One of the many things I’m enjoying about Xero is learning about marketing. I’ve done technology, learned a lot about business and operations but real marketing is new for me.

For what it’s worth, here’s a few things I’ve been thinking about that may be useful to you.

Small companies soon discover building a global or even national brand is incredibly expensive. I’ve mentioned before that we find traditional advertising ineffective. Advertising may assist with some brand awareness but as this is immeasurable it’s not something we want to put significant effort into.

With enterprise software you can sell your product on the energy of the founders. Get a good founder in the room and they’ll sell a deal. If you’re burning 200k a month and your product is $50 to $100k, the founders will often be able to get out there and do the 3 or 4 deals for the business to keep moving forward.

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Well-respected web and technology journalist Chris Keall joined the team at the National Businesss Review last month after leaving Fairfax Business Media publications as editorial director.

He caught up with Rod recently to discuss the upside of the global markets meltdown, and how these current market conditions are actually a boost for the concept of SaaS or cloud computing.

The key points were:

• The low monthly fee rather than upfront capital expenditure suits the current climate.
• Small business keeps on ticking, and with many displaced executives looking for new opportunities small business start-ups will increase.
• There will be a greater focus on cashflow, and to raise funding from any source business owners need more up-to-date access about finanical performance.
• SaaS is a megatrend that is starting to accelerate for example, cloud services are the big focus of Microsoft’s Professional Developer Conference later this month in Los Angeles.
• New emerging markets will skip installed software, and all the piracy issues that come with installing software, and go straight to web - in the way that emerging countries skipped fixed line communications and went straight to mobile.
• Well architectured SaaS models allow new markets and opportunities to be opened up at minimal incremental cost

You can read the article here.

It’s great being asked to write for industry publications such as the ICAEW (Institute of Chartered Accountants in England and Wales) newsletter. I love getting the message out to the masses that online accounting is quite simply the only way forward in accounting best practice.

The following is an article, entitled ‘The future of accounting is online’, that I submitted as part of the ICAEW Software Accreditation Scheme newsletter under the banner of ICAEW Commitment to Technology.  It was sent out this week to over 27 000 UK-based accountants.

As the ICAEW says, preceding the article, “The whole area of software-as-a-service (SaaS) is seen by many as the way of the future, with online accounting looking to make inroads into the accountancy market.” Too true we think. Too true.

The future of accounting is online

I’ve long been concerned at how off target the last versions of Microsoft Office were after we’ve seen the real time collaboration features of Google Docs.

As Rafe Needleman writes:

To my mind, the killer feature of Google Docs is not that it is Web-based, per se. It’s that it makes real-time collaboration easy. You can invite a user into a document you currently have open, and you both can edit the file at the same time. It’s not a feature you’re going to need all the time, but when you’re on a deadline and need to get sign-off from one or more other person on a document right away, it’s a life-saver.

In the past week Steve Balmer has started to go public with Microsoft’s Cloud computing strategy and it’s good to see they understand the issues.

I think what people want is something as rich as Microsoft Office, something that you can ‘click and run’, if you are not at your own desk. Something that is compatible, document-wise with Microsoft Office and something that offers the kind of joint editing capabilities that is nice in Google Docs and Spreadsheets. Will Microsoft Office offer that? Yes! Standby for details in the next month.

We want software that is more powerful than runs in a browser. Does that mean we will not have some neat stuff that does run in the browser? No.

We think you’ll actually want the full power of Word, Excel and PowerPoint - and you’ll want to be able to get that simply. But, if you just happen to be in an Internet cafe kiosk and you want to do some light editing, perhaps we need to have a way to support you in that as well, inside the browser.

This is great news and the best example of Software + Services. Using the power of the PC and the connectivity of the Internet together. I really believe that Collaborative Office could be one of the most exciting breakthroughs in productivity for enterprises and small businesses since online accounting.

However there are a few concerns that came immediately to mind.

• Now I’ve moved to a Mac and that Mac:Office runs a year behind Windows Office will Mac users have to wait a whole year after this is released?  Hopefully the Mac:Office team will clarify.
• Will Microsoft tie the collaboration features to SharePoint services - as there needs to be a mechanism for communicating changes and central document viewing? That may not be so great for small businesses.
• Will this be a global product or, because of the reliance on hosted services, will it be rolled out by region?

If I was in Microsoft’s strategy team I’d seriously look at tying Office collaboration into their stack. For many enterprises they don’t want working documents out of their firewall so SharePoint would make sense - and be justifiable.

Looks like some of the details will be revealed at the Microsoft Professional Developers Conference later in the month. But this is exciting news.

I presented to a very knowledgeable audience at a SaaS event that RackSpace put on at Microsoft in London today.

We covered some industry trends, I talked about building a platform for scale, James Murfin from Mural Consulting did an excellent talk on SaaS Marketing and Sean Williams from Collectsoft talked about funding options for SaaS.  There were some great questions.

Here are my slides.

Yesterday Google released a new browser called Chrome. This one of the most significant recent developments in the computing industry and will have a huge impact on business computing.

To understand the importance of Chrome we need to look at what else is happening in the computing industry.

PC’s are dropping to sub $US500 products will quickly drop to less than $US200. At those prices the combination of Microsoft Windows and Microsoft Office, software that is normally purchased with the new hardware, becomes an increasingly disproportionate part of the total cost.

Hardware companies like HP and Dell are therefore motivated to uncouple hardware sales from the Microsoft products.

Once applications live inside a browser, they don’t need to use many features of the operating system. New browsers like Chrome and Firefox 3 allow some information to be stored inside the browser as well. Google has a related initiative called Google Gears that provides for offline capability and storage in web applications.

As web based applications store your information securely in central data centers - rather than on your own computer - you don’t even need a hard disk to run your web apps. The open source Linux operating system can run on a single chip. So a computer can be reduced down to basically a keyboard and screen.

Google Chrome is available in beta now for Windows, and soon in Mac and Linux versions. The Linux version is the significant news as it can be distributed for free.

That means that Chrome + Linux takes the operating system and desktop productivity tools costs out of the stack. Chrome isn’t significant because it’s great technology. Chrome is significant because its Google. Google Chrome is a direct attack on the existing Microsoft based PC, Windows and Office stack.

Google make their money out of advertising and other services so they are very motivated to do this. As are the hardware manufacturers.

It’s not only Microsoft that would be concerned. Apple would also have their eyebrows raised as the Operating System is disintermediated. Hence their MobileMe strategy to gain lock in and ongoing revenue.

This is going to drive a huge amount of innovation as the big guys go to war. And Microsoft will fire its shots with Office Live soon - though the goal posts have been moved.

Microsoft is the only global software mega-vendor that sells into small businesses. So this space is crucial for them and we expect to see a huge investment now to maintain their position in this massive market.

This is great news for both small and large businesses as the costs of computing are going to dramatically reduce allowing a greater proliferation of computing devices throughout businesses

Of course this is great news for the SaaS industry as the high value part of the equation becomes much more about the applications that drive business benefits.

Chrome is an accelerator for the industry. It’s now all about the apps.

Is Xero the first accounting system in the world to work on Google’s new Chrome browser? We think/hope so:)

As Google Chrome is based on Webkit, the core engine under Safari, it seems to work fine. The browser detection objects we used haven’t been updated yet so we had to do some tweaking to allow users to log in from Chrome. We’ve updated BrowserHawk settings to pass Chrome through as Safari 3.1.  (You can check your browser here:  http://help.xero.com/browser)

We thought that some of our geek fans would be all over Chrome today and want to test it with an application that uses ajax and javascript heavily.  Let us know what you think of performance and any issues you find. 

Another set of features we’ve released today around Contacts allow you to link from Xero into other systems.

Firstly, you can now make Skype Calls directly from Xero.

We’re hearing a number of our accounting partners are working from home, walking through Xero alongside their customers using Skype. Now that is Accounting 2.0!

We’ve also added the ability to build your own custom links to your CRM system directly from Xero contacts.  You set up Contact Links under your Organisation settings. We have a link builder that makes it easy to match contact fields inside Xero to your other systems.

Let us know what other systems you link to and what their link formats are and we’ll look at adding them in directly.  What CRM systems are you using?

Rod Drury, CEO of Xero, has been invited to speak at a Rackspace and Microsoft hosted event in London entitled ‘The Route to SaaS and Beyond’.

It’s a crucial half-day seminar and networking lunch for people interested in Software-as-a-Service and the on-demand application delivery model.

When is it?
Thursday 2nd October 2008, 9:30am - 1:30pm

Where is it?
Microsoft London, 100 Victoria Street, London SW1E 5JL

How much does it cost?
This is a free seminar.

Get the full details and register now.

This article I wrote in response to comments on the Capital Market Development Task Force appeared on NBR online today.

Listing benefits greater than just cash

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