@avagadro
I also respectfully disagree. I had been watching Intuit closely like a hawk for the last 2 years and they have made substantial UX improvements and developed functionality that Xero had been racing ahead with. Correspondingly they have finally improved their NPS and gotten a much stronger hold on the cloud market in the US to ward off the Xero competitive threat. There are multiple market dynamics that you have to consider when assessing the relative merits of both operations.
1) the markets are in different stages of development
- NZ mature- getting to late majority stage
- AU mature- getting to late majority
- UK developing quickly- landgrab phase
- US very early stage
Xero has by far the largest market share in all of the markets which have been more substantially penetrated. Moreover, this has occurred DESPITE significantly higher prices (Intuit is selling licenses for $1 to accountants to grab market share- but they are still doing worse).
Xero announced the move to AWS one year ago, and have released a raft of prodcut improvements that will buy meaningful time to accountants and their clients at the most recent Xerocon, which is leveraging off the benefit of the AWS platform. Intuit has not yet re-platformed and this will be a massive competitive advantage in terms- both in terms of time/focus (can focus on next generation products) as well as the product itself.
At the start of this race- Intuit had a massive incumbency advantage and scale/distribution networks, and despite their best efforts Xero is likely to be cashflow positive next half. At this stage the R&D self funds without recourse to external funding and Intuit's biggest competitive advantage has been susbtantially eroded. On the flipside, despite Intuit's admirable progress in product development with QBO, due to the AWS move, Xero is still 12 months ahead in product and continuing to innovate. As a consequence, she Xero's first mover advantage is still going strong.
I now have no doubt that Xero will be a major fintech player in the years to come. With projects and expenses which are add on services to a market of 1m+ subscribers, you are actually going to rapidly increase ARPU as well as reduce churn and have the underlying subscriber growth to boot. When you have such a large customer base there is very little additional cost in these add-on services. Consequently. I am now suspecting that revenue growth in excess of 40% can be maintained for years to come.
(20min delay)