Welcome to the Mclowd Newsletter, our monthly communication to Investors, Marketplace Professionals and Partners.
Introduction
I was recently contacted by a vendor wishing to promote their SuperStream service to the Mclowd Community.
The approach reflected a lack of understanding of both the economics of cloud computing and the way the Mclowd Community is governed.
When Mclowd releases support for SuperStream it will be free, for the simple reason that it will cost Mclowd next to nothing to make the service available.
Over time such marginal cost pricing will become the norm in the asset management industry, and transparency as to that marginal cost will in many instances have been delivered by Mclowd.
Accounting Platform Update
Version 2.3 is now live, including the following functionality:
- Market revaluation on migration
- Actuarial certificate integration
- Improvements to data entry re income
Version 2.4 will go live at the end of June and will include support for capital returns and year-end market revaluation.
As always detailed Release Notes are available on the website.
In addition work on the Statement of Taxable Income and Member Benefit Statements has now begun and I will provide further visibility as to the timing of release in the June Newsletter.
Channel Migration
I am pleased to see that even in advance of delivery of this functionality we have financial planning and accounting firms intending to migrate to Mclowd for FY15.
The key drivers of this channel migration include:
- Access to free SMSF accounting software
- Wholesale rates for admin support under US$20 per hour (inclusive of the Mclowd Marketplace fee of 9%)
- Actuarial certificates that are priced 30% below the rates charged by Bendzulla
As these migrations progress we will publish Case Studies on the wholesale cost savings being triggered by Mclowd. In most cases they will be in excess of 50% vis-a-vis firms such as Heffron.
Marketplace
The launch of version 3.0 has made the Marketplace more accessible to the SME and consumer segments, and we anticipate a broadening of the types of Tasks being posted.
As part of the launch we have released a Case Study which highlights the way Mclowd has used free cloud-based tools and crowdsourced resources to reduce our own bookkeeping costs to just US$82 per month.
Small to medium businesses looking to improve the return from their business operations can download the Case Study here.
Postscript
Economists would tell you that there is no market for the air that we breath because there is no scarcity on which such a market could emerge.
Over the last few years the Directors and shareholders of Class Super have invested tens of millions of dollars on the assumption that the labour required to build an SMSF accounting system and the infrastructure required to deliver it were sufficiently scarce as to support their pricing model.
Over the next few months Mclowd will prove that assumption invalid.
In fact crowdsourcing and cloud computing mean that the necessary software development resources and computing power now exist in such abundance that the price of all forms of cloud-based accounting software will rapidly deflate to marginal cost: $0.00
There is as much likelihood of there being a market for SMSF accounting software in 5 years time as a market for air, and on that basis the planned Class Super IPO should not proceed.
Whether it does or not will depend on the appetite that the Directors and their advisors have for the legal and reputational risk now attached to that transaction.
(Subscribers to this Newsletter looking for a deeper understanding of the forces at work here are encouraged to read Jemery Rikfin’s new book Zero Marginal Cost Society).
Thanks again for all the support we have been receiving for our efforts to improve net returns for investors.
Ashley Porter
Managing Director
Mclowd Pty Ltd