Xero WAS Badly Beating QuickBooks and QuickBooks Online. IT IS NOT NOW!

Xero WAS badly beating QuickBooks Online. IT IS NOT NOW.

Intuit began by badly beating all its competitors. It then badly beat Microsoft three times. Despite this, it looked for a while like Xero might beat QuickBooks Online, but it is not now.


Intuit founder Scott Cook had to fight with his team to open up the QuickBooks system to others. People wanted access to their data, and this would finally give it to them. Despite this early decision, QuickBooks lost ground to Xero add-ons because only QuickBooks charged developers high rates, while often changing its add-on language. Once QuickBooks adopted the same standard add-ons interface as Xero, it quickly got more add-ons than Xero. This is very important because those with add-ons are far more loyal and far more likely to upgrade faster.


Intuit sold major divisions (Quicken, Quicken Loans, Digital Insight, and others) for more than a billion dollars. This fueled an online push vs. Xero. Intuit also went from spending 75% – 80% of development money on desktop products to 75% – 80% on online products. This made QuickBooks Online a far faster and easier program than Xero


We soon heard that QuickBooks Online was growing very quickly, at up to 80% a year. It has grown more than 55% a year for the last two years, which is at about the same rate as Xero. However, QuickBooks Online now has about three times as many users as Xero. Intuit is a much bigger company, taking in about the same amount from the sale of checks and supplies that Xero does in total. Intuit also is much more efficient, with sales per employee of about three times what Xero manages. That is why Xero lost more than $1.5 billion since inception, while Intuit was very profitable. The Xero loss would be far bigger if it did not capitalize software development costs (Intuit expenses them). The largest Xero investor even sold all his stock, so Xero may soon be out of money unless it cuts marketing costs.

There are many more reasons why Xere is no longer beating QuickBooks Online.

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