Subscriptions boost MYOB
Privately owned software business MYOB has reported a surge in the number of new customers buying subscriptions to its online services, as the rise of cloud computing shakes up the sector.
MYOB, now owned by private equity firm Bain Capital, made its name in the 1990s selling accounting software packages for small businesses to install on their desktop computers.
But it has faced growing competition from new rivals such as ASX-listed Xero providing similar services over the web.
After reporting a 7.6 per cent rise in first-half revenue to $115.7 million, chief executive Tim Reed said the share of new customers coming to the business via online subscriptions had surged to 42 per cent and would soon be much higher.
"The market is evolving. That 42 per cent a year ago would have been sub-10 per cent, so it is moving quite quickly," he said. "I certainly expect that over the next 12 months it will go well past 50 per cent."
Mr Reed said MYOB had made the transition to a company driven by online subscription revenue.
In the latest half it made a net loss of $6.3 million after tax. The company said this figure was not a key focus because its profit statement contained many non-cash items.