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Bill Bennett


Speed, cost behind Xero move to PaaS, AWS

AWS Summit Auckland Rod Drury

Rod Drury’s name wasn’t mentioned on the agenda for the AWS Auckland Summit. So it was interesting to see the Xero founder and CEO chatting to the other keynote speakers as media representatives filed into to the hall.

AWS put Drury on stage early. He talked about the advantages of building a business on cloud services.

That’s something Drury often talks about. More about that in a moment.

Then, almost in passing, Drury told the crowd: “Xero is migrating to PaaS and AWS”.

Xero has been a Rackspace customer. Only two years ago the small business accounting software-as-a-service company moved to a new Rackspace PaaS service.


That’s a blow for Rackspace and a big win for AWS. Xero is a flagship in New Zealand and others here will figure ‘if AWS is good enough for Drury, it’s good enough for us’.

Xero is a major cloud customer. Drury says his business runs 625 servers and has 584TB of data. In the last year Xero had revenues of $160 million, but is responsible for managing a whopping $130 billion of transactions.

Drury says Xero’s move to AWS is all about speed and cost. He says: “Our culture is one of speed. We know if we can go faster than the incumbents we can grab significant market share.

”It’s not the strong that eat the weak the big that eat the small but the fast that eat the slow“, he says.[1]

That speed means Xero can move far faster than its competitors. Drury says: ”We release small bites of functionality quickly“. That is a competitive weapon, last year Xero rolled out 729 software updates.

He says migrating to AWS and investing in PaaS is about bringing down the cost of serving each of his customers.

Despite putting Drury on as a keynote AWS was coy about winning Xero’s business. AWS regional sales manager Tim Dacombe-Bird says ”We’re excited about bringing on Xero as a customer“. But other than to explain the process was through the company’s ANZ region with ”engagement out of the US” there was little detail.

  1. A misquote. See Rod Drury on speed, capital raising, marketing complexity  ↩



6 thoughts on “Speed, cost behind Xero move to PaaS, AWS

  1. It was very interesting seeing those numbers come up in the keynote. It’ll also be interesting to see where Xero can go from here. I like what they said about trying to be fast because speed beats incumbents. From what I have heard Xero has a very good internal dev attitude and it shows in the progress they have made on their products.

  2. Coy because they are not actually running on AWS. One thing to win a customers intention, another to actually have them paying money. AWS are good at not letting the detail get in the way of a good story.

  3. As a small business customer I’m concerned re privacy issues with US companies majorly based in the US such as Amazon (possibly Rackspace is too, I havn’t checked). It’s not just the spying that concerns me it’s the probably monetizing of all that data vacuuming that’s been going on for a decade or more.

    1. I think with regards to privacy you’ve got a better bet in something like PaaS/IaaS than using Cloud Storage solutions like Dropbox, SkyDrive, etc.

      I do have those issues too, but in NZ there isn’t a way for companies to compete. The scale and technical talent behind large companies like Google and Amazon means a pure NZ based company will never beat them at economies of scale.

      I’m not happy with the situation, and the company I work for have been trying to find an NZ solution, but nothing has truly arisen.

  4. probable not probably. I’ll blame auto-correct. And AWS – Amazon Web Services.


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