MYOB hopes hiring blitz will help fend off Xero

Agnes S King for the Australian Financial Review writes:  Home-grown accounting software maker MYOB is in the throes of a hiring frenzy, adding new recruits at the rate of one a day as it gears up to defend its patch against rivals and release two new products.

The company, owned by United States venture capital group Bain ­Capital, has added 55 new full-time sales and support staff in Australia since December, and 25 contractors in its software development team.

“We want to improve the sales ­channel across the entire breadth of clients,” said Adam Ferguson, general manager of MYOB’s accountants division, which generated nearly half of the company’s $116 million gross income for the six months to June 30, 2013.

He said the company still has between 15 and 20 open positions, spanning product trainers, marketing and support staff, and software developers.

MYOB will launch a beta version of an online accounting software package for micro businesses in February. ­Pricing will be announced at MYOB’s roadshow in Auckland on February 11.

The company will also release a mobile version of its practice management software in March, allowing accountants to access core time billing, contact management and reporting systems from any where at any time.

MYOB hopes the ramp up slows the aggressive customer acquisition of ­relative newcomer and sharemarket darling Xero, which claimed in November to be signing 30 to 40 new accountants and bookkeepers a week to use its cloud-based accounting software.

“We need to stay at the front, to act like leaders,” said MYOB chief executive Tim Reed.

STATUS QUO DISRUPTED

Accountants started complaining about the sluggish speed of Xero’s software towards the end of 2013.

Xero ­Australia managing director Chris Ridd said he was not aware of any performance issues.

Xero did a complete upgrade of its infrastructure at the start of 2013. “I can assure you we’ve plenty of headroom in our architecture,” said Mr Ridd. “We’re constantly assessing scalability.”

The transition from desktop to cloud-based software accessible through a utility model, such as ­electricity drawn from a power socket, has disrupted the status quo in accounting software.

US software giant Intuit has designs on the Australian small and medium business accounting market, having parted ways with its long-time Australian distributor Reckon.

Intuit has upped its spend on Google AdWords and is rumoured to be bedding down a public relations campaign to roll-out in the first quarter of 2014.

CCH, a division of listed Dutch corporate information and software ­publisher Wolters Kluwer, also upped the ante last year, striking new alliances and attempting to claim a greater share of accountants’ wallets with the launch of a new practice management product.

Meanwhile, the fate of Reckon and its substantial install base hangs in the balance. Reckon can no longer use the Quicken brand (Intuit owns the rights) and its cloud solution – expected to be released last November – is still in beta.

RISKS OF RAPID EXPANSION

Reckon chief executive Clive Rabie said the company “has completely reinvented itself in the last year, with a new management team and new organisational structure”.

“Reckon is primed to execute fully on [its] cloud strategy in 2014,” said Mr Rabie.

Accountants are central to the battle for supremacy. Roughly 70 per cent of all accounting software sales are ­influenced by accountants’ ­recommendations.

MYOB’s board is acutely aware of the risk in such rapid expansion. Its ­Australian headcount, including new additions, will exceed 750.

However, doing nothing constitutes a bigger threat, Mr Reed said.

“I’d rather be sitting on this side of that equation than one where the market moves elsewhere,” said Mr Reed.