Sage News and Discussion

Brace yourself (and your customers): another increase in the price of Business Care.

Oh, they want to SIMPLIFY pricing again.

What an amazing presentation. Almost entirely focussed again on ERP X3 and the rather mundane discussions about shuffling pricing (can't any moron do this?). Nothing about product features or R&D efforts, etc. Smoke and mirrors once again.

Growth statistic looked crappy to me - and I'm not sure if it's the focus of Sage or the downward market. I think ERP X3 growth looks good because the base of sales is much lower so that any increase in sales generates a bigger % growth. CRE did not look well at all. I'm sure Sage won't sell it....

CRE? What's that? Did you mean CRM?

And a $200/user Sage CRM price increase

CRE = Construction Real Estate

Can clients really stomach more increase in their annual Subscription?

What choice do customers have? The next Sage argument is someday going to be to compare themselves to what Netsuite charges annually (I think $45k +/- was their avg last I checked). The thing that bugs me is Sage can't have a conversation about how they're improving the product because there's very little R&D I've seen outside of ERP X3. They're basically raising the price because they can. Clearly they've not seen much attrition from prior price hikes.

I'm almost starting to think for clients who can't justify these charges that I sell them our EverSafe! failover solution as their great 'undo button in the sky.' I think the big fear people have about dropping maintenance is something will happen to their system down the road and We/Sage can't support them because they are on an unsupported version (this is why TomorrowNow! made so much money supporting Oracle when customers got tired of paying maintenance) With our solution, they could clone MAS every 10 minutes or so. If something went off the rails, instead of panicking, they could just 'rewind' to 10 minutes ago and 'be like it never even happened.' Problem solved... http://www.disaster-recovery-services.net

Last year they had a 17-25% hike in maintenance and only got 3% growth out of it. Those who were capped at 25% last year will likely see another 25% increase this year. The CRM portion of the maintenance will go up by the 25% list price increase. Sage won't see disaster immediately, but it will happen, because a few years down the road the off plan people will need a refresh for whatever reason and say ""anyone but Sage"".

I'm literally in a deal now where it is down to Epicor and us or SysPro. The customer was on PFW with Batchmaster for 5 years. They were getting raped for $13k/year in maintenance and all they've seen for that $65k of maintenance is a few very minor tweeks and eventual (but late) compatibility with Windows 7. It still requires a 32bit version of windows on the server. Even though Sage is offering them huge discounts to 'stay in the family' they want nothing to do with Sage anymore

@MarkChinsky the problem with your concept -- which if I were a business owner I'd probably strongly consider -- is that (a) Sage would come after you if you ever were able to make any real profitable headway and (b) as management turns over at companies needs change and it suddenly becomes your fault that maintenance was dropped, etc. The maintenance that customers are paying is actually quite reasonable in many (but not all) cases when you compare to what the cloud solutions charge. However I cannot argue that Sage is putting much of that money back into the product and to me that's like killing the goose that lays the golden eggs.

@WayneSchulz Just because somebody else came up with a way to squeeze more money out of companies for less value (most cloud solutions) thanks to the willing accomplices in the media, doesn't give carte blanche to premise solutions to hike their prices. Plus, most cloud solutions are still in the phase of rapidly improving their products (like SOTA was in the 1980's and 90's.) If sage gave us a more material portion of the maintenance revenue, my integrity could be bought more easily and I'd go along with the value lie. This is why I could never sell ""MA's"" at Sears. I never believed in their value and even though I had spiff incentives I didn't sell them well. But nobody who walked in to buy a low end VCR was walking out without the top of the line model because I believed in the enhanced features. Plus, the cloud providers haven't already charged the company $3,000+/user for their 'perpetual license'.

Did anyone grab slides from this? Or is the presentation available on line somewhere? I cannot believe they are raising CRM license prices. Now we are more expensive than Saleslogix. Wahoo.

They claimed they had discussed that with CRM partners who agreed Sage CRM was leaving money on the table...

Notes: https://www.evernote.com/shard/s1/sh/1424eb1d-a8fa-401c-a0ef-4c52b9fa30b7/3c5497c02f4cafc16080bc0bf1259a98

Wayne, how did you capture those notes? I take window shots on each slide and paste into a OneNote page. But that isn't text. Yours is impressive.

Peter, ""more expensive than SalesLogix"" is exactly what popped into my head when they showed this. SLX has 3 levels of named-user licenses: $795, $995 and $1095. Most are at $995. They are also discontinuing concurrent CRM licenses. It sounds like this a business decision, not technical, because they'll let legacy concurrent users continue. I think it's a mistake. FWIW, we closed a significant SLX deal for two main tech reasons, and one is the ability to mix and match named- and concurrent users.

I got the distinct impression that the pricing changes are part of a strategy to shift as many customers over to subscription pricing as possible. I remember correctly, none of the price changes affect customers on subscription.

Grandfathering"" customers' concurrent licensing only means that they will delay forcing the change until they need it as a source of revenue.

@JerryNorman have you seen the man type. He makes me look like a tortoise on the keyboard.

@BrianRice Totally agreed. Does anyone even listen to Sage's justification for price hikes any longer? It al boils down to two reasons (a) because we can and (b) because we need to show revenue growth in NA.

@RobertWood I have not. Does he use a water-cooled keyboard. Wow!

@JerryNorman he really should.

I love how Sage justifies a price increase in CRM based on the new functionality recently added. That's what shelling out 21%/year is supposed to buy. Sage (and any developer) only adds functionality for 2 reasons. 1) To win more new deals, 2) To justify annual maintenance. If you raise the price ever time you add more functionality that would offset the advantage in new deals as you would no longer be cost competitive. Most of the 'technology upgrades' is just so the product isn't considered ancient based on improvements in overall tech.

@MarkChinsky ark, The functionality they added to Sage CRM is pretty much all in the competitors, in one fashion or another. Adding it is just the ante to stay in the game.

I'm in Irvine this week and raised the question to a few execs: ""exactly which Sage CRM partners were requesting this increase?"" There was a lot of uncomfortable buck passing ""so-and-so spoke to several people"" and ""so-and-so"" would refer to someone else. I asked the question: ""why not just say you increased price because you felt it was time? Why fabricate something that would be found as untrue?"" A lot of arrogance there in my opinion. PS. Azamba is accepting nominations for the Sage Spirit Award. http://www.pages02.net/sage-corporate/SageSpiritAwards/?spMailingID=5327329&spUserID=MTIzNjQ2OTE4MDUS1&spJobID=315843022&spReportId=MzE1ODQzMDIyS0

Here's my TL;DR that I posted on DSD's Socialcast: Effective August 1, 2013 most prices are going up 3%. This means maintenance goes up too (Starts with renewal invoices May 2013). Concurrent users for Sage CRM go away and per user is going up from $795 to $ 995. Why? Because Sage can. I think partners fall for Sage's excuses and bullshit way too often. If I had a dime for every partner who fell for Sage telling them that ""yeah we're thinking of rolling back our changes"" . NFW - Sage isn't doing anything that is going to take money out of their pockets. Wake up channel and smell the coffee...

At the end of the day... Sage is increasing prices at a pace faster than it is improving the product. In market share perspective, they are falling behind the competitors and raising the prices will only accelerate the already negative trend. Combine that with the near universal trend for partners to pick up alternative products and it could lead to flipping and a complete implosion. We have never actively tried to flip a customer from one product to another, but sooner or later Sage will make it attractive to do that as they push subscription

I somewhat agree @GaryFeldman however I think the true danger point for Sage will be if another product were to have data conversion. And since Sage can't even migrate data from their own products I have low expectations another company will. The only short term challenge I see is if someone like a Netsuite offered an ""all in"" $2,500 per year annual plan.... Don't see that happening either. TL;DR: These customers are really locked in. Sage has little to be afraid of and they know it.

For current customers, Wayne is right. And I'm not aware of any SaaS vendors actually making a profit (although salesforce makes a small one), so it's hard to argue that those alternatives will get cheaper. When you run the numbers, TCO for SaaS vs. perpetual license and related costs cross-over at 3-4 yrs now. I don't know what this strategy means for new customer acquisition. Sage 50 won't be ready for prime time for a few years. X3 won't be cost effective for mid- and upper-end of 100 for awhile, either. I think Sage is drip by drip shredding what was once a pretty cohesive channel. The needless lying associated with bad news is just another data point in the mass pointing to ""JAC"" (Just Another Channel). Without products to inspire the better consultants, this will slowly get in their way.