KPMG, Microsoft and CBA team up to take on Xero and MYOB
Xero and MYOB, which dominate the Australasian market for small business accounting software, face a new challenge.
ASB Bank parent CBA, KPMG and Microsoft say they will launch a new cloud accounting service in July called “Wiise,” which will target small-to-medium businesses.
Wiise (yes, there are two “i's”) will be most squarely in competition with MYOB, which targets small businesses. Xero targets small business and sole traders.
They have formed an eponymous joint venture to push the new service, which will act as a standalone company and be based at a trendy fintech hub in Sydney. Wiise is owned by KPMG, with Microsoft and CBA as strategic partners.
Its service will be priced from $A70 ($73) a month. Xero costs from $27.50 to $70 per month, depending on options; while MYOB is priced from $30 to $90.
The sales pitch from CBA, KPMG and Microsoft is that Wiise will give small businesses access to artificial intelligence and voice technologies developed for larger companies (Xero has also recently been on a big AI push; see clip below).
Wiise will be open to members of any bank but CBA customers will get extra features including invoicing and payment services and, in future, working capital and other financing options.
KPMG says is targeting SMEs that have “outgrown” their existing cloud accounting solution or who want everything in one place. Integration with Microsoft's Office 365 is used as a selling point.
Ironically, the advent of Wiise means Xero’s new chief executive will be up against his former employer. Steve Vamos was previously country manager for Microsoft Australia.
Xero downplays development
Xero brushed aside the new competition when approached by NBR.
"Xero operates in a completely different area of the market from Wiise, working directly with small businesses and accounting partners," the managing director of Australia & Asia, Trent Innes, said.
"Wiise is targeted at larger businesses with complex requirements and we don't expect it to have an impact on Xero."
Behind the scenes, it's easy to imagine that Xero is less than thrilled that KPMG (named a Xero Platinium Partner in 2014) will shortly be offering an alternative solution for SMEs.
MYOB did not immediately reply to a request for comment.
Heading for NZ?
And the CBA-owned ASB has been historically close to Xero, with the pair collaborating on a number of initiatives.
And it seems Wiise won't disrupt their relationship any month soon.
A spokeswoman for ASB says: “Wiise currently just integrates with CBA systems so there are no plans to introduce it into New Zealand at the moment.”
However, it's likely that the moment will eventually come.
Microsoft and KPMG say that, if the Australian pilot is successful, they plan to roll out Wiise worldwide with a variety of partner banks.
Xero shares [ASX:XRO] were down 2.65% to $A39.00 in early trading on the ASX. However, it’s not clear if investors are taking fright or profit taking after the company’s recent runup. MYOB shares [ASX:MYO] are flat at $A3.12, suggesting the latter.
The Australasian market today
Wiise has a big hill to climb to equal Australasian market leaders Xero and MYOB.
At its recent full-year result, Xero said subscribers across Australia and New Zealand grew 31% year on year to 884,000 (worldwide, the company was up to 1.4m subs).
MYOB, which only operates in Australasia, said its subscriber base grew 60% to 399,000 over the same period.
RELATED VIDEO: Xero's New Zealand country manager, Craig Hudson, on hitting an AI milestone (May 7)
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