I just had the pleasure of attending my second US Xerocon conference, held in Denver June 3-4, 2015. For those who couldn’t make it, I thought I’d give a little rundown of some of the highlights.
Energy and Change Set the Tone
I’m starting to see lots of blogs coming out covering all the new Xero announcements made at Xerocon Denver, but I haven’t yet seen any commentary about the overall tone of the conference itself.
The energy at the conference was palpable and the overriding theme was definitely change. The accounting industry is certainly changing, and it appears that Xero hopes to be leading the charge. Millennials are making their mark on the industry and they attended this conference in droves. I wish I had some statistics on the average age of the attendees, but I don’t. However, I did ask the attendees at my session how many of them were practicing accounting in 1992, and only about 5% to 10% raised their hands. I would not be surprised if the majority of them were born between the late 80s and early 90s.
Common topics at Xerocon naturally included the cloud, but talk about the cloud has slid into the background somewhat as it’s become less controversial and more mainstream. Now attention has turned to the importance of specializing in a particular vertical and in finding your place in the new collaboration economy. Xero, developers, partners, and customers are all working hand in hand to improve the accessibility and use of information to the betterment of small businesses, both individually and on a global scale.
Hazard of bringing the team to #xerocon – now they want iWatches. 😉
— Patti Scharf (@PScharfCPA) June 3, 2015
New Apple Partnership Launched
Speaking of collaboration, I think far and away the biggest announcement was Xero’s unveiling of a new partnership with Apple. An integration with the Apple Watch was demonstrated during one of the keynotes.
Xero will be focusing its attention on developing best-in-class solutions for small businesses and their accounting partners on Apple devices, but even for PC/Android users like myself, I think this is great news. This partnership will greatly increase Xero’s exposure and solidify its brand. If there was any lingering uncertainty that Xero is in this game to win, the partnership with Apple should put those doubts to rest.
Here is what the new partnership means for Xero and Apple users:
- Best Xero user experience first on Apple devices
- Best-in-class solutions from the Apple ecosystem, designed specifically for small businesses
- Tight integration with Apple’s mobility partners to increase time-to-value and reduce friction
- Small businesses seeking guidance can get connected at select Apple stores, Apple authorized resellers, and with Xero service advisors (that’s us, accountants!)
You can expect to start seeing bundled niche solutions for specific types of businesses, such as the retail package (including Xero, Apple, Vend, and Deputy) and the wellness industry package (including MindBody and Xero).
Embedded Performance Dashboards
One of the announcements I’m very excited about is the performance dashboards embedded into the Xero software. Business owners can now watch the performance of their business in real time by watching the change in performance ratios. One of the best parts of this new feature, in my opinion, is that our clients can not only click on the graphs for details and discover how the numbers are calculated, but can also click on the “Ask My Advisor” button to ask questions and work collaboratively with their accountant.
I believe this is an example of how Xero understands the importance of a financial advisor in an SMB’s journey toward success.
More Product Improvements
There were several other product announcements made at Xerocon. Some are already here, and others are just around the corner, but here is a taste of what Xero has going on:
- Payroll in Colorado. What better place to announce that Colorado payroll is live than at Xerocon in Denver. Lots of people have been waiting for this launch.
- Enhanced Gmail Integration with Contacts. Imagine all customer email correspondence being accessible within Xero by contact. I’m looking forward to this type of CRM capability existing within Xero in the near future.
- Enhanced Reporting (known as “Report Packs” in other countries). This has been live for literally a couple of years in Australia, so I’ve been sitting on my hands for a very long time waiting for it. With the announcement at Xerocon, hopefully this is imminent. Soon we will be able to customize reports by including formulas and creating templates to quickly and easily prepare consistent reports across our entire book of clients.
- Xero Billable Expenses. Xero users have been begging for the ability to track expenses that can be easily tagged and invoiced back out to clients. It’ll soon be a reality.
Greg Lam will be diving into some of these features more as they are released.
500,000 Paid Subscribers
Another big announcement from Xero was the fact that they had reached 500,000 worldwide paid subscribers. It was no surprise to me that as soon as this information was out, Intuit reacted with a #thanksamillion Twitter campaign announcing that QuickBooks Online had reached the million worldwide subscribers mark.
This piqued my curiosity, so I looked up some of the paid subscriber numbers over the past few years.
The primary difference between the Intuit and Xero numbers lies in the primary markets they’ve captured. The vast majority of Intuit’s subscribers are in the US, whereas the bulk of Xero’s customers are in New Zealand, Australia, and the United Kingdom. Xero entered the US market in early 2012 and is just now starting to pick up speed here.
Here are the paid subscriber numbers reported by the two companies since 2012. It’s important to keep in mind that while Xero charges by the company, QuickBooks Online charges by the user. Given that difference, I’m not sure we’re comparing apples to apples—Xero may have more actual users of their product than Intuit. But for argument’s sake, let’s assume the numbers are comparable.
|Product||Date||No. of Subscribers||Growth from Previous Period||Annualized Growth||Source|
|QBO||8/28/2012||360,000||—||—||Intuit press release|
|QBO||4/30/2013||459,000||27.50%||41.25%||Intuit Q3/FY2013 Fact Sheet|
|QBO||5/31/2014||624,000||35.95%||33.18%||Intuit press release|
|QBO||6/4/2015||1,000,000||60.26%||60.26%||Twitter campaign from Intuit, 6/4/15|
|Xero||3/31/2013||157,000||101.28%||101.28%||Xero Investor Briefing|
|Xero||3/31/2014||284,000||80.89%||80.89%||Xero Annual Meeting PDF|
|Xero||3/31/2015||475,000||67.25%||67.25%||Xero Annual Meeting PDF|
Three things caught my eye when I looked at this data:
- Xero is less than two years behind Intuit in worldwide paid subscribers.
- Xero’s annualized growth when they hit 450K to 500K is substantially higher than QBO’s when they reached that level.
- QuickBooks Online’s growth picked up speed a LOT in the past year as Xero started nipping at their heels for market share.
As I’ve been saying for years, this will be an interesting race to watch.
So, overall, I continue to be excited about Xero, not only as a product but also as a company. In my opinion, Xero has brought the accounting industry back to life and continues to challenge and inspire developers, partners, and customers. Xerocon Denver has reaffirmed our choice of Xero as our accounting platform, and we’re excited to see what the next few years hold in store.