPAs.

Do not think, however, that this relates to CPAs and other accounting professionals leading clients to Xero. In fact, the ratio of Xero users to Xero Partners is far higher than the comparable ratio of QuickBooks users to QuickBooks ProAdvisors. It also is far better for investors, because CPAs must learn what users want Therefore, Xero is far better for accounting professionals for this alone. Moreover, knowledgeable QuickBooks CPAs know how Intuit has long been damaging users and us by giving away QuickBooks ProAdvisor titles without tests (cost - $1/BILLION/year). There also are now many current and former top Intuit employees and CPAs, who would like nothing better than to get even.

Finally, Xero also already has enthusiastic users all over the world, while Intuit never had much more than a U.S. play. All this relates to why I now feel Intuit is doomed.