MYOB ships LiveAccounts, under-cutting Xero
The most popular accounting software company in New Zealand, by customer numbers, has finally made its online move.
Following a project steering committee meeting, MYOB briefed partners last night that LiveAccounts would be launched today (see its official site here).
The battle for the hearts and minds of the nation’s accountants (who form a de facto reseller network for account software) has begun.
LiveAccounts (pictured in the screen grab above) is a SaaS (software-as-a-service) product, meaning it sits not on any given PC, but is used over the internet, through a web browser - the same model as the eponymous product produced by NZX success story Xero.
Cheaper
As previously hinted to NBR, MYOB is trying to under-cut Xero in price.
Like most SaaS software, LiveAccounts is sold by monthly subscription.
MYOB chief executive Tim Reed told NBR that the new product is aimed at sole traders or companies with one to three staff - and it has one price: $25 a month (including GST), including unlimited invoices, and up to 100 statement lines from any automatic bank feed (extra lines are 10 cents each).
Xero’s plan aimed at freelancers and property investors costs $29 (excluding GST) a month for five accounts payable invoices, five accounts receivable invoices and 20 bank statement lines.
A Xero subscription with unlimited invoices and unlimited bank reconciliation, aimed at small to medium businesses, costs $49 (ex GST) a month; a version that adds multi-currency support costs $64 (ex GST). Across all plans, a 25% discount is offered if you subscribe to Xero through more than one organisation.
Both camps offer a 30-day free trial, and unlimited support.
Spin vs spin
MYOB chief executive Tim Reed has told NBR that LiveAccounts is priced to take SaaS to mainstream New Zealand, whereas Xero has been the choice of early-adopting geeks.
The company says there are 325,000 sole traders, many of whom still use paper, or Excel, for every GST return.
With 150,000 New Zealand customers (and 1 million across Australasia), 23,000 of whom already use some kind of MYOB online service, the company is set to steam roll the SaaS market.
From Xero’s perspective, MYOB has had its day. While dominant off-line, it’s late to the SaaS party with a warmed-over, under-featured rehash of a previous attempt to move online, developed by outsourced workers, and bankrolled by private equity owners who are looking to flick off the company.
Mr Drury sees his product as more appealing to everyday Kiwis.
MYOB co-founder Craig Winkler is now a major Xero investor, having ploughed around $20 million of his fortune into the company to make him one of its major stakeholders (along with Rod Drury and Sam Morgan).
Xero founder and chief executive Rod Drury says his product is more full-featured, and his pure-play company unconflicted by any need to protect legacy offline revenue.
Mr Reed snipes that a certain rival, unlike MYOB, has never turned a profit.
Mr Drury says his company is in a growth phrase, and well-funded for years to come thanks to Mr Winkler and Mr Mogan's cash injections. On July 23, Xero said it has 22,000 paying business customers; a break-even result is promised next year.
Comfortable with timetable
MYOB initially indicated LiveAccounts would ship mid-June.
Mr Drury called the delays “embarrassing”.
Speaking to NBR last night, MYOB’s New Zealand general manager, Julian Smith, disagreed that his company would be “relieved” to have LiveAccounts finally in commercial release.
MYOB was comfortable to leave LiveAccounts in its beta (customer trial) phase for as long as the feedback process took, Mr Smith said. There was never an official target release date.
Allies spar
The number of customers on the beta programme had grown to 1300, including accountants, the GM said, and feedback was overwhelmingly positive.
Not every beta customer can be quoted in the ads, however.
In comments on NBR, consultant and entrepreneur Lance Wiggs said “The beta that I saw was primitive at best, had poor usability, and didn't integrate with the offline product.” (MYOB has promised to launch a hybrid online/offline product, called AccountRight, in 2011).
Mr Wiggs and Mr Drury share a historic connection through TradeMe, and both are currently involved with Pacific Fibre. But Mr Wiggs said he had often been critical of Xero in the past - although he’s now a user.
Leaping to MYOB’s defence, Ben Kepes - a tech commentator and principal at Christchurch’s Diversity Ltd, said LiveAccounts “lightweight functionality” was appropriate for its target market (companies with one to three users).
Many less tech savvy users would appreciate the more desktop look and feel. From a brief trial, Mr Kepes found the product worked fine.
However, he did see a problem in that there was no obvious migration path if a company grew beyond a three-person business.
But overall his impression was positive.
Mr Kepes (who has consulted for both MYOB and Xero) noted that a similarly specc’d Canadian SaaS product, FreshBooks, now had 1 million users.
Better for NZ broadband
MYOB’s Mr Reed has readily conceded LiveAccounts is not as full-featured as his company’s desktop software (the chief executive does claim one advantage over its rival, however: an automated credit card transaction feed courtesy of a tie-up with BankLink. Xero promises a similar feature is on the way thanks to a hook up with Yodlee.)
As well as the target-market argument, the Mr Reed told NBR that a pared-down product was best suited to New Zealand relatively modest broadband speeds.
Xero shares (NZX: XRO), which have a 52-week range of $1.30 to $1.69, closed yesterday up 1.31% to $1.55 against a broader market decline of 0.31%.
In mid-morning trading today they were flat at $1.55.
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Comments and questions41
Chris, great roundup. The key question here is whether Xero and Live Accounts really have much overlap in terms of intended market, or (even more interestingly) if Xero decides to bring a down-specced version to market at an even lower price point....
Good times....
Ben, I dont think you can get more down specced than this:
"Xero’s plan aimed at freelancers and property investors costs $29 (excluding GST) a month for five accounts payable invoices, five accounts receivable invoices and 20 bank statement lines."
The obvious upgrade path from Xero and MYOB once companies start t grow is ActionStep, which is a full fledged SaaS-based ERP solution (made in NZ) which has been doing accounting online long before Xero and MYOB.
you guys in the IT media have an unhealthy, biased relationship with Drury. You've probably dedicated 25% of this column to a comparison with Xero and response from Drury - This is a MYOB product announcement not a Xero ad placement.
Why bother dragging in Drury - yet again - to comment. I guess when a guy like Drury courts the media as he does, we can expect you guys to give him unsolicited and unwarranted coverage.
Could you be any further in Drury's back pocket ?
[NBR's run a number of MYOB-focussed articles - http://www.nbr.co.nz/search/apachesolr_search/myob. As ever, the focus is on covering whovever's making news. - Editor]
Why haven't NBR gone to the Actionstep CEO for comment on this MYOB announcement - I guess because the ActionStep CEO hasn't regularly invited media around for drinks.
$29 or $25 a month to run a browser version sounds cheap compared to a few hundred to buy the software outright, but that $25 turns into $300 in just one year, or $1,500 in 5 years. Either approach is tax deductible. Now factor in a portion of your internet access and data plan costs. A bit of training maybe, some enhanced features at increased monthly charges; say $69 x 12 months = $828 x 5years = $4,140. And it doesn't stop. Ever.
Whose done a decent TCO, or TEV analysis on buy versus rent?
Eyes Wide Shut.
Will be tough for Xero to fight a price war. They have a great product but MYOB has the resources to copy it, and bring it out at a lower price, and ride out a price war. It will now be hard for Xero to grow market share where MYOB is dominant.
I'm using Xero and loving it.
But would be so much better if it worked on the iPad a bit better so I can do this stuff "on the run".
5 accounts! You could do that with a crayon for free!
I was a user of MYOB in the past, both as an accountant and with my currents businesses. 18 Months ago I switched my businesses over to Xero and I have not looked back.
The software is so intuitive and saves me a heap of time. I can now focus on progressing my businesses, rather than spending several hours a week keeping my books in order.
I would never go back to clunky MYOB's boxed versions and I highly doubt that an MYOB SaaS version would be any better. They have a culture focused on increasing revenue from their support team.
Yes I am on of the "early-adopting geeks", but I predict the mainstream will head in Xero's direction
I rather like my NZ built Moneyworks - minor upgrade costs only, much easier than MYOB to use.
I suggest you get your buggy whip out, jump on your pony and go down to the bank where you can get the bank teller to show you his ledger of your accounts. Or perhaps you can just tap on your iPhone and check out internet banking. It uses a thing called the Internet, and you can even pay accounts. OK it will cost you a monthly fee for both the phone and the internet, and it will go on forever, but hey, surely you could offset that on the price of oats and cleaning up after the pony.
MYOB can afford to keep undercutting the Xero price because unlike Xero they have other irons in the fire. I guess their plan is to freeze the buying decisions until they can build in all the features they need.
Maybe Rod had price in mind when he names the company Xero :!
I don't think MYOB will ever be able to keep up with Xero. From my experience as a customer of Xero their product is living. It changes in response to customer feedback and continuously improves. Their company is built around facilitating this process. It wouldn't be possible to compete by outsourcing development in my opinion.
Having been a business owner since 1992 and used NZA Gold, Aurora, MYOB and Xero - Xero wins hands down - not only because the product is built for the end user very much in mind but it's also written in plain english - novel approach!! Xero's support is also a million miles ahead of any other competitor .....Xero really are in the business to help the end user - go figure? Rod Drury is interesting because of the work he's doing hence the coverage - hands up anyone who has seen the head honcho of MYOB like ever? I have never experienced a call from a live person from MYOB? Xero has leadership & horsepower - Rod, Sam Morgan, Craig Winkler and the team - and Xero communicates with us end users - I know I said that already BUT it is so true. So we'll see how things go but we customers are not stupid and we will buy from an organisation that have customer service and communication as a priority - surprise!!??
Clouddude, my pony and I checked out internet banking; apparently it's free, so thanks for your suggestion. SaaS however is not free; that's my point, and in time it costs more than fully featured mature boxware. I see no TCO debate, why is that?
Anyway, now my pony's puffed cos we had to trot the buggy around to buy an iPod and a PC, an intent connection, and a data plan too, so I spent this years chaff money on all that. Now I don't have enough money to get trained, I have a monthly SaaS et al rent bill and the pony is getting thinner by the minute.
EWS you must let me know who your bank is providing free Internet banking. We are talking business banking here, right!. I think the bank may be down the road from their airline (aeroflot) or up the road from their presidents house at the Kremlin.
Be kind to that pony
Eyes Wide Shut, there is a TCO debate about to get started. Gartner Research just released findings that cloud based applications are not actually cost savers. There may be other benefits of SaaS, but cost is not one of them.
http://blogs.gartner.com/michael_maoz/2010/07/25/cloud-based-crm-applications-are-not-cost-savers/
Oh and on the debate between MYOB live & Xero I look forward to reading an independent functionality & value for money review before making my mind up.
Glenn, you are so right. All Drury has done is enrich himself through the NZ investing public and Craig Winkler - Drury is now on rich list. Xero is a not a "success story" but a small player with a tiny client base, accumulated losses of $30million, not really what most folk would call a success story. All we ever hear from the IT media is Drury this and Drury that. No wonder he decided to raise capital through NZX. How else could he have funded his self promoting publicity machine? The real heroes and successes of IT in NZ are the Datacoms, Taits, Endaces, Makos, BankLinks etc who are too busy earning export dollars to concern themselves with courting the media.
I think the media listens to Rod bc he always has something worthwhile to say. And he uses the media to get results for everyone, not just himself. We have seen it first hand here in Hawke's Bay with Air NZ finally doing something about the ridiculous prices of flights in and out of Napier. As for Xero being for early-adopting geeks - that's BS. You didn't have to be a rocket scientist to see that SaaS and Xero was better than anything MYOB was offering and you couldn't get a more user-friendly, intuitive software program. Not only that but it is regularly updated and the support is awesome (which I will happily pay a higher subscription fee for). I mean look at that screenshot of the dashboard!! It is so '80's compared to the Xero user interface. MYOB, you have missed the boat dudes, and now you just look like you're playing catch-up.
There's a reason Ford and Holden have spent years fueling their rivalry - it's great for both brands. Neither player will lose here as it will just increase awareness of online accounting. Only one offers the opportunity though to participate in the growth....
5 years ago our accounting practice was almost exclusively MYOB. Back then, their lack of service and aging product were really wearing thin. Viva la Revolution! Xero have been a breath of fresh air - service, usability, positivity.
Clients, staff and the hands on users wouldn't go back to MYOB now even if you threw in the pony ;)
But hey - plenty of room in the sand-pit.
Just try to sign-up using Google Chrome and you get a Browser Not Supported page:
https://secure.liveaccounts.co.nz/LA/Error/BrowserCheckFailed.aspx
That's quite scary if not to say pathetic.
Well done MYOB.
Gigi.
Drury would probably be a bit more convincing if he spent less time sniping and more on communicating the points of difference his solution presents to the market. His team must surely cringe! Me thinks he's a worried man. So what are Sam and Craig if they're not VC's??
Firstly, Chris has fallen for MYOB's marketing the most popular Accounting Software in NZ is BankLink significantly more businesses in NZ use this software whether they realise it or not. It makes me laugh how everyone is so focussed on MYOB v Xero there are lots of other online solutions available, many more featured then either of these options...
I signed my business up for the testing/beta of Live Accounts a few months back. It's just myself and my wife who look after our business and we find it to be quite good. We were even asked personally from Myob staff about what can be improved in our opinion. I like it. I haven't tried Xero, but this works pretty well for us. If the level of participation we've experienced is anything to go by, then the more people who join up, the more improvements myob are clearly willing and able to make.
I have used MYOB for many years and hated every minute of it, its old clunky and hard to use. The amount of time I had to invest on a daily basis was rediculous. Its expensive, support is expensive, updates are expensive, and they just dont give a frick about their customers. Its all about money. My accountants pay endless amounts to them which in turn makes my bill higher. Xero is simple, its affordable. No IT overheads (im an IT consultant) backups are done automatically, you dont need to share over a network, its all internet based and anyone with inet connection can use it. Unlimited users(myob 600 bucks for a new user), easy support when you get stuck from xero, the list goes on. Also love the auto bank feeds, ive never been upto date with gst EVER! Now its done daily and i know how much i owe, takes me 2-3 minutes to code my transactions.
Anyway moving on, MYOB live accounts, very poor attempt. We tried out yesterday (both me and accountant) its CRAP! At least Xero designed and built their own system, MYOB is losing market share so just tries to copy XERO. Go and compare, you will see the similarities. In saying that, it does not compare, functionality will rule, price has no comparison because the product is no where as good. You could compare it to ASB's brilliant online banking to Westpac or ANZ 5 years ago. Way behind the times.
try Xero, your business will grow and you will make more money, just by analyzing everything daily. Our business revenue has increased by 33% just because we know our daily goals and can keep an eye on them to increase.
Try it
Hey Everyone,
Did you hear? MYOB is charging users $600 + GST to upgrade their pathetic Accounts Software so that it can accomodate the gst changes?
Xero just got another 5 companies. I should buy shares.
Dear Anonymous
I’d like to correct you post about MYOB GST upgrade pricing. We have more than 50 products and services at MYOB. Upgrade pricing for our very popular solutions like MYOB Cashbook and MYOB BusinessBasics start at $99+ GST. The price you mentioned is for one of our top Accounting solution for larger SMEs that also includes full payroll function with comprehensive GST, PAYE, ACC and employer super updates (you can pay hundreds of staff using it). As you mention that product also allows you to run a minimum of 5 company general ledgers from the one solution. We endeavour to provide our clients with lots of choice with a broad range of solutions at varying price points.
Kind regards
Julian Smith
General Manager – NZ
MYOB
Hey - the reality is that MYOB is tried, tested and rock solid in terms of it's financial stability. That means a lot when I'm relying on my suppliers.
MYOB's development is funded on the profitability of their business - not top-ups from overly generous VC's.
My bet's on MYOB being here a lot longer than Xero.
MYOB continue to build on their solid track record, provide the customer experience that has earned them awards, and will still be around in years to come.
In the meantime Rod, continue to round up your herd of cats and I'm sure their claws will do the talking that your solution can't.
Back to my earlier point.... focus on what matters to your shareholders Rod. Best you start to think about how your solution is going to continue to maintain the development path you've set (along with customer expectations) when the currently generous VC's run out of patience. Next years profit date is coming along real fast!
What a load of dribble! I can't believe the rot that spewing forth from some of Rods paid up team.
So now Xero is your CRM.
Xero has magically sorted out your useless sales team.
Xero has provided you with the nous to know what business you should be focused on to drive revenue (because you obviously don't).
Xero has all by itself delivered you 33% growth???
How many years have you been in business? And you're blaming MYOB for loosing you 33% opportunity and revenue?
your points speak more to your own ineptitude than to Xero's heroic rescue.
Time to shut them down Rod before they take what little credibility you have left.
Daily bankfeeds are great and I'm looking forward to the day when someone sorts out all the credit cards and all the Fonterra/stock agent transactions to do the same thing - this would be very worthwhile for our many farmers.
All the options have issues. I'm not sure that MYOB Live would work out real cheap when the $25 only includes 100 transactions per month. By the same token, Xero's smallest option is so small that I can't imagine any possible use for it at all. And in my opinion, their middle-sized option is priced too high.
I don't agree that Xero's interface is great at the moment. Clients find it a bit clunky to find their way around - the interface successfully hides published reports in the darkest corner, and things are too spread out - there's a lot of scrolling required. On the other hand, while MYOB AO is pretty good, MYOB's business packages are hideous and not at all client-friendly. Cash manager is better.
What I would like is Xero/Acclipse/Banklink/Myob losing all the hyperbole in their documents/materials. I'm not sending my clients literature that addresses them like idiots.
My philosophy is 'anything but MYOB'. We used if for about 10 years before dumping it and moving to Moneyworks due to the incredible complexity of MYOB (once you get past a very small business MYOB is absolutely hopeless, its jobs for example are a joke) and its unbelievable slowness. Admittedly we still use MYOB for payroll and on this front it's pretty good these days but I can see that once a good Australian SaaS payroll comes along we'll probably move there too.
Back to accounting, I have to say that Moneyworks is a fantastic program but I can see the advantages in moving to SaaS for our accounts and I'm going to give Xero a spin in September to see how it performs.
Richard, Try Saasu.com its a fantasic online accounting system complete with an integrated payroll for half the price of xero!
After using MYOB for a number of years I felt a change was needed as processing my accounts were becoming a painful process I explored a number of alternatives & decided on giving Xero a try and I'm happy to say I was not disappointed, Infact it has! grown my business as its enabled me to spend more time on the hands on business tasks & less of the accounts.
From what Ive seen from the Demo of LiveAccounts it is miles behind the polished product Xero is, but competition is also good for the customer & it appears Xero will be pushing through a number of enhancements in features & usability to stay ahead of the rest
Hi Anonymous,
had a look at saasu, and it looks fine for an Australian product. That's half the problem though as I'm not looking for an Australian only product.
Hi Richard
Its not an Australian only product it is actually used in 50 countries around the world and with NZ specific bank feeds coming in the next month.
ok thanks Anon, I'll have a better look at it.
I just downloaded the free trial, imported contacts and attempted an invoice only to find that there is no option for a Service invoice so there's no way I'll be able to use it. Anyone out there from MYOB please feel free to point me in the right direction if I'm wrong. It just seems a bit weird that the type of business I entered o setup was Consultancy and as we need to provise detailed explanations of what clients are being billed for, that a service type invoice was not included.
This is a great article which gives both sides' views on each others products.
Although I think very highly of Xero, it's pricing is too high for the small user (and their lowest plan too limited to be useful) I think MYOB will see a lot more businesses making the switch to online accounting and in-turn could even indirectly compliment Xero by increasing the credibility of online accounting and user base.
I think this new LiveAccount holds a lot of promise. However, it has to go through usability testing before it can be fully accepted. Even though it might be cheaper than Xero, what is most important is that it is able to deliver a good experience for accounts, and that the value for money is backed with quality of software.
usability testing
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