Tuesday, February 10, 2015

MYOB hits back at Xero missive / Xero chief executive Rob Drury accused MYOB and its owner Bain Capital of releasing puffed up customer numbers

David Swan for Australian Business Review writes: MYOB has refuted claims by rival Xero that it’s cooking the books as it prepares for a rumoured float later this year.
Speaking to the Australian Financial Review, Xero chief executive Rob Drury accused MYOB and its owner Bain Capital of releasing puffed up customer numbers, using its 2013 acqusition of New Zealand-based accounting solutions firm BankLink to mislead potential buyers as it prepares for an IPO.
Mr Drury also claimed that Xero had passed $US100 million in annualised revenue and has 400,000 paying customers using its cloud products, while MYOB’s claimed user base of 1.2 million was “dodgy."
MYOB, which currently leads the Australian accounting software market with about 65 to 70 per cent SME share, strenuously denied the claims to Business Spectator.
“MYOB has noted the article in the Australian Financial Review. We strongly refute the aspersions cast upon MYOB by one of its competitors,” the company said in an emailed statement.
"We stand on record that we have continually been robust, transparent and consistent in reporting of our numbers.” 
Xero Australia managing director Chris Ridd told Business Spectator, however, that MYOB needed to be clearer and more upfront.
“MYOB have announced 116,000 customers, but they’re missing part of that, and that’s what does that 116,000 look like? How many are using pure cloud, how many are using hybrid cloud, and how many are accounting based?," he said.
"We suspect a number of those would be previously clients that are paying maintenance or cover that are being moved acrossed to subscription and whether MYOB is also claiming those as cloud wins. So it’s unclear what that represents," he said.

"We’re signing up in Austrlaia over 300 new customers every day and 35 per cent of those are coming from MYOB, so that’s over 100 MYOB customers daily that are heading for the exit doors and heading to Xero. So it’s clear MYOB is losing market share."

MYOB hosted a roadshow in Melbourne yesterday, the first of a 20-leg tour across Australia, and CEO Tim Reed told Business Spectator its cloud subscriber numbers were the company's prime focus.
“It remains a real focal point of ours and something we’re laser focused on executing as well as we possibly can," Mr Reed said in an interview.
"I think that creates challenges and opportunities at the same time. and the two almost go hand in hand. For example we've grown the organisation from 750 to about 1150 over the last couple of years, and hiring the right people and bringing people with the right skills on board remains one of the core focuses and something that I think will really define our success going forward," he said.
"When you're rapidly growing and hiring that many people, you've got to make sure the DNA of the organisation remains bright and they have the skills and capabilities to push you further forward not to create dis-economies of scale."
Reed denied to comment on the speculated MYOB IPO, saying he wouldn’t comment on ownership of the business.