It was really interesting to hear that the largest supplier of accounting applications in Australasia, MYOB, has been on the acquisition trail. MYOB has bought the second largest Australian ISP, SmartyHost, for AUD7mil. This follows their acquisition earlier in the year of the Perth based ISP Illisys.

So what is an accounting software supplier doing buying an ISP? MYOB CEO Tim Reed explained it by saying;

Our research shows that 59 percent of Australian small businesses don’t currently have a Web site. Increasingly a Web site is as essential to a business as are business cards and signs. Through the acquisition of SmartyHost we can now deliver a basic Web site and domain name package to Australian businesses, starting from under $100 per year.

All of which is somewhat outside (actually completely outside) of MYOB’s core business. The money quote however comes later. Reed also said that;

[MYOB plans to help businesses] rewire their customer and supplier interactions and other core business processes.

Which is really interesting when we look at this acquisition in the context of MYOB’s less than stellar entry into SaaS accounting. It’s hard not to see Reed’s comments referring to moving transactions online to allow businesses to connect in the way that only an on-demand delivery method allows.

But why buy an ISP?

Perhaps some all-encompassing play that rolls out e-commerce for currently dis-connected SMEs, linked with an on-demand account application that seeks to build a connected ecosystem? Time will tell

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

2 Comments
  • Has the potential to be a smart idea. Late adopters will be looking for something proven and simple, a single “internet” package that they can buy and be away laughing.

    Whether MYOB are anywhere near the right people to offer that, you would know better than I would…

  • I wonder if they thought there was a reason why businesses didn’t have websites – comparing them to business cards and signs is pretty much irrelevant in my mind.

    Suspending my disbelief for a minute, there is some limited common ground between websites and accounting packages (at the transaction level) but I fail to see any tight synergy here.

    A colleague of mine at Telecom had a great term for these types of plays – ‘money sucking playgrounds’

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