General Consultant Discussion

Here we go again! http://s216551651.t.en25.com/e/es.aspx?s=216551651&e=4221&elq=f5ffe50e403d4bf8b66d0e1e2e871bca

I feel a lot better knowing that Sage already talked to numerous partners and BPAC.

Yeah, I wonder what the hell this is about. Thanks for the chuckle Wayne.

Better focus

I am sure that it will be filled with glorious statements about how much benefit we will get by making more money for Sage!

Too bad John Hoyt can't talk about all the things he said to Sage...

What a joke... I am not wasting my time listening to the bs about how decreasing our margins is supposed to be better for all of us. Every six months it is another punch in the gut.

What???? @DougHiggs - You are SUCH a cynic!!! But probably dead on!!!! Input from partners and feedback from BPAC. Probably the same meeting where the PR fiasco was discussed...

[None of my comments are related at all to what I have been told within BPAC, because they never give us anything in writing and, honestly, I can't remember what the changes are going to be, so I'll be as surprised as you during the 10/8 session.] As long as you bring in new customer sales, you'll be fine, but if you don't bring in at least $350K - $500K (my numbers, not Sage's), then Sage will mess with the numbers to bump you down to a lower tier. For 20 years they have been changing the percentages, threshholds and rules to the detriment of the business partners that are below the top tiers. We have been caught up in that every time those changes take affect. I always feel like we have been singled out - ""Hutchinson and Bloodgood made it to Platinum, so we should increase the dollar threshhold to get them back to Gold where they belong, or John Hoyt might become too cocky."" After awhile we start to not care and continue to concentrate on our consulting and making sure our customers are happy, which is really what our business model is all about. If the stars and planets are aligned right, the economy is doing well, and several prospects coincidentally finally decide to purchase, then we may make some progress. Otherwise, it isn't worth losing sleep over.

I'm with @DougHiggs. I'll wait to read about it later. Nothing Sage can say will affect me anymore. I'm tired of the drama.

John has it basically correct, I think. I will probably listen in, because I am curious about how they handle the obvious issues, and whether they are brave enough to take questions on the phone.

I know it doesn't impact feelings towards Sage but now that I have a Microsoft CRM practice, it makes me appreciate the margins on the Sage side. If I do the same volume of sales with Microsoft CRM as I do with Sage CRM, I will make 55% less on year one and 80% less on year two for any given customer. Maybe with the new Sage announcement, it will be even ... but not in a good way. :S

In your experience so far, what is the relative selling effort for MS CRM as a % of selling effort for Sage CRM? Is the sales cycle longer or shorter? Do the consulting opportunities seem to be about the same?

Just as Sage thinks they are leaving money on the table for PR, they no doubt feel they are getting screwed by the reseller when compared to MSFT.

John Hoyt is on the money - this is your go-forward business model. Prepare for zero (or negligible) margins: ""After awhile we start to not care and continue to concentrate on our consulting and making sure our customers are happy, which is really what our business model is all about."" 1. Recurring revenues 2. Controlled by your company (ie - not a commission)

As was mentioned by Peter, Sage does offer some of the highest margins in the industries, much higher than Microsoft. All things considered I don't think the changes they are about to make are anything like what we saw in the recent past. They are trying to incent and reward those that are growing, bringing in new business and also those that align to their strategic objectives (including subscription). I was really impressed that current management did consider the BPAC's feedback and actually came back with changes to the program that favors the partners. I don't think we would have seen that in the past. They have corporate goals they are trying to meet, but they are also taking a longer view and trying to mend the damaged done to the partner channel. We may not like all the changes made but I didn't view the end result at a simple money grab like the changes in the past have been.

@BobKohlmeyer provides another reason to be on the call. Hopefully Sage realizes that 1. They need to provide a very competitive margin because their products are becoming less competitive and relevant in the market. They recognize that SalesForce creates buzz and Sage does not. They know that others are investing more in products competitive with Sage 100 & 300 because all their money is going to X3(?) or the shareholders. 2. Although subscription models have a lower % all are not as bad as Sage and Microsoft. I think Acumatica partners and I know as an SAP partner I make better margins on subscription than Sage or Microsoft offer. 3. Sage's margin tiers may look good, but the margins I make with SAP are often higher than top Sage partners due to a 50% gold base and volume discounts which are not always passed on to customers. Bottom line however is that the publishers are all becoming more callous to partners.

If the go forward business model is zero margins on software then the publisher can be responsible for all software sales efforts. I will sell and perform all of the services. Any questions or sales issues will be re-directed to the software publisher / sales team. This may well be a much better model for the smaller consulting organizations. There will be no need to favor partners that sell the most product. Attention and benefits will be based on customer service and customer satisfaction... not on who sells the most.

@DougHiggs - The question is really, ""What model does the customer want?"" If the customer wants to have a consultant supporting the software vendor, your model works great. If the customer wants one party to take full responsibility...???

I agree @GaryFeldman and we are being forced into a model that doesn't reward us for selling new product. Not our decision.

Gary's point is the heart of the matter. As much as we all feel we are essential, customers don't really want to muck about with consultants. If they could flip a switch and turn on their software and have an intuitive interface with a built-in coach to advise them, they would do it in a heartbeat. Software publishers understand that and are driving towards it.

To re-phrase my point: it's not the publishers against the channel. It's the customers driving the publishers in certain directions and we are collateral damage. Like printing presses, we need to re-invent ourselves for the new world.

@PeterWolf I am not sure about the CRM world because i know little about it. From an ERP perspective there is way more to it then auto-installing software. Business processes and configuration is where the value is. The software is merely a mechanism for the automation of the processes. Knowledge of the business and an excellent working relationship with company personnel is critical for success of any implementation.

I'm sure the printing presses felt that they would always be in need as well. The world moved on. Imagine a world where the publishers sell a vertical version of their software. Widget distribution in a box. All the fields, financial statements, automations, processes, reports, etc - all set up for that widget distributor. And they throw in some videos and training materials on best practices for widget distributors. Knowledge is consolidating quickly around us. Why would those widget distributors pay for Joe Consulting Inc. to re-invent the wheel with their business when they can point to a link, give a credit card, and get back to focusing on sales and operations?

I know what you are saying and somewhat agree but it will never ""completely"" happen just as printing will never completely be extinct, and email blasting will never completely replace a hand written thank you card. Most of my clients are distributors and some of the distributors are in the same industry, but no two companies process transactions the same way. Accountants were supposed to be replaced by accounting software too, but there sure seem to be a lot of them.

Can verify the market for existing users seems to be swinging from (a) we want to have a relationship with a VAR who we can call for answers to (b) we will pay as we go only for what we need. Increasingly heavy slant toward ""just in time"" use of consulting. This is not true for every company however each year there seem to be more and more in the PAYG club.

I agree with @DougHiggs . ""Business processes and configuration is where the value is."" Most of this has very little to do with the functionality or interaction of the software. Then there is the biggest factor - people. Whenever you have people involved (at the customer) you have emotional, political and illogical decisions and attitudes. As consultants we help to temper all of that, so they have a total solution that works for them.

I sure hope I'm one of the last printing presses left - what a world that will be.