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Dear shareholder,
We thought you would be interested to read Xero’s latest market announcement, which is included below. It was released to the NZX today.
As always we appreciate your feedback – if you’d like to make contact please email us at investor@xero.com .
Best regards,
Rod Drury
CEO & Founder
24 August 2007
Xero moves to General Release
Xero Live Limited (“XRO”) today announced the move to a General Release of its small business accounting software.
General Release means Xero now has systems and processes in place for expected future growth, including streamlined customer sign-up and the introduction of a Xero “demo” for prospects wishing to trial the software.
Xero has been releasing software approximately every three weeks, in line with its schedule. This frequent release of functionality is underpinned by Xero’s unique Software as a Service business model, where software updates are delivered over the Internet at no additional cost to the end user.
Xero’s move to General Release confirms the company’s goal set out in its Offer Document that it would have the operational capability required in August to move from Limited to General Release.
Xero Chief Executive Rod Drury said the company had achieved another key milestone.
“Since we listed 11 weeks ago we’ve had our heads down building a platform for growth in three key areas – building our team, delivering software and forming partnerships with accountants.”
Mr Drury said the company had continued to hire the best people in a very tight labour market. Xero now has a core team of 41 people across its Wellington headquarters and Auckland offices.
Xero has also made significant investment in its back office management systems, which are fundamental to building a scalable business.
Xero’s marketing activities since listing have primarily concentrated on accountants. Xero’s national roadshow in August introduced Xero to the New Zealand accounting community.
“Accountants are key advisors for our target market. Their input helps us refine out product roadmap so we can create the most compelling offer for all small businesses,” Mr Drury said.
Xero’s Partner Programme for accountants includes a listing on Xero’s “Find An Expert” section of its website, training, and joint marketing to small businesses.
As Xero moves into General Release its sales focus will initially be on a small segment of the overall target market.
“We are confident we have a great product for start-up and professional services businesses. This is where we’ll be focussing our initial customer acquisition activity while we continue to create a more comprehensive offering for the broader market,” Mr Drury said.
“These are early steps in a long journey. We are pleased with the progress we are making, executing our plan.”
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Ben Kepes is an analyst, an entrepreneur, a commentator and a business adviser. His business interests include a diverse range of industries from manufacturing to property to technology. As a technology commentator he has a broad presence both in the traditional media and extensively online. Ben covers the convergance 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. More on Ben
Common Ben, this release is just puffery. There is nothing substantial in it.
Ok, Xero now have some systems and processes in place, have grown staffing and made regular software releases. So bloody what!
Lets see the numbers instead – revenues, expenditures, forecasts…anything. Don’t you think investors deserve something better, especially those that bought into the IPO?
Hi Shaneo
You sound an angry man – however f you read the prospectus (as I have numerous times cover to cover) ther was never any promises of revenue at this early stage. It was always a three year play to build scale and systems for an eventual growth strategy. The systems and staffing inpace are exactly what the IPO is funding and exactly what Xero said in the prospectus thy would do.
While there are no certainties about future revenue, I have to say that Id rather have funds invsted in Xero than MYOB right now – revenue or not!
Cheers
Hi Ben
Gee, did I come across angry! That wasn’t the intention.
While I certainly admire the general business model being adopted by Xero, I feel that the IPO was over-hyped with the losers being those that secured the IPO $1 shares, that are now only worth $0.80. Maybe they are in it for the long term, and don’t mind not seeing any dollar returns. Agree, this was a long term “investment” and it was made upfront in the prospectus.
Maybe my view is too short term and that’s why I didn’t put any money in, nor have subsequently purchased shares in the firm. I guess it boils down to an investor’s appetite for risk vs the timing of returns.
On another note, I enjoy reading your blog and keep up the good work. It’s great to have that diversity of views!
Cheers
Thanks for that and yes I guess we’ll both just have to “watch this space”