MYOB Has Invested More Than $40 Million To Grow Its Cloud Users To 116,000

Hold on tight. Picture: Village Roadshow

The number of small businesses using accounting software company MYOB’s cloud-based program has increased to more than 110,000.

The company today released updated customer numbers which show more than 1.2 million businesses actively use MYOB. Of the total more than 500,000 are regular paying customers and 116,000 are on the cloud.

Since September MYOB had added about 16,000 to its cloud user tally.

At the end of September cloud-only accounting software company Xero had 158,000 full paying cloud customers in Australia and 371,000 globally.

MYOB has been attempting to transition its existing user base from desktop to cloud-based solutions, spending $40 million on cloud developments in 2014 as it jostles for position against newcomers like Xero and Intuit in the Australian and New Zealand markets.

“[With] significant investment in R&D, we are positioned well for continued growth moving forward,” MYOB SME solutions general manager James Scollay said.

MYOB said it is confident of its leading market share status, which it estimates to be about 60%, in both markets.

“The uptake of our cloud solutions is driving growth of our total paying and online users,” Scollay said.

In the three months to December over two thirds of MYOB’s new subscribers were on the cloud. At the same time Xero estimates about 40% of new users were previously using competitor products like MYOB. Xero Australia MD Chris Ridd maintains the company is taking market share directly off MYOB.

An MYOB spokesman said comparing Xero’s cloud user numbers to MYOB directly doesn’t match up as Xero includes customers who use practice ledgers. He said about 60% of Xero’s published user base can be compared to MYOB’s cloud numbers.

In response Ridd said: “Less than 20% [of its published cloud subscribers] are classed as ledgers, the rest are businesses.”

He said Xero doesn’t combine its Australian and New Zealand numbers as one, but MYOB does.

“Our Australian customer number doubled in the 12 months to 30 September 2014, and continues to grow quickly by the day,” Ridd has said previously.

“There’s no other way of saying it – Xero is the no.1 cloud accounting software provider in Australia. We have yet to see MYOB to break out its cloud customer numbers for New Zealand, so the true state of its online accounting market share is unclear.”

MYOB said while the 116,000 is a combined total for Australia and NZ the majority are in Australia. The company has not broken down its subscriber base into Australia and New Zealand users but did say of its 1.2 million total active users about 240,000 are in New Zealand.

MYOB is gearing up for an IPO before the end of the second quarter and has a bunch of investor meetings scheduled for next week.

The cloud accounting wars continue.

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