You won’t see Jeff Bezos quit as Amazon boss, or Mark Zuckerberg hand over the reins at Facebook. So why has Rod Drury suddenly resigned as XERO (ASX: XRO) CEO?
That’s the question analysts will be asking themselves this morning after the cloud accounting specialist announced Mr Drury would be moving to a non-executive director role at Xero the Wellington startup as of April 1.
In his place will be Steve Vamos who has consulted for the business for a long while and has an impressive track record in senior roles at IBM, Apple and Microsoft, among other tech leaders.
On a conference call today Mr. Drury gave little away as to the reasons behind the move, other than to suggest he wanted to focus on other areas in building the company such as product innovation, machine learning, or artificial intelligence, while he has no intention to take on other directorships, start building new tech startups, or just retire to the Martinborough winelands.
Mr. Drury also retains a major shareholding of 12.8% in the company he founded only around 11 years ago, although he did sell around A$85 million worth of shares in late 2017.
Xero is going to miss the vision, drive, know how, and leadership of Mr. Drury as it still has a long road ahead of it attempting to win market share in the cloud accounting space, with powerful rivals like Intuit’s Quickbooks still aggressively fighting to defend their market positions.
The business is also tracking against a stated target of moving to positive cash flows within its current cash balance. It also has an ambition to move towards a NZ$1 billion in annual revenue, which it is still a way off meeting.
Given Mr. Drury is something of a legend in the ANZ tech scene it’s no surprise the stock is off 4.2% to $31.50 in response to this morning’s surprise news, with the company due to rule off its books for the financial year on March 31 2018.
Investors will eagerly await the results due around mid May and any further news as to the company’s strategy. Over the short-term revenue growth rates and the move to profitability are likely to drive the share price direction in 2018.