MYOB takes battle to Xero, Intuit

Accounting software has suddenly become fascinating as a turf war erupts between platform rivals.

The global small business accounting wars between US giant Intuit, Australian incumbent MYOB and New Zealand challenger Xero are heating up.

MYOB today responded to threats to its business with a data conversion service and free offer - and took a few swipes at Xero in the process.

MYOB has launched the service through its partners to help and entice customers of rivals to convert to its AccountRight Live service.

MYOB said the offer comes in response to increasing demand for its cloud accounting solutions. It is sugaring the deal by offering six months’ free access to AccountRight Live for those who make the switch via the service before 31 December.

But Xero founder Rod Drury describes the offer as a "death rattle" from a company encumbered with nearly A$700 million in debt. He says Xero is converting thousands and thousands of MYOB customers to its cloud platform.

"We don't see them in the marketplace," he says.

The conversion service has been in pilot for the past quarter and is "receiving exceptional feedback in New Zealand and Australia", MYOB says in a statement.

MYOB's James Scollay
MYOB's James Scollay

MYOB general manager, business division, James Scollay, says new clients are switching to MYOB cloud solutions to enjoy better value and to access a broader set of features through AccountRight Live which offers cloud-enabled accounting with a desktop interface.

Scollay touts the flexibility MYOB's system offers users who can choose to work on their accounts in the cloud or on the desktop and switch between the two.

But Drury says that is one of MYOB's weaknesses.

"What they did under private equity ownership is not invest in a full cloud platform. What they have is a hybrid," he says.

The feedback from users, Drury says, is it has been a disaster, He referred ZDNet to comments of various forums to back up that claim.

Scollay says over 50% of all new MYOB product registrations in New Zealand are for cloud solutions.

"We’re rapidly delivering on our vision and we’re pleased to help even more SMEs move to the cloud through our conversion services,” he says.

MYOB made a foray into Xero's home turf in May, buying Banklink, which provides feeds to New Zealand's banks, for NZ$136 million.

Xero, meanwhile, is pushing its own cloud bondaries, announcing new functionality called Files in Xero. While Xero has supported single file attachments on bills and receipts for a while, Files lets users attach multiple documents to almost anything in Xero for easy access.

Files can be associated with invoices, transactions, expense receipts, fixed assets, contacts, chart of accounts, bank accounts and manual journals, it says.

Xero isn't just targeting MYOB's base. Last week it raised a $180 million war chest to expand its US push, targeting Intuit especially.

Adding to the intensity of the fracas, software consultant and MYOB partner Maria Mullane of Aspire Solutions took a swipe at Xero in MYOB's release.

"Business owners who are used to using MYOB as a business management tool are often disappointed when they move to Xero because it lacks a lot of the reporting and functionality that MYOB has,” she says.