Xero is rewiring the small business economy as we know it.
Rod Drury says Xero is on its way to being a billion dollar business with one million customers by next year.
“Xero is rewiring the small business economy as we know it, making accounting more efficient, more productive and more useful to Xero’s customers and the millions of businesses worldwide who have not yet accessed the cloud,” says Drury at Xero’s annual shareholders’ meeting in Sydney.
He says Xero has proven its ability as a global small business platform, with more than 717,000 paid subscribers across over 180 countries as of March this year.
He highlights Xero’s goal to build a global financial web. “Through our global relationships with major banks and financial institutions, we are forging a financial web that will redefine how small businesses access capital and services they need to grow, and really light a fire under small businesses globally.”
Xero says it has connected to more than 80 banks and financial institutions globally, including a recent integration with Wells Fargo, a top US bank servicing three million small businesses and one in three households across America.
In Australia, Xero recently announced a deeper integration with Commonwealth Bank, enabling mutual customers to set up direct banking feeds from their platform of choice. This comes in addition to existing relationships with Barclays, HSBC and National Australia Bank, among others.
Over the past year, says Drury, there have been a trillion dollars of transaction sitting on their systems.
He also sees the Xero network growing as customers are saying to their business partners, “unless you are on Xero, it would be too hard to work with you.”
“We built something far more dramatic than accounting in the cloud,” notes Xero CMO Andy Lark. “It is now the system of record for SMBs.”
We built something far more dramatic than accounting in the cloud
Xero's 'super hard call'
Drury explains Xero’s comprehensive migration to public cloud allowed it to set the innovation agenda for the industry.
“This allows us to deliver things faster and provide better customer services," he says of the shift.
He says Xero made the “super hard call” to replatform the business on top of public cloud via Amazon Web Services.
“So while we were delivering all of these results, we also rebuilt our entire technology stack,” says Drury.
He compares the experience to “building [a] passenger jet while you are flying people around the world.”
“Over the last three months we have been moving customers into the Amazon environment,” he says and this will continue over the next three months.
He says the shift allows them to do innovative things like getting customers’ bank feeds automatically loaded into Xero first thing in the morning.
“If we are running 20 to 50 servers, that process might take two to three hours,” he states.
In the Amazon environment, they can just spin up 200 servers to do the work, turn it off, and just pay for the time used.
The next phase of this migration is machine learning and AI, he states. He notes how the big cloud providers - AWS, Microsoft and Google - are putting big data tools right inside their data centres.
We can turn on a whole lot of services using these tools, says Drury. “This will fundamentally change the accounting software experience.”
“We are just scratching the surface in terms of growth," says Sankar Narayan, chief financial officer, Xero.
“We are not relying on any particular geography to get to our targets,” he says. He says Xero’s new markets include Asia Pacific, with Xero opening an office in Singapore.
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