Patience is a virtue especially dealing with this stock taken with a liberal dash of optimism
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Patience is a virtue especially dealing with this stock taken with a liberal dash of optimism
The "nuance" of directly competing with their loyal and hard-won add-on's providers is intriguing, and potentially worrying, by providing a 'baked-in' payroll service into Xero.
I would like to hear from Rod, an update on their product strategy, as this appears to be a significant departure from their core product direction and business model -- it 'claims ownership of payroll', disenfranchises existing payroll add-on providers, and fires a shot across the bow of ALL other add-on providers - what next? Payments, job management, CRM, invoicing, reporting, inventory, etc ... ? Rod did not provide a clear response to this, at least not in context of the article below. And there is no announcement on their website.
http://www.stuff.co.nz/business/indu...ayroll-product
I also wonder how much of a distraction it is to their army of developers, having to develop this payroll core functionality, investing over the course of ~18 months and taking on maintenance and support ad-infinitum thereafter, and at what cost financially and opportunity cost against further developing the core accounting code base and progressing XeroBigData2.0. I wonder as well about the effect on Financial Advisers and Accountants who may have little or no interest in supporting clients with payroll matters (other than the bookkeeping), though as it become core Xero functionality, accountants and advisors get drawn into supporting it.
I can only guess that pressure from US customers particularly has driven this approach, that on face value appears divergent product strategy. I haven't heard anything that suggests NZ, Aus or UK customers are demanding core payroll function directly from within Xero, and certainly not at the expense of core accounting functions.
Keen to hear peoples thoughts, and from Rod if he's feeling inclined to share.
BAA
On the face of it I don't really see this as a huge problem for add on partners in general. Intuit incorporates payroll so the third party guys must have know that is was a risk that Xero would eventually develop or acquire their own. Same as the Quote providers. I guess they now need to differentiate their product by offering a superior service to Xero.
The difference between payroll and other add ons is that most companies have staff. It will be a paid for option so will still compete against the other providers which will be more suitable for larger employers.
It will be interesting to see what the uptake in NZ is given it has lots of good add on support already which are suitable even for small businesses (owner uploads, hours, rates and they do all the heavy lifting for minimal cost).
@Casino, thanks for the link. What's your view?
Loyal add-on partners? Open ecosystem? That was yesterday.
http://www.digitalfirst.com/2014/08/...x-marketplace/
Interesting post by a US VC on Xero's numbers: http://tomtunguz.com/xero-s-1/
As noted in the article, some of the differences are because Xro didn't start in the US