General Consultant Discussion

FT published an interesting story online regarding the departure of Sage CEO Stephen Kelly. Unfortunately, you'll have to Google "" Sage's solid reputation shaken"" and click the link through Google search in order to avoid the paywall and read it online. I also printed this to PDF and highlighted what I think are the most important portions here - https://www.dropbox.com/s/8zcg7nszt2kgezq/Sage%E2%80%99s%20solid%20reputation%20shaken%20_%20Financial%20Times.pdf?dl=0

I love this quote and couldn't agree more with it: Gary Turner, head of the UK division of Xero, said Mr Kelly had been constrained by institutional investors who did not want to sacrifice profitability to drive innovation. ""This has forced them down an intermediate route focused on defensively renovating existing revenue lines and introducing subscription pricing, but which has otherwise been more of a rhetorical transformation which has fallen shy of making the significant strategic plays they need to make,"" said Mr Turner.

So would Taylor M want it?

And it's interesting that the two 'missed acquisition opportunities' mentioned were Visma and MYOB, which now both white-label Acumatica.

I don't know what Sage's next move will be. I feel that it's too late to write a SaaS application from the ground up and push to gain significant market share. While it's easy to imagine force migrating people to a single system I think the complexity of doing so is overwhelming and very very high risk. It is much more likely, in my opinion, that Sage works up some cash (perhaps by selling division(s) and buys an established product. What we could see is more of a Sue Swenson type CEO vs a Dave Butler.

Wayne posted this in LI, too. Sunil Padar said that Swenson had recommended buying Intacct in 2012, but the Board declined. That was the same year they came out with the boneheaded Invest/Hold/Divest categories, and decided to sell Saleslogix before they had a buyer lined up. Kelly had his weaknesses, but this is a BOARD problem.

Here is the [transcript from Sage's site with some highlighting. It shows CFO Steve Hare's June 2015 comments during Capital Markets Day ](https://www.dropbox.com/s/se8l9bbg9zmcxv7/Capital%20Markets%20Day%20-%20Steve%20Hare%20CFO%20Presentation%20transcript.pdf?dl=0)which was essentially the kickoff for Stephen Kelly's plan. Important to note that under Kelly, Sage moved from a regional to a global operating structure. Before his hiring the company had fairly independent regions.

Here's the latest reported Sage Live numbers that I pulled from the Sage FYE 2016 earnings call slide deck -- it appears that Sage dropped Sage Live KPI from 2017 reports. If you read the Capital Markets Day Hare presentation you'll see that Sage set expectations of 1 million Sage One (reported 403,000 in FYE 2017 earnings) and 40,000 Sage Live customers. This slide shows that in Q1 2017 Sage reported 600 Sage Live. I could not find a report for FYE 2017 as Sage appeared to remove Sage Live as a KPI.

Is there anyone in this group or does anyone know of anyone selling and consulting with Sage One? It seems to be a well-known product in Europe. The UK is requiring companies to submit VAT taxes electronically beginning in April 2019. The program is called Making Taxes Digital (MTD). The accountant for one of my customers that does business in the UK mentioned that Sage One had an API for the MTD VAT tax compliance. I have checked and Acumatica does not have an API (yet).

Sage One was referred through CPAs. It was meant to draw them off of QB. It was also aimed at very small firms. Neither of these groups have little if any overlap with our members.