Xero investor_presentation_may_2013_-_external_v2 link to Xero slide pack outlining their strategy. This is a public document! The rising star of the SaaS accountancy market is Xero. NetSuite has been around much longer, generates more revenue and has more customers but seems to be a bit stuck at the moment. But Xero is growing much faster and, given it focuses on a much larger segment (SMB) of the market, we think it will be the true star of the SaaS accountancy market.
Xero has recently published a presentation which contains information on its performance, the market and where it sees itself over the next three to five years. Frankly, it is a fascinating read (not just because it is burning money as it builds its business).
- where its growth is going to come from
- who it sees as its competitors
- how much money it is currently burning
The SaaS accountancy market does feel a bit like a land grab at the moment with some very large bets being placed on customers moving from current platforms. The numbers seem to back this up. The big question is: when all the early adopters have moved, how quickly will the remainder of the market take to convert? It will be critical for them to keep the momentum up.
Also, once a SaaS company has a sustainable base, then it quickly generates a profit. And monthly cashflow is much better then waiting for the one month a year when maintenance contract fees come in.