The IT hardware that runs Xero.
When Xero CEO Rod Drury took the stage at the company’s Australian conference he threw up interesting numbers that pop up when you run a cloud program with more than 100,000 users – the vendor just hit the six-figure mark this week. Xero has processed over $100 billion in transactions, $20 billion of which were made in Australia. It processes one million bank statements daily and takes 12,000 customer care tickets a month.
That last number is pretty low, at least compared to a recent post by MYOB on its FaceBook page which recently claimed it received 7,000 support calls in a week. There’s a logical explanation for the discrepancy; cloud software vendors only have to answer queries about one version of their software, whereas desktop software companies have to support several versions going back years.
But some of the most interesting statistics – that is, to a computer nerd – were those relating to the size of the IT infrastructure required to run Xero’s software.
Drury said the company spends $5 million a year on servers and related services to keep the Xero application ticking over 24 hours a day for 100,000 business users. Here’s what you get for the money:
- 100+ application Rackspace servers
- Access to 120,000 Akamai caching servers
- 60TB data
Presumably the annual bill of $5 million covers more items than this but it’s probably a large chunk of it. Access to the Akamai network was particularly expensive, Drury said. All that hardware can handle 2,500 concurrent users at peak load and 80,000 web requests every five minutes.
When you break down the cost per user, Xero is spending $50 a year for every business customer on hardware.
The total users supported by this infrastructure is much greater than 100,000 which doesn’t include paying users on Xero’s personal plans or trial users. (Xero refused to tell me either of those figures.) So the real number would be much lower than $50.
The numbers are interesting because they show two things: how much infrastructure is required to run a cloud-based business application at scale, and the potential environmental impact of cloud software.
Accounting software is not the best example to demonstrate the latter point because it usually runs on a desktop in most businesses. But if the application in question was a customer database or an email delivery program – both of which usually need standalone servers when run by businesses – you’re looking at a big saving in costs to business and the environment.
The ratio of application servers to customers in Xero’s case is about one server for every 1,000 businesses. Even if customer databases or email programs require more servers in the cloud than accounting software, the cloud is removing hundreds of servers from businesses’ shopping lists, from crowded offices and from landfill.
That’s good news for everybody.
Footnote: In a blog posting shortly after the conference, Drury raised the issue that Xero’s top software partners may not have the IT resources to keep up with Xero’s fast growth. Xero was trying to work out how to help the smaller companies get funded so they could also invest in required infrastructure. An interesting challenge given that its application partners are small, private companies which on average charge less than Xero’s $49 a month mid-range plan and have no ability to raise funds on the stock market.