I see Xero has halved the cost of additional licences. That is for the second, third, fourth etc businesses that someone uses with Xero, the monthly subscription will be half that of the first. Herein lies some of the benefits of the long tail that SaaS products can connect with.

It’s great for businesses and good for Xero. For businesses it means they can get a world class, robust, secure and centrally administered accounting package for $300 per annum, for Xero it means they get to sell more licences to already converted Xero customers. It’s also a good partner to Xero’s strategy of having accountants very much inside the tent – accountants will be the champions who convert customers to Xero, this pricing change will be the factor that increases numbers of users quickly without increasing the costs involved in converting new customers. Increasing revenue through decreasing marginal cost – good strategy.

For what it’s worth, I was in Wellington on business last week and took the opportunity to call into Xero. I was suitably impressed – the space looks superb, the staff look world class and the systems (from the brief look I had) look to be locked and loade. Capital well spent.

The coolest thing was the Coke fridge – hopefully Rod will read this and post a pic of it!

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.

1 Comment
  • Ben,

    I’ve been following Xero closely as it has similarities to the software we sell (read consignments for invoices, carriers for accountants). I’m also a Xero user having never used any type of accounting package before, and am blown away by it’s simplicity and comprehensive reporting.

    Those who have been tracking their progress will note that they now have around 70 partners in NZ, and have just launched the UK trial. The term “Watch this space” has never been more apt.

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