Andy Lark, XeroXero made it clear, following September's sudden departure of North American CEO Peter Karpas, that it was not happy with its leadership in the United States. In a trading update for the first half ended September 30, the New Zealand-based cloud company said it was "Dissatisfied with execution and leadership" in this country and that it also needs to fill product gaps.

The importance of the U.S. market was shown in the report that company CEO Rod Drury spend two out of five weeks in America while CFO Ross Jenkins is based here. Simon McIver, VP of global sales operation is acting as U.S. sales VP while veteran Australian marketer, Andy Lark, was named chief marketing officer this week with his job starting next month.

Besides citing the need to fill product gaps, Xero said it needs to speed up refining and tuning the sales model. Despite the problems, the company reports that sales growth has been consistent over the last 12 weeks. Among upcoming features is integrated payroll in more states, payments, practice management and business intelligence. The report did not provide details on those products. It also said it had difficulty hiring in the competitive San Francisco market, home of its North American headquarters.

Xero promised to "lift marketing" for both online and traditional channels and said it had placed inside sales personnel in Denver, Colo. It wants to be what it termed "hyperlocal for field sales" and to have "online channel at scale."

Xero's subscription base in North American continued to grow sharply from a small base. At the end of the half, it counted 22,000 customers on this continent, an increase of 120 percent from a year earlier. There were 371,000 customers worldwide, up 76 percent from Sept. 30, 2013.

By comparison, Intuit had 683,000 QuickBooks Online subscribers on July 31, the end of its fiscal year, and that was up 59,000 to 624,000 subscribers at the end of the preceding quarter and up 40 percent from the 487,000 subscribers at the end of fiscal 2013. Intuit's revenue is overwhelmingly from the United States.

The big news on the subscriber front was that in the last year, Australia surpassed New Zealand as having the most Xero subscribers. There were 119,000 in New Zealand at the end of the half, up 38 percent from 86,000. But the Australian total came in at 158,000, a 100-percent increase in the same time, from 79,000.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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