e-conomic has just announced its results. It starts:
13th March 2009: e-conomic, the leading European provider of online accounting, announces today its 2008 financial results, revealing revenues in excess of £3.8million for the year to the end of December.
Yesterday I talked about WinWeb but without claiming no.1 status:
Stefan Topfer claims revenue of £5 million.
I see that Twinfield says:
Twinfield the no. 1 in online accounting…
using customer metrics and having recorded turnover in 2007 of €3.6 million which at today’s exchange rate is about £3.3 million UPDATE: €4.5 million or £4.15 million in 2008.
The UK’s leading online accounting software with 15,000 small business accounts.
[My emphasis added throughout.]
Anyone with an ounce of sense will know that these claims cannot all be right. But then they might be. It all comes down to definition. The problem, and it’s an age old issue among software vendors, is that everyone wants to define the market to suit their marketing position. So what if it’s egregious?
There is a genuine difficulty because saas/on-demand is a different style of application that is leading us down all sorts of business model rat holes. I’ve argued that ‘free’ is suicidal without Plan B but that Plan B has gotten WinWeb into a good position. On the other hand, numbers matter. The question now comes, how are we going to define the market? Is it a revenue game or a customer number game?
Putting on an investment analyst’s hat doesn’t help because some think that land grab and then monetize is the way to go – as WinWeb proves. On the other hand, there is no denying the power of revenue. I’m starting to think that what we need are three measures.
First is the money and on this brief showing then WinWeb is clearly out front. We’ve yet to see Xero‘s numbers for 2008-9 and that could change the runners and riders’ position yet again. The second is number of registered users – but then I would refine that to include those who have logged in at least once in the last 2 months. Taken at face value, that also puts WinWeb out front but then I could equally point to FreshBooks with their 700,000. Third then is territory. Despite the fact the earth is flat, some vendors are territory specific.
What’s painfully obvious to me is that this market needs better definition and also a more coherent approach to reporting and position assessment. While I have a LOT of market data, I would not claim the data set is perfect by any means. Whichever way I end up parsing it someone somewhere will say ‘ah but.’ And that’s fair enough because even now I’d argue the variety of business models out there makes for a complexity that can readily lead to confusion. And all of that before we consider the relative market segments in which each vendor plays.
Even so, over the coming months, this is something I want to clarify. The market needs it and so do customers who are trying to make an informed decision about where to place their bets.