Ann: GENERAL: XRO: Comments on accounting softwar

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• Summary: GENERAL: XRO: Comments on accounting software industry consolidation
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XRO
15/05/2013 09:27
GENERAL

REL: 0927 HRS Xero Limited

GENERAL: XRO: Comments on accounting software industry consolidation

MARKET RELEASE
Comments on accounting software industry consolidation

15 May 2013
MYOB's purchase of BankLink will have no impact on Xero's current growth
strategy. MYOB already uses the BankLink service to provide bank feeds for
its customers, so this acquisition provides no change to the competitive
landscape.

Xero CEO Rod Drury says "the acquisition gives the accounting market a clear
choice, between Xero's purpose-built pure cloud accounting service with
integrated bank feeds versus a patched together solution involving hybrid
desktop software and bank feeds that are charged per transaction."

Xero General Manager New Zealand Amanda Armstrong says Xero already has
direct feeds in NZ and Australia for all the major banks. "MYOB will have a
lot of work to do to catch up on where we're at with our overall integrated
solutions and current developments."

"Accountants we've talked to so far are concerned the BankLink acquisition
will slow MYOB down on making essential improvements to their core accounting
products and distract them from delivering a fully functional cloud
offering," she says.

Paul Pettit, a partner of Wellington based accounting firm Curtis McLean,
says MYOB needs to be focusing on its own software. "It's great to see MYOB
taking steps with bank feeds but usability is their real issue. The bank
feeds are only the start of the accounting system. The benefit of Xero is
that it is just nice to use and has an entire ecosystem of apps around it.
With updating an old system it's a lot harder."

Active Chartered Accountants director Ben Shaw agrees and says "MYOB has
taken too long to embrace the technology behind bank feeds and to recognise
the need for making them more client-focused rather than accountant-focused."

Drury says "Bain, the US Private Equity owners of MYOB, are signaling an IPO
as their exit. With Xero making serious inroads in the accountant practice
and tax tools market the deal makes sense for MYOB to add revenue in the face
of its growing debt."

Xero has announced it is working with leading financial institutions on the
next generation of banking services and is making good progress on rural data
feeds. This week Xero was awarded best in show by US financial institutions
at the Barlow Research Client Conference, for its innovative integration
plans.

The small business accounting software industry in Australia has seen a
period of significant consolidation. CCH (part of AMS Listed Wolters Kluwer)
acquired Christchurch based Acclipse last year. The exit of BankLink's owners
leaves Reckon (ASX) and Xero (ASX/NZX) as the primary Australasian-owned
companies now competing with MYOB and CCH.

ENDS

For more information contact:
Rod Drury
Xero CEO
027 600 0007
[email protected]

About Xero
Xero provides beautiful, easy to use online accounting software for small
businesses and their advisors. The company has over 150,000 paying customers
and 200,000 users in more than 100 countries around the world. The company is
listed on the NZX and ASX.
See http://xero.com
End CA:00236235 For:XRO    Type:GENERAL    Time:2013-05-15 09:27:21