While the global credit crunch has most weeping into their Weetbix, Xero founder Rod Drury sees a world of opportunity.
Speaking from San Jose, then London, during a whirlwind tour, Drury sees some serious revenue potential. It’s not just the jet lag pills talking.

Rather, the Wellington-based entrepreneur is picking that companies’ keener need for cash flow and expense control will see them cutting back in many areas, but not finance and accounting software – specifically, Xero’s, whose online-only, software-as-a-service (SaaS) model operates on modest monthly fees rather than the industry norm of a single, big-hit annual licensing fee.

Drury sees the stars aligning in other directions, too. IT industry leaders like Microsoft CEO Steve Ballmer are suddenly talking up the SaaS-friendly notion of cloud computing or most processing taking place over the internet. It seems the company’s October 27 pow-wow in LA, already slated as the launchpad for Windows 7, will also see details of a new Cloud edition of Microsoft’s OS.

Ballmer and others (some of whom have occupied this territory for quite some time before the Microsoft CEO set up sticks) are talking up $US150 PCs, with all your applications, and all the grunt needed to power them, sits on the net.

Along the same lines, Drury's keeping a close eye on Google's Chrome browser, and it's ability to host Java apps as a web OS, while as the same time working closely with Microsoft on its "Live" SaaS initiative. For Drury, that’s all good news.

Similarly, lots of managers being laid off means lots of “consultants” starting small businesses needing Xero.

And lots of banks scratching for revenue equals lots of potential partners as Drury ignores traditional reseller routes for his software. He says Xero was “transformed” in New Zealand once the major banks all started offering feeds. In Australia, two major banks will offer feeds from mid-October, establishing Xero’s first major beachhead across the Tasman, where Xero was officially launched September 30.

London banks – larger, more conservative, slower-moving – are proving more difficult to crack, Drury says.

Following his direct assaults on the Australasia and the UK – all markets he’s immediately familiar with – Drury plans a more diffuse approach. A “global” version of Xero will be released over the web, with a tax module that can be adapted for different countries. Territories that show the most interest from the generally-available download will become Xero’s next targets.

Drury sees developing markets as a particular opportunity. Just as many emerging markets are skipping evolution to fixed lines altogether – skipping straight to cellular – he sees companies in India, and possibly parts of South America, skipping shrinkwrapped software to work their finances via SaaS.

The market is buying into Drury’s pugnacious optimism. While tech stocks of all colours have been slammed, all around the world, by the stock market crisis, Xero, while still trading beneath its $1 issue price, has risen from $0.75 at the start of October to $0.85 today (October 9), while others have fallen around their ears.

As Drury sees it, the only way is up. "Most New Zealanders have yet to grasp what a huge global opportunity this is," he says, referring to SaaS's rapid evolution. "Things are moving very, very quickly."