Podcast Ep 41: He liked it so much, he bought the company and made a big bet on the cloud. Now Big Red Cloud’s CEO Marc O’Dwyer is planning overseas expansion and potential acquisitions.
As Big Red Cloud CEO Marc O’Dwyer recounts how he came to steward the SME digital accounting platform, it’s hard not to think of US entrepreneur Victor Kiam’s famous catchphrase about Remington: “I liked the shaver so much, I bought the company.”
Formerly known as Big Red Book, the accounting platform had been in existence since 1993 but had been struggling by the time O’Dwyer met with the owners.
“We need to support each other to drive ourselves out of this”
He gave them three choices: “You can lift the phone to a competitor and sell it to them. You can get somebody like me who has the ability to market accounting software. Or three, you can do a deal with me which gives you the best of both worlds. So, they went from owning 100pc of the Big Red Books to owning 26pc of the combined group because I had my own company at the time. We merged the two and I took a majority share, and I turned it around to be profitable within six weeks.”
Today Big Red Cloud as the business is known, is a fully-fledged digital platform that is used by more than 75,000 businesses across Ireland and the UK and a recent alliance with US fintech Plaid enables owner-managers using the platform to connect their accounts at more than 11,000 financial institutions, including Bank of Ireland.
A big bet on cloud
A consummate salesman at heart, O’Dwyer cut his teeth in selling Take 5 accounting software. After Take 5 was bought by software giant Sage, he decided it was time to run his own company and that was how he was introduced to Big Red Books.
Recognising that cloud computing was the future of software, in 2009 O’Dwyer led his company onto the Microsoft Azure cloud platform and pretty much bet the company’s future on cloud. The decision was the correct one as cloud computing has transformed the entire business world, and it is pretty much the reason why so many businesses were able to keep moving when Covid-19 hit and so many people had to work remotely.
With tens of thousands of businesses using the Big Red Cloud platform, O’Dwyer has a good vantage point to assess the damage wrought by the Covid-19 pandemic on the business world and the view, he says, isn’t pretty.
“So two-thirds are probably decimated is probably a fair description of where we’re at, at the moment.
“We sell to the butcher, the baker, the candlestick maker, the IT developer, the undertaker … you name it. They all use Big Red Cloud. So we have a pretty good understanding of what’s going on in the pandemic. There was a massive rush to digital which has been beneficial for a company like ours, but there were older school businesses – accountants who liked our Big Red Book product and didn’t want to move off the desktop. So in order to facilitate them in such a bad economic situation we had to give them extra licenses so they could work from home.”
Having witnessed the fall in business that many different SMEs experienced in various lockdowns, O’Dwyer is certain there will be no real let-up until a vaccine is widely available.
Crucially, in the meantime he points out how important it is for Irish people and Irish businesses to buy off other Irish businesses. “We need to support each other to drive ourselves out of this.”
The decision to move to Microsoft Azure Cloud in 2009 O’Dwyer says has been a phenomenal success for the company. “Microsoft were delighted to support us because here was this Irish company betting its future on their cloud product. They gave us as much support as they could.
“But we had a huge learning curve,” O’Dwyer pointed out, indicating how it took a big leap of faith from charging close to €1,000 a package to a €28 per month subscription. We were losing around €975 in cash flow every time we got a new customer. So we had to come up with unique ways of selling. So we came up with an annual plan and a three yearly plan and to this day it still works. Around 65pc of our customer base pay a year in advance and 25pc pay us three years in advance. And actually, during the pandemic, the three-year subscribers went up by 34pc. So that’s the confidence that Irish small business owners have in their business to buy a three-year plan while many worry if they’re going to be around in three years to them. I have to take my hat off to them, it’s part of the Irish confidence that is inbuilt into our DNA.”
Businesses in more than 19 countries with similar accounting rules to Ireland use Big Red Cloud and the platform is tailored to work in jurisdictions like the UK, Malta and Cyprus. With Brexit looming and with many UK customers using Big Red Cloud, O’Dwyer has his eyes on the future and is planning to export to countries like Australia, New Zealand and South Africa.
Having raised €4m in funding last year, the company is hoping to expand overseas through acquisition.
“We are on the lookout for an acquisition and if we could add a natural acquisition first it would be a payroll company possibly in the UK that doesn’t have accounts. We have pulled this for the moment because of flight and travel restrictions, but expansion internationally is on the cards.”
By John Kennedy (firstname.lastname@example.org)
Published: 16 December, 2020