A few years ago we all used to cheer madly when Xero announced the release of features such as Quotes or Stocked Inventory, but XeroCon last week clearly flagged that: the product was moving from the mundane to the magical, that there are now no boundaries, that Xero has truly reached the ‘end of the beginning’ and is strategically poised to realise the dreams of CEO and founder, Rod Drury as it moves to Cloud 2.0.
There were the usual statistics which dazzle with both depth and breadth – just a few:
- 74,000 users were invited into Xero last month.
- 1,400 product updates were released in the past year.
- 194 files per minute were being migrated to the new Amazon Web Services platform
- 500+ Apps now connected to Xero.
- There had been over $1 trillion across more than 450 million incoming and outgoing transactions in the past year processed through Xero.
And there were the usual announcement relating to new features in the core accounting software that will make for a happier existence for many users – including:
- Standard date pickers in reports
- Auto balancing journals
- Fixed asset pools and tax reporting
- Copying of key data including chart of accounts and bank rules to a new file
- Auto populating Contact data with real time links from Veda
- Prompt payment discounts on customer invoices
- Streamlined management of PayPal fees
This complements releases during the year with new reports and new features including customisable columns and report codes.
However the jewel in the crown from a functionality perspective was the unveiling of Xero HQ – an open practice platform for accountants and bookkeepers. Scheduled for release in November, this product is designed as the next generation partner tool for the advisor with a home page providing access to anything and everything required by the practice.
The main features include:
- Single Client List
- Activity Feeds to collate to do lists for client services
- Explorer – the pivot table of client data – Xray vision
The breadth of the application is quite startling, it will enable advisors to be proactive in both managing existing clients with a complete range of analytics and insights as well as marketing to new clients. With a single platform for practice manager, tax and work paper, it will bring new efficiencies to the modern practice. Xero is strongly demonstrating its commitment to the single ledger concept by providing an unparalleled experience for its accountants and bookkeepers. This surely has to be the icing on the cake.
But wait – there is more excitement. In his keynote address Rod Drury outlined the strategic significance of Xero’s move from the Cloud 1.0 hosting environment for its servers to the Amazon Web Services platform. The new environment provides all in one place:
- A multi tenanted relational database.
- An elastic data centre.
- Big data.
Xero is now able to access a range of artificial intelligence and machine learning tools which will drive greater automation for customers. Machine learning requires large amounts of data to identify patterns and validate algorithms, Xero now has access to that critical data mass and we can expect to see mass automation and high value insights – a true Cloud 2.0 experience
Xero might just have pulled the rabbit out of the hat here as many smaller competitors do not have these volumes and may struggle to develop and utilise these self-learning algorithms.
In its quest to forge ahead of its competitors, Xero does enjoy a couple of unique advantages. Firstly it is a single product company – all it has to do is deliver a memorable cloud experience to small business owners and accounting professionals. Other cloud accounting software suppliers such as MYOB and Reckon have to support a range of other products across diverse markets resulting in internal competition for R&D dollars and company focus. Secondly Xero isn’t unduly by shackled by share price and investors – investors are not there for dividends and profits, they have signed up for the long haul and focus on strategic development and the non-financial metrics which Xero loves to deliver. The year on year growth in operating revenue and paying subscribers provide the necessary proof that Xero is on the right path (although net losses also grow year on year as Xero maintains its investment in scaling its global business) This situation enables the dream and the magic to come to maturity and that is the dividend the shareholders and investors receive.
Next month I head to San Jose for the annual QBConnect – the conference for all things QuickBoooks. Whilst I don’t expect to run into Brad Smith on his skateboard in the break out area, I am hoping there will be some similar excitement there – so watch the space.