Xero hits 2,000 customers

Thanks for the props Jason.

On the basis of the numbers I have, I estimate the UK uptake is something in the region of 65-70K users for accounting style applications, including billing style apps. If I look to the broader landscape for CRM, helper and project apps then the number goes to around 200K.

It is difficult to say how this will project out to 2010 but those that are doing well seem to be accelerating, well into double digit growth. I draw my general cues from Salesforce.com which is going at 49% YOY but anticipates slowing to 36% for the remainder of the year. I believe the UK is still in acceleration mode so would put the figure at 50%+. This is based on small suppliers growing rapidly. In theory then, that puts UK adoption of SaaS accounting somewhere in the 250-300K mark by 2010.

I think wide scale SaaS adoption is a while away, but I expect within the next five years even those established businesses who use desktop software will switch.

It would be interesting to know, of the new businesses that set up how many of them use SaaS offerings, I imagine this market will have a very high adoption rate.

Xero is another example of the new SaaS offerings, it will be interesting to see how this market matures.

A very exciting time indeed, cloud computing being the term I keep hearing these days, it all goes hand in hand with the accounting SaaS providers, a brave new world.

I still think that in general the SaaS market will see more providers setting up over the next few years followed by a period of mergers and also offerings no longer being viable to trade.

As you know Den we offer winweb, which we think is great, but as the market matures the key to success will be what added value they offer far beyond simply recording transactions, something the FreeAgent is doing with its niche focus, and it's that niche focus that will be the key to success, interesting that FreeAgent seems to be the only one that knows that as the rest chase a non specific market, Xero 2,000 users in 18 months, good for a start up of that there is no question, but how many users do they expect to see in the next 18 months and how do those number compare to winweb, FreeAgent, Liberty etc, because that is the true test how you stack up to the competition.

As you already know I love this area, SaaS has over the last 2. years gone from an area the UK market was very skeptical about to one that everyone is now talking about, what will the next 2.5 years hold?

You're totally correct DH - it makes you want to own part of a SaaS accounting business.... oh yeah, you do

:-)

b