MYOB Faces a Huge Challenge to Match the Success of Market Leader Xero

MYOB vs Xero: Why Reclaiming Market Leadership Is a Steep Climb

Can MYOB realistically challenge Xero again—and what would actually need to change?

That question has lingered for years, but it became especially pointed after takeover interest in MYOB reignited debate about whether new ownership could reverse a long-running shift in the accounting software market.

For investors, accounting professionals, and strategy leaders, the MYOB–Xero story is no longer about features or pricing.

It’s about timing, distribution, and the power of professional ecosystems.

This analysis reframes the rivalry for today’s decision-makers.

It explains why the shift happened, why it still matters in 2026, and why reclaiming market leadership is far harder than it looks on paper.

Talking about the KKR non-binding takeover bid George Kontominas, one of the leading Business Accountants at Dendra Accounting Group  in Melbourne, said the “MYOB”s potential is huge, but it faces a huge challenge to win back the kind of success it had prior to the advent of cloud-based accounting programs, which is what saw MYOB lose its dominance as the preferred software platform to current market leader Xero” he said.

The KKR Takeover Bid: A Signal, Not a Solution

In October 2018, MYOB returned to headlines after a non-binding takeover proposal from KKR, valuing the company at roughly $2.2 billion.

Several details stood out at the time:

• The indicative offer price was $3.70 per share;

• Prior to the bid, KKR had acquired a 17.6% stake from Bain Capital at $3.15 per share;

• MYOB’s share price jumped close to 20% on the announcement.

The market reaction wasn’t simply about valuation.

It reflected a deeper hope that a change in ownership could unlock value MYOB seemed unable to realize as a listed company.

That hope, however, was always conditional.

A takeover can accelerate decisions, reshape cost structures, and refocus execution—but it can’t undo a decade of structural change in how accounting software is bought, sold, and embedded.

MYOB’s Core Problem Wasn’t Demand—It Was Timing

For decades, MYOB was synonymous with small business accounting in Australia and New Zealand. Its dominance wasn’t fragile or accidental; it was the product of long-term trust, distribution, and deep integration with the accounting profession.

Before cloud accounting reshaped the industry, MYOB’s position was formidable:

• Around 60% market share across Australia and New Zealand

• More than 1.2 million SME customers

• An ecosystem of over 40,000 accountants and bookkeepers

Crucially, this dominance didn’t evaporate because customers disliked MYOB. Most businesses were satisfied, familiar with the software, and reluctant to change. The problem was not rejection—it was inertia at precisely the wrong moment.

As cloud-native platforms began redefining expectations around real-time data, collaboration, and automation, MYOB’s transition was incremental rather than decisive. By the time cloud accounting became the default expectation rather than an emerging option, the competitive landscape had already shifted.

Why Xero Won the Cloud Accounting Transition

By 2017, Xero had overtaken MYOB in combined Australian and New Zealand subscriptions, holding roughly 47% of the market compared to MYOB’s 41%.

On the surface, this looks like a product story. In reality, it wasn’t.

Xero did not win because it had dramatically superior core accounting features.

For most small businesses, the functional gap between platforms was narrow and shrinking. What Xero understood—and executed better than anyone else—was how accounting software decisions actually get made.

The Real Advantage: Accountant-Led Distribution

The decisive shift was distribution, not technology.

As cloud accounting adoption accelerated, many small and mid-sized accounting firms began standardising on a single platform.

Increasingly, that platform was Xero. Over time, entire practices became “Xero-only” or “Xero-first,” not out of ideology, but out of operational logic.

This created a compounding advantage:

• New businesses followed their accountant’s recommendation by default;

• Software choice stopped being an active comparison and became an assumption;

• Training, integrations, and workflows reinforced platform loyalty;

• Switching costs grew quietly but significantly;

In effect, accountants became Xero’s most powerful sales channel—without being paid like one.

Larger accounting firms often remained software-agnostic, but they weren’t the growth engine.

The future market was shaped by smaller, fast-growing practices onboarding hundreds of new businesses every year.

Those firms set the defaults that new founders inherited.

Once that pattern locked in, feature parity no longer mattered. Distribution had become destiny.

Why This Still Matters in 2026

Cloud accounting is no longer a disruptive trend. It is infrastructure.

For modern accounting firms, cloud-native workflows underpin everything from compliance and reporting to advisory services and automation.

Software platforms are not interchangeable utilities; they are deeply embedded operating systems for professional work.

This has two important implications for MYOB’s prospects today.

First, customer churn is not the main battleground. Most small businesses will continue using whatever system their accountant supports.

Winning individual end users through marketing or pricing incentives rarely scales.

Second, ecosystem gravity is stronger now than it was a decade ago.

App marketplaces, certifications, integrations, and training investments have hardened preferences into habits.

Any serious attempt to reclaim leadership would therefore need to address structural levers, not surface-level metrics.

What a Credible MYOB Turnaround Would Actually Require

Private equity ownership can accelerate operational change, but it cannot shortcut trust or unwind network effects overnight.

For MYOB to meaningfully challenge Xero again, several conditions would need to be met simultaneously.

1. Rebuilding Accountant Mindshare

The core decision-makers are accountants, not SMEs.

That means:

• Making accountants the primary customer, not a secondary audience;

• Designing workflows that save professional time, not just business owner effort;

• Investing in education, certification, and practice-level outcomes;

This is a long game measured in years, not quarters.

2. Redesigning Ecosystem Incentives

Ecosystems are built on incentives, not slogans.

A credible shift would require:

• Stronger, simpler partner economics;

• Clear reasons for firms to standardise on MYOB again;

• A marketplace strategy that rewards depth, not just breadth;

Marketing spend cannot substitute for genuine economic alignment.

3. Being Cloud-Native in Practice, Not Just Branding

“Cloud-enabled” is no longer enough.

Accountants now expect:

• Real-time collaboration without workarounds

• Automation that reduces compliance effort, not adds configuration overhead;

• Seamless integration across payroll, tax, reporting, and advisory tools;

Legacy migrations can preserve customers, but they rarely attract converts.

4. Accepting the Limits of eedSp

Perhaps most importantly, any turnaround plan must be honest about timelines.

Network effects decay slowly, if at all. Even flawless execution would take years to shift default preferences back toward MYOB at scale.

There is no single product launch or pricing change that solves this.

The Strategic Question That Still Matters

The most important question facing MYOB—or any future owner—is not:

“How do we win customers back?”

It is:

“How do we rebuild preference at the accountant level, where software decisions actually originate?”

Until that question has a convincing, long-term answer, the path back to market leadership remains narrow.

MYOB still has strong foundations, a trusted brand, and deep market knowledge.

But delayed adaptation has consequences, and ecosystems remember who moved first.

Why This Analysis Fits a Bigger Picture

The MYOB–Xero story is not just about accounting software.

It’s a case study in how SaaS markets evolve once distribution shifts from buyers to influencers, and from features to defaults.

It sits within a broader set of strategic themes:

• Cloud accounting platforms as professional infrastructure;

• SME software adoption driven by trusted intermediaries;

• Accountant-led ecosystems as competitive moats;

• The limits of private equity in reversing network effects.

For investors, it offers a reminder that valuation upside often depends less on operational efficiency and more on ecosystem position.

For accounting professionals, it explains why certain platforms feel inevitable—and why that feeling is rarely accidental.

In 2026, the question is no longer who has better software. It’s who owns the default.