Paul Greenwell: We've had a developer program since 2002. However, as a desktop product, it was really about how to add on solutions and connect to our core accounting system. That was enabled through ODBC, and we've got about 500 active developer partners that actually use ODBC and write solutions that fit into a number of different spaces.
For example, we have a quarterly business activity statement that has to go into the tax department for tax purposes and is required for every small business. A lot of our business partners don't want to have to write and re-implement that. Over the past 20 years, a million businesses have been using our software.
We help developers stick to their core business. Take the example of legal practice software. All the people in the practice would use their software for their day-to-day work. They'd be doing their billing out of that. What they needed to do was get those core transactions into the accounting system, so that the bookkeeper or the business owner could then do compliance-related things.
As we were moving to the cloud, and a lot of our business partners were moving to the cloud, there was a real push to say, "Hey, we want to start integrating with your online systems." Therefore, it was a no-brainer. We needed to start to open that up and the logical way was through REST-based APIs. That's where everyone else is going in the industry.
API Economist: You've always had a rich developer program. Is this something that the developers have been clamoring for?
Paul Greenwell: There has been a demand there for quite a while. As a business, we ran it as a revenue-generating entity in its own right. One of the really key changes to our developer program is that we've got a free access level now, whereas before it was always a paid program. The number one strategy for the developer program is about increasing penetration of our live programs. We want people to get on there. The online programs are subscription-based, so if we can increase that subscription base, that's good for us. The other thing that we have seen in our developer program is that, as businesses integrate to other systems, they become sticky. They become sticky not just because of lock-in, but because they are actually more satisfied with their solutions. They are much more integrated.
It's a win for the businesses and it's obviously a win for us, in that we get a high retention rate to our system. So we are shifting our focus from the developer program being another revenue channel to being an enabler for our online services and that’s the growth of our ecosystem.
API Economist: What was one of the biggest challenges you guys faced in going to a modern, REST-based API?
Paul Greenwell: Resourcing. [laughs] Over the last five years, we've been going through quite a shift from a desktop company to an online company. It's really about where we spend our resources, and making the business case initially to say, "This is where we should be investing." I'm glad to say that the executives are 100 percent behind the API program. That was the first bit. Technically, we had just rebuilt our core product to work online. Technically, there wasn't a big leap to implement the APIs. There are a lot of good frameworks and solutions out there for doing this now. Particularly with risk-chasing APIs, we are using Microsoft's Windows Azure REST API as the layer for delivering that, so we get a lot of benefits out of that.
API Economist: Your developer program now has three membership levels. Can you talk about how, with these new APIs, you had to rethink your business model? Or aspects of it?
Paul Greenwell: I did a bit of research about how people are monetizing APIs. Really, when we reflected on our own business, we wanted to open up our ecosystem to add value to our own systems from opening this up. We need to make sure that there is value in the program, not only for us, but for our developer partners, to really encourage those partners to come aboard. Looking around at other examples, we can see that there are a lot of good businesses now that started small, with an idea, and are growing that. We also wanted to make sure that the barrier to entry for anybody with those ideas is low, so that we can get as much innovation into the program as possible.
It was very key that we made it open and had that free level. We also did a lot of interviewing of our existing developer base. Last August, we had a big roadshow. Every year, we have a partner roadshow around Australia and New Zealand. As we went around, we were actually talking to our developer partners and asking what it was that they wanted out of a program. In addition to that access, they wanted access to the market. They wanted supported marketing.
Part of our business and how we go to market is through a whole channel of bookkeepers and accounting partners. They are the ones who talk to small business and refer. Our developer partners also wanted to get in front of those guys to build awareness and help with the sales. We wanted to help our developers get exposure as part of the program.
That obviously adds a bit of cost to us, and we can't necessarily give opportunities to all of our developers. We wanted to tier our program so that those developers who are ready and can make the most of the marketing opportunities have paid and contributed. That's why we have the different tiers.
Also, as with our other partner programs, the developers at the paid membership level get access to our software for use within their business. We want to encourage use of our products, so they essentially get a discount. At the free member level, they get access to our software, but with sample data files. They can't use it for their own business.
API Economist: One of the promises with a REST-based API is to speed innovation. What have you guys seen with that?
Paul Greenwell: I guess it's still early stages, but we've got a couple of great developer partners. One of the first to integrate with us was a company called Fathom. I don't use the word often, but they've got a very sexy interface for accounting and financial reporting. You don't hear accounting described as sexy too often, but they've really done a great job in terms of doing benchmarking and KPR management and giving a really rich visualization of the data. It's great to see people like that small company. There are a couple of guys, but they've done a really great job.
Mobile is all the rage and we haven't seen a lot of mobile yet. But I know that there are at least three or four of our developer partners that are looking at building mobile applications in that space. We are really looking forward to seeing what comes out of that.
API Economist: Have you looked at doing hackathons to help spark some of that innovation?
Paul Greenwell: Definitely. We are probably not quite there yet, because we're still early stages with the API. Our focus is to work with our existing developer partners, who have been relatively patient, because we released the product to market last year. But we don't have a full API for them yet. We're trying to work with those partners and help them transition their products to the cloud. But we are also trying to get involved in some of the start-up weekends. Sensis is another company here that has a public API. I've been involved in some of their events. Probably, within the next 12 months, we'll be looking at our own events to start to spear that as well.
API Economist: With regards to launching your program, why did you guys need an API management vendor?
Paul Greenwell: Again, providing a public API is not as simple as just exposing the data. We wanted to make sure that we were going to expose it and control it in a way that we can manage access. We are an API vendor, so we are out there.
We are not afraid to pay and partner with businesses, for something that's not our core business. Our back-end platform, as we mentioned, is the Windows Azure platform. Again, that's not our core business to host and manage that infrastructure, and therefore we found a great partner that we can rely on that does that well. So, in the API management space, it was the same decision. Let's not build something that someone else has already done. We'll focus on our core business, which is providing accounting software and accounting functionality.
API Economist: Did you run into any considerations or barriers around accounting data being in a public cloud?
Paul Greenwell: MYOB is the dominant accounting software company for small business in Australia. We've got close to 70 percent of the market, in terms of penetration of small businesses that are using accounting software. Given that position, we actually spend a lot of time researching small businesses and talking to them. One of the key things that they are nervous about is security and security in the cloud. Again, there is an education piece, but what they are looking for are trusted brands with whom they can have a relationship that's going to take care of their data. They don't necessarily want to know the details about how we are keeping their data secure.
We want to make sure that we give small businesses that comfort. But it also depends on the market. We are seeing that, of our existing code base, we've got half a million active businesses that are using our desktop software. Probably only about 20 to 30 percent of those are keen to move to the cloud at this point in time.
A lot are happy on the desktop. But we are seeing new interest in the market. There is a generational shift that's happening around accounting. New businesses that are entering are probably the younger, savvier digital natives that are much more comfortable in that space.
API Economist: If you look at the current IT trends, what excites you the most about what we're seeing with this explosion of mobile, social, and always connected devices?
Paul Greenwell: I think just the way that it's changing business. With MYOB, we've been in business for over 20 years. The proposition that we brought to market, back in the early ‘90s, was bringing automated accounting systems and computerized accounting systems to small business—democratizing the technology that big business had, and bringing it down to the masses. With all of these open technologies and mobile, there is such an opportunity for small business in terms of connectedness and getting a lot of the same benefits that big business has.
Also, it really stops people from being so tied to their business. A lot of small businesses have payroll every two weeks, so it makes it hard for the business owner to get out and go away. Mobility and online access really change things. We have been looking at the opportunities. People have to do their bank reconciliation. If you're on the train, just pull it up and you may be able to tick off a few of these reconciliations.
Social is changing business as well. Atlas is our website's product for small business. Again, one of the things that we've done is tie that into social media, so that small businesses can actually leverage social media for connecting with their customers.
MYOB's vision is about making business life easier. We are always thinking about how we can make business life easier for small businesses through leveraging these technologies. I definitely think there is a huge change in the space with social and mobile. We are getting a lot of tradies on the road that are now asking, "Hey, I'm out there. Why can't I just do my invoice on the mobile phone, and get paid now?"
The API means that all the innovation doesn't have to be done by us. We can leverage our developer community out there. If we've got 500 partners, that's probably double our development capacity already, so the rate of innovation just goes exponential.
API Economist: What advice would you give to other organizations, particularly software vendors, who are looking at providing a modern, REST-based, open API? What were some lessons learned?
Paul Greenwell: When we asked our community about what they wanted in the API, the number one thing they said they wanted was good documentation, good samples, and that the API does what the documentation samples say they do [laughs]. Don't underestimate the effort in providing that support material and the value in that support material. As we have been going out, we've got customers and developer partners that are using different technologies. So it's being flexible and providing samples in a number of different languages, and understanding that the dev community will also have various levels of technical capability. It's really about making it as easy as possible to adopt and to get up to speed and start using it. Fortunately, we've had really good feedback from our dev partners in terms of what we've provided so far. They have really valued those samples.
API Economist: What are your favorite mobile devices that you use, and what are your favorite apps?
Paul Greenwell: I like the Windows devices. I've got Nokia Lumia at the moment. It's a 7.8, not a Windows 8 one yet. I really like the interface on the Windows. I was getting a bit bored with the iPhone interfaces. My favorite app that I still have withdrawal symptoms from is Flipboard. I love that, as a Twitter client on the phone. That's one that I'm still grappling with. The better apps that I liked were still on my iPhone. So I still have one of those at home that I use often.
API Economist: Paul, thanks for taking the time to talk with The API Economist!
Paul Greenwell: My pleasure!