Xero Says It's Taking MYOB's Clients As The Accounting Wars Continue

Alex Heber for Business Insider Australia writes: Cloud accounting is becoming a crowded space in Australia and the war between incumbents and up-and-comers is bubbling over.

Fighting for Australia’s small businesses accounts are Xero, MYOB and Quickbooks.

Xero has this week extended its MYOB conversion tool indefinitely after it claims “thousands” of small businesses and accounting partners have used the service since April this year.

Xero now has more than 147,000 Australian customers and in a survey it conducted on users which have signed up since September 2013 it found 67% of those who responded said “they had switched from a rival product, including MYOB”.

MYOB CEO Tim Reed said with accounting software moving off the desktop and into the cloud “it’s a really exciting time”.

MYOB is the biggest player in the Australian market with 1.2 million customers using its software. Of that more than 100,000 customers are using its online system in Australia and New Zealand and 90% of its business comes from Australia.

Reed said he’s unsure where Xero is getting their numbers from: “They’re not coming from our active users, they’re not coming from our paid users. They’re either coming from other software vendors or they’re coming from versions of our software which are more than eight years old, businesses that haven’t upgraded their software in more than eight years.”

“If you’re talking a thousand than… that’s less than 1% of our client base.

“I think it’s challenging to believe that, given the data that we see internally in our business.

“The data that we have in our business would not support that hypothesis.”

When asked why he thinks Xero is singling out MYOB, Reed said it’s part of a broader marketing campaign which he thinks is trying to create the perception that change is under way.

“That’s obviously a campaign that they think is going to be effective, it’s not based on the facts that we’re seeing in our business actually holding up to be taking place but that’s the great thing about competition because people get choice,” he said.

“Our online accounting business is booming.

“The retention we have in our install base is at record highs.”