MYOB has had a big year with its second float – the largest software IPO ever in Australia. Although the IPO was oversubscribed, MYOB no doubt had to work much harder to convince investors that it was a safe bet for the future.
Its story has changed dramatically in the past couple of years. Once the biggest fish in a two-fish pond, MYOB is now an incumbent defending against a quintet of aggressive competitors in cloud accounting software. Three of those rivals have larger market capitalisations.
MYOB needed the IPO to show that others believed its unique pitch – that the Australian and New Zealand markets are large enough to sustain the exclusive efforts of a 1,000-employee accounting software company.
No other vendor believes this to be the case. Intuit, Sage, Xero, Saasu and Reckon all sell (or talk about selling) to businesses in multiple markets.
I sat down with CEO Tim Reed and asked him about MYOB’s plans now the company was no longer distracted by the IPO. The main question on my mind was – how will MYOB dig a moat around its software so deep that global competitors find it difficult to compete?
Or to put it another way, are Australia and New Zealand different enough from the rest of the world to justify their own accounting software vendor?
One of the most interesting points Reed made was that the hallowed “white space” in the accounting software market – the large chunk of small businesses using spreadsheets that could potentially buy accounting software – is not as large in Australia as in other markets.
More than 75 percent of Australian small businesses use accounting software which is “probably the highest penetration in the world already”, Reed says.
Listen to the full interview below or click through to Soundcloud to jump to these bookmarks.
- 0:02 What was it like to float MYOB a second time? Did you get to ring the bell?
- 3.27 What is the No.1 priority for MYOB now the IPO is over?
- 5.35 What does a cloud version of BankLink look like?
- 8.35 MYOB Advanced – who are the partners that sell this ERP?
- 10.16 Does MYOB Advanced compete with MYOB AccountRight Live?
- 13.25 How are Essentials and AccountRight Live selling? What are the individual sales?