The accounting software industry is, contrary to what you might think, a pretty interesting place. Characterized by three large vendors that hold the lion’s share of the market in their respective geographies, until recently it has been a fairly sedentary place with Intuit (U.S.), Sage (U.K.) and MYOB (Australasia) happy to organically grow their businesses. That all changed around 10 years ago when Xero, a New Zealand-based startup, came on the scene and started taking well-aimed kicks at the three sleeping bears.
Since then, Xero has gone on to take significant market share in its home market of Australasia, pretty positive market share in the U.K., and is trying its hardest against a newly invigorated competitor to gain a toehold in the all-important U.S. market. That isn’t proving quite as easy as in Australasia and the U.K., due to some structural and competitive issues and also due to the fact that Intuit is doing a fantastic job (at last) of innovating and doing what it needs to do to keep market share.