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.