Xero enters final stretch in AWS migration

Accounting SaaS provider prepares to shift customer data to Amazon’s cloud

Xero co-founder and CEO, Rod Drury

Xero co-founder and CEO, Rod Drury

Xero is preparing to move customer data to Amazon Web Services (AWS), entering the final stage of a two-year project to migrate to cloud infrastructure.

The ASX-listed software company expects begin the process in June, and to have all customers moved to AWS infrastructure by the end of 2016.

The move will deliver “sustainable competitive advantage” to the software-as-a-service provider, Xero CEO Rod Drury said during a briefing on the company’s full year results.

“Google, Amazon and Microsoft are all investing a fortune in platform-as-a-service, and if you’re not on that environment, you’re just not going to get the lowest cost to serve,” the CEO said.

Drury said that in addition to delivering lower costs, the move to AWS will allow the software company to more easily invest in future innovation initiatives.

“The next level of innovation must be around machine learning, artificial intelligence, using big data to mine insights to give them back to our customers,” the CEO said.

“If you’re sitting on your own tin, you have to make a decision about what those technologies are, guess how many servers you need, spend the capital cost to get them into your environment.

“Amazon, Google and Microsoft are commoditising that innovation inside their clouds, so we can literally now turn those new services on.”

The two-year project has involved a reorganisation of development work inside the accounting software provider.

“You can see the amount of work that you have to do to do this; not just the physical part of doing the project, you have to actually change your internal development organisation and development culture to take advantage of this,” the CEO said.

“We haven’t just done a ‘tick the box, move to AWS’. We’ve thought hard, as we did when we built our original platform, about ‘if we did AWS right, this is going to give us sustainable competitive advantage for years ahead.’”

For the 12 months ending 31 March Xero reported a loss of NZ$82.5 million (AUD$76.4m), up $12.9 million on the previous year. As of 31 March annualised committed monthly revenue hit $257.9 million (up 62 per cent on the previous year).

The company reached 717,000 subscribers globally (a net increase of 242,000 on the previous year), including 312,000 in Australia and 186,000 in New Zealand.

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