Ken Bender, US market analyst is pessimistic of the ability of SaaS businesses to gain traction in our market – Ken was key ntoe speaker at the NZX Tech in the markets event last weekend.
Rod has responded quite rightly saying that Ken doesn’t necessarily understand the make-up of our SME market (and to a lesser extent, that of Australia and the UK). Fact is a medium business in NZ constitute a minnow in the US. Our small businesses (the ones that Xero for instance is pitching to) would be classed more as self employee situations stateside.
Proof of the pudding is, I guess, in the eating but I’m not sure how relevant the analysis of a US player is when assessing offerings for New Zealand SMEs.
Hi Ben,
although there is no official designation, US businesses tend to be classified as 1 to 10 Employees (SOHO/Microbusiness), 10 to 150 is Small Business and Medium Sized up to 500 employees.
At some point NZ SaaS Startups will look to overseas markets including the US and I would suggest that the SaaS market in that range up to 500 employees is very healthy and offers opportunities for any SaaS Startup around the world. In my experience, when selling into organizations of this size (and even enterprise sometimes), Internal IT resources can be very scarce (usally focused on delivering financial reports to CFO and CEO) and SaaS often appears as the only viable solution for certain business units who are waiting in line for IT assistance, no need for direct IT involvement peoplewise or infrastructurewise, which is the same NZ value proposition that Rod Drury states in the article.
Troy.
That’s the problem with a Bender, there’s always a hangover the next morning.
Given Xero’s non-existent revenue stream, shareholders better pray that Bender’s assessment is completely wrong. Without success in the U.S. market I doubt that Xero will achieve the scale it aspires to.