Xero Solution Overview
Microsoft helps Xero zero in on small businesses
“Microsoft technologies have a
history of being able to deliver
Xero is an online accounting system designed specifically for scalable solutions to some of
small and medium sized businesses. It connects business the largest web applications in
owners, staff, bookkeepers, accountants and other financial the world. That experience
advisors to the same financial system over the Internet. gave us confidence to build our
application without having to
worry about its ability to scale
Born out of the frustration felt by New Zealand software
as we grow our customer
entrepreneur Rod Drury and specialist small business base.”
accountant Hamish Edwards at being unable to find a simple
and affordable accounting product for small and medium Rod Drury
businesses, Xero has captured its target market’s CEO
Microsoft has been an integral part of the Xero story from Customer Profile
inception, providing support and tools to help get Xero to Xero has built an online accounting
market quickly and provide support during its critical start-up system designed specifically for
phase. Less than one year after development began, the small to medium sized businesses.
Based in Wellington and listed on
company had almost 30 employees, more than 100 customers the New Zealand Stock Exchange,
and had listed on the New Zealand Stock Exchange. Xero is run by a team of highly
accomplished business, technology
Fast Growth from Day One and design professionals with a
passion for improving how small
and medium businesses manage
Xero’s founders Rod Drury and Hamish Edwards identified the their finances.
business opportunity in 2003 but it wasn’t until 2006, encouraged by
growing internet access, advanced web development techniques and Web Site
increasing acceptance of the internet in business, that the idea came www.xero.com
Xero’s Beta Programme began in November 2006, just five months Accounting and Legal Services
after development started, involving Wellington-based small and
medium sized businesses and their accountants. Following a
successful limited public release that began in April 2007, the
software will be released to the general market later this year. Business-to-customer
Communication and Collaboration
Small businesses live or die by their ability to manage cash flow on a End-user Productivity
daily basis. Doing this often requires outside expertise, such as an
accountant or business advisor. Typically the exchange of critical
financial data is done via email or disc, methods prone to data loss or
version control issues. Compounding these problems are high up-
front costs for most installed accounting systems and the associated
demands on staff time to keep up with software changes.
As it is accessed over the Internet, Xero allows smaller businesses to
understand their financial position and share data with advisors.
Microsoft Silverlight is being considered to provide a richer user
experience in future.
This customer solution is for informational
purposes only. MICROSOFT MAKES NO
The solution has been designed to work optimally with Windows WARRANTIES, EXPRESSED OR IMPLIED, IN
Server 2003 and Internet Information Server (IIS). As part of its THIS SUMMARY. Microsoft, Windows, SQL
Server and .Net are registered trademarks or
licencing agreement, Xero has access to the latest versions as they trademarks of Microsoft corporation in the
United States and/or other countries. The
are released, and Windows Server 2008 and Internet Information names of actual companies and products
Server 7 are expected to add incremental improvements to Xero’s mentioned herein may be the trademarks of
their respective owners.
deployment and hosting experience in time.
Rapid development to get to market faster
All of Xero’s development work is done using Visual Studio .NET 2005
which provides a fully integrated environment to allow developers to
rapidly develop any style of application. Team Foundation Server is
used as the source control and team management solution. Team
System integrates perfectly with Visual Studio and Xero’s internal
software services, such as issue and release management software.
Xero is excited about the potential productivity increases from
technologies like Visual Studio 2008 and Microsoft .NET 3 (including
LINQ and Windows Workflow Foundation).
Flexible licencing eases cashflow and startup pressures
Running a successful SaaS business requires the software provider to
reduce the cost of providing software services so that the marginal
cost of adding new customers trends towards zero. This requires a
good architecture and a solid platform to deliver the software quickly
and cost effectively.
“Recent changes in Microsoft’s SaaS licencing meant that we didn’t
need to consider riskier open source alternatives. Because we’re
building a SaaS product, Microsoft very quickly put us onto a new
programme called Microsoft SaaS OnRamp. This licensing scheme
makes it very attractive to use Microsoft technologies by lowering the
cost significantly for the first year of production, which is always the
most important year in any new software business.”
SaaS OnRamp helps software companies transition to the new SaaS
business model, by providing discounted licences for key Microsoft
products in their first year.
Xero also took advantage of Microsoft’s Service Provider License
Agreement (SPLA) which allows service providers and software
vendors hosting software to license Microsoft products on a monthly
basis and in turn provide their hosted applications to end customers,
regardless of where in the world their end customers are based.
The monthly licencing cost is flexible and based on usage, meaning
Xero only pays for the services it makes available to its customers
each month. This cash flow flexibility lessened the demands on the
company’s start-up costs. The licence agreement also gives Xero
access to the latest versions of the licensed Microsoft products,
allowing it to continually develop its accounting software and
incorporate the latest Microsoft features in future.
Xero also tapped into Microsoft’s huge resource base by joining the
two-year Microsoft Empower programme, which gives software
developers access to developer tools, software, technical support,
sales and marketing resources as well as phone support from
Microsoft’s ISV Global Support Team. These helped Xero lower its
development costs, test its software and get to market sooner.
Partnering provides trust
Xero has become a Microsoft Gold Certified Partner, a feat that
required its sytems, process and product to be rigourously tested by
Microsoft. Xero is Microsoft's first Independent Software Vendor
Partner to be certified as a hosted solution provider in New Zealand.
The company also has Gold Partner status in mobility.
Craig Walker says Microsoft Gold Partner status was a goal for Xero
from day one. “Software as a Service is all about trust. It was key for
us to seek external validation of our approach,” he says.
“Not only are the benefits huge in terms of licensing, but also the
doors that it opens and the credibility that is brings gained with
Microsoft, the market and with the wider technology community. The
best benefit of being a Microsoft partner is access to an exceptional
network of other companies who become suppliers, customers,
resellers and partners.”
Xero ‘walks the talk’ using technology to run its business
Xero operates as a modern Internet enabled business. A fully
integrated support system was developed with issues management,
wiki-style documentation and customer relationship management
tools. This system is accessible from anywhere over the Internet and
by using products such as Microsoft Office Live Meeting, customers
can be offered training and support regardless of their location.
To deliver their user guide in different formats Office 2007 and Open
XML were used to build a publishing engine to let the documentation
team write a document once and publish it in many formats.
Email is a very important part of Xero’s business, and Xero connects
its Outlook and Entourage clients using RPC over HTTPS and Windows
Mobile to allow frequently travelling staff to securely connect to
email, calendar and contacts anywhere and anytime.
Xero’s story has attracted attention from around the world – in May
2007 Xero won the International Technium Challenge, a high-profile
worldwide business planning competition. Xero is confident it has the
foundations needed for its global ambitions.
Microsoft’s Chief Financial Officer Chris Liddell says “it is tremendous
to see a New Zealand company such as Xero building a business on
New Zealand creativity and ingenuity, and with a big aspiration – to
become a ‘multi-national’.”