Xero eases ISVs’ path to market with new app store overhaul

The new app store replaces the company's existing app marketplace.
Steve Vamos (Xero)

Steve Vamos (Xero)

Independent software vendors (ISVs) that make and sell solutions for customers of cloud accounting vendor Xero are set to have an easier time beating a path to market thanks to a new app store that has been launched by the New Zealand headquartered company. 

The new app store replaces the company's existing app marketplace and is designed to make it easier for Xero’s customers — such as small businesses, accountants and bookkeepers — to discover and purchase apps to help run their business, while also helping Xero’s app partners grow on the platform. 

The platform goes live globally from today, with the Xero App Store subscription feature set to go live in the US, Canada, Asia and South Africa in the next 12 months.  

Xero app partners in Australia, the United Kingdom and New Zealand already have access to the suite of new subscription and billing application programming interfaces (APIs).  

The new Xero App Store Subscriptions offering is designed to enable ISV partners to offer Xero customers the ability to trial, purchase and manage their app from the Xero App Store. 

“Our vision for the Xero App Store is to be the place where small businesses go to discover and buy apps that complement Xero, and the place to help developers grow their business,” said Steve Vamos, Xero CEO. 

“Today’s milestone is exciting because better connecting Xero’s platform to external apps — whether it’s to manage inventory, receipts or their customer relationships — is a powerful enabler for small businesses looking to grow, manage their workflows or digitally transform their business.  

“With these improvements, we can better connect small businesses and developers to each other, in smarter and more seamless ways,” he added.  

Moreover, the Xero App Store introduces clearer and more consistent terms for partners and a referral revenue share of 15 per cent (excluding fees) on subscriptions for new customers that sign up through the Xero App Store.  

However, it should be noted that Xero app partners can continue to sell their apps to Xero customers via other channels, with the referral revenue share only applying to sales generated via the Xero App Store. 

The new terms will apply to apps available within the Xero App Store on a phased basis, the company said. Any new app joining the Xero App Store will join on the new terms from today, while existing apps will have until 4 August 2022 to adhere to the new terms. 

According to Xero executive general manager of ecosystem Nick Houldsworth, the company has been building towards the Xero App Store launch over the past 18 months. 

“The Xero App Store now provides strong foundations for encouraging greater digital transformation, while democratising access to technology for small businesses,” he said. “As Xero scales globally, this is reflected in the calibre of services offered by our partners in the Xero App Store.” 

Nick Houldsworth (Xero)Credit: Xero
Nick Houldsworth (Xero)

For larger ISVs that have been Xero partners for some time, the new app store provides an additional channel through which customers can find and purchase solutions. But it’s likely the larger players will continue to draw upon their existing sales channels to a large degree. 

For smaller ISVs, however, the platform provides a powerful pathway to the increasingly global market that Xero services. Indeed, ISVs can transact solely through the app store, offloading internal marketing, sales and billing operations to the Xero platform itself.  

Houldsworth noted that although the front-facing side of the app store is the most visible sign of the marketplace overhaul, the company has redesigned the Xero Developer Centre dashboard used by developers of solutions designed to tie into the Xero ecosystem.  

As such, new developer tools are being launched today in conjunction with the app store. 

Perhaps one of the big changes for smaller ISVs will be the refreshed search engine that will give Xero customers a hand in tracking down and buying ISV solutions relevant to their business. 

With the new platform, ISV partners will be able to identify trending search results not being met by solutions in the marketplace, giving them the chance to build new solutions to fill niches as yet unmet by existing software offerings. 

Houldsworth thinks the company will see a surge in new solutions emerge as a result of the new platform. 

“We tipped over 1,000 apps recently, that number has more than doubled recently,” Houldsworth told ARN. “We expect that to continue to grow with new use cases and unmet needs, which is part of the great value of a platform like this.” 

In March, the online accounting platform revealed it was buying Danish workforce management platform Planday, which claims more than 350,000 employee users across Europe and the UK.

Xero, which posted its first net profit last May, will pay €155.7 million (NZ$259 million) upfront and a subsequent earnout payment of up to €27.8 million (NZ$46.3 million) based on product development and revenue milestones.

Xero said when combined with an accounting solution, such as Xero, Planday was able to provide insights to a business or its advisor that help them to adjust staffing levels to match trading conditions and control labour costs, which were often an employer’s largest expense.