General Consultant Discussion

Here's my initial cut of verbiage to notify customers of the Sage maintenance changes. Attack it. Effective with maintenance plan renewals on or after March 1, 2012 Sage have indicated they will eliminate their Bronze maintenance plan option and move all Bronze users up to Silver plan. The Bronze plan is the one used by most of our customers and until Sage abruptly discontinued it allowed for only upgrades with no help desk access to Sage. Under the new Silver plan the cost difference will be roughly 3% (Bronze was 18% and Silver's new price is 21% of product SLP). In additional to the normal plan benefits that Bronze previously offered Sage will add very limited help desk access. In short, if you were previously on Bronze maintenance, expect a 3% increase in the cost of your annual plan if it renews on or after 3/1/12.

No specific mention of the 5 included support cases? Maybe add some language like this: ""As part of the Silver plan, you will be eligible for five support cases with the Sage help desk. Many customers find this help to be sub-par but hopefully you will have a different experience. Fingers crossed! Also, please note that you will want to make sure you back up your system before calling as many customer have experienced data corruption after following the Sage help desk advice. Finally, you may want to carve out a half a day or more if you find the need to call Sage help desk as tens of thousands of customers will all be receiving the same five support cases in this Sage-mandated change and it is unlikely that Sage is increasing the size or skills of their help desk team. If you wish to thank Sage for this Excellent Customer Experience, you may contact pascal.houillionon@sage.com."" Slight sarcasm above because that's the mood I'm in.

Love it! I plan to increasingly play up the participation in 90Minds and the fact that Sage have released products with bugs which if you were solely on Sage support you might have been advised by Sage to install -- and regretted. The Sage calls will be spun as more help desk , administrative, FAQ type access -- though I don't plan to mention much about them other than the customer will have access to a very limited number.

Good or Bad you need to mention how many cases they get

Why? They have limited access to the help desk. Period.

It's too vague

I agree with Mark. If you are going to trigger the trap, trigger it - don't try to partially avoid it. Customers will want to understand what those five cases mean and, unfortunately, many will want to know why / if they should continue contacting us.

The customers never called Sage before --- why put the possibility in their mind now? I assume that Sage will do plenty of marketing around this - there's no reason for the partner to reinforce this play. It's somewhat similar to how the President of the United States avoids being photographed with scumbags because it lends importance to them... I think by spending any amount of time even explaining this I am giving it undue importance.

Sage will be putting the idea in their mind. Also for a lot of customers, by virtue of being asked to spend more, they will dig into the paperwork and read the list of ""benefits"". It seems that your idea was to ""attack it"" so I'm surprised that you don't want to jump out in front of the grenade before it goes off. I really don't think wishing it away or hoping customers will disregard it will work as a strategy. I mean ... it's MY strategy but I expect better of you! :D

That's what I was thinking. Wayne is always so up front and honest that he gets customers due to the 'too honest' factor. It's not 'dishonest' to not tell them, but it reminds me of how a politician would answer such a question. And yes Peter...from both parties.

Aside from changing ""very limited"" to ""5 contacts"" -- what else would you expect? I'm certainly not comfortable giving Sage a testimonial about their support department and I'm sure if I give several paragraphs about how their support is actually damaging that I'll be hearing from Sage within a week or two.

How about something like, ""Sage will add very limited help desk access with 5 cases. As always, I/we will continue to assist you with our extensive access to like-minded partners through our 90Minds partner group. Blah, blah, blah...

What about something like. Please keep in mind, Sage Support is for basic front line questions about things such as an error message. Do not expect them to advise you on best business practices or implementation questions and they are technicians working from a knowledgebase, not experienced field consultants with decades of business experience.

Nicely put, @MarkChinsky!

I'm probably having a senior moment (or day), but I think if you start with an 18% maintenance cost and you take it to 21%, the 3% difference nets a 16-2/3% increase in the maintenance dollar cost. Assuming the list price doesn't change at the same time.

This is really going to increase the number of smart companies that go off of maintenance. At this rate and counting the time value of money you are now down below 5 years where you have saved enough in not paying maintenance to buy the software again if you really need to upgrade at that point, and come out ahead if you catch Sage on an amnesty period/winback promotion.

Here's another draft - a little easier to read - feel free to add/change; http://willyou.typewith.me/p/sage_maintenance

I think the silver plan used to be 20%, not 21%.

And it seems there is always an amnesty every 6 months. Plus what does sage up their sleeve for the future of this product if there is any

I think at this point there are two primary types of customers: 1. MAS90 is strategic - 10+ user wholesaler, job cost or mfg (Job Ops) 2. MAS90 is the incumbent but switching costs are too high Customer type 2 is the one that I think we'll expect to more strongly consider dropping maintenance.

@Phil McIIntosh - Silver plan used to be Basic plus $1500; an additional $1500 took you to Gold.

Since 2000, the channel's relationship with Sage could be characterized as adversarial. Ron Verni embarked on a disastrous acquisition spree, which recently resulted in a $250M loss by Sage in the form of the Healthcare Division. We're still paying for past mistakes. Ron Verni and the lousy management team that he put into place, and the lousy management teams that followed him, have put all of us in a hole, and we're not going to dig ourselves out of it unless we all work together. And yes, that means working collaboratively with Sage. Do I like the M&S margin change? Hell no. But I also recognize that it was inevitable. M&S margins industry-wide are around 20%, so for Sage to pay 40% or 35% to the highest tier partners is not a sustainable model. Do I like the sunsetting of Bronze Plans, and their replacement by Silver? I'm OK with that. The modest access to the Sage help desk is comforting backup to most end-users, particularly if their reseller is a one or two (wo)man shop, and the support cases will go a long way toward preventing resellers from having to pay Sage for additional support cases. DSD Business Systems will market the new Silver Plan access as a dependable source of backup support for our end-users, and for an additional 3%, that's a small price to pay. The quality of the staff on the Sage help desk has gotten noticeably better in the past 6 months, so I'm hoping that the new Silver Plan access is going to be more effective than it used to be. You could certainly look at it as Sage asking our end-users to monetize their resellers' support case allocations. My big gripe with Sage is that there are always takeaways, but there are no givebacks, particularly in the form of product development and functionality. Sage, are you kidding? How the hell do you expect us to aggressively market and sell a MAS 500 product that is written in an obsolete programming language? How do you expect us to maximize new license sales without a cloud product? How do you expect us to keep Accpac end-users on support, when the next release of the product will have been delayed by two years? How do you expect us to sell new MAS 90 licenses when it takes 7 or 8 third party products just to meet a ""standard"" distribution user's functionality requirements? So, we're on board with the latest changes for now, but if we don't start to see some major investments in product R&D, then all bets are off. Until that happens, DSD is going to work collaboratively with Sage. We'll support their initiatives publicly, and we'll keep our fingers crossed that their massive organizational transformation bears fruit sooner rather than later. So far, I'm optimistic.

I'm in agreement with all your points @DougDeane except the mandatory Silver Plan. I think it's customer unfriendly and partner unfriendly. Why shouldn't a customer be able to choose if they want those plans or not? It's not as if the weasels at the outsourced renewal group don't push, push, push for the higher end plans. We also have to realize that on the Accpac side, they number of support cases has been limited for a long time now. It hasn't been a problem on that end, so why is it going to be such a problem on the MAS side? Putting all that aside, it's insulting to tell customers that Sage knows what is best when it comes to support. It creates a lot of unnecessary conversations. And ... not sure where the rest of you stand but most of my customers don't see the value in the 18% they pay. I've already spoken to my three biggest customers and they started asking what the penalties are for dropping off support altogether. What a cluster **** situation created for such a small cash grab. And I forget who said it above but ... it's not a 3% bump people. It's a 16.6% bump over what people are currently paying. If someone is paying $10,000 annually, they will now be paying $11,666 (roughly). Where oh where will that extra revenue go? To the shareholders is my guess.

@PeterWolf we could also argue (and I did) that requiring any maintenance at all versus allowing people just to buy the upgrades piecemeal is unfriendly and partner unfriendly. Customers don't want to install these upgrades which have gotten materially worse (bugs) and the features now are all over the place so that no one human could possibly sit with a customer and give a top to bottom overview of what's been added since 4.30 unless all they did was upgrades 24 x7 (and if they did that when would there be time for Sage webinars , conference calls and training?)...

Right. I think the solution is a Tin Plan. If you want maintenance (upgrades) only, it's 10% or 15% of SRP. All you get is a link to the current versions of the software and well wishes. Make it dirt cheap so they stay current but aren't obligated to upgrade. Partners can choose to support older versions if they choose - and maybe they charge a premium. Or Sage themselves allow on demand call-ins and charge premiums for older versions. We have to remember that Sage's connected services requires a good, solid database. Giving people a cheap way to get the bare essentials (the software updates) allows Sage to have a database that is self-maintained. It's worth gold to the idea of marketing connected servcies. Every time a customer chooses to drop off plan, they become invisible to Sage. Marketing SPS, CRM, Payroll, Collections Management, whatever services Sage is cooking up becomes that much more expensive to off-plan / non-customers. They are sacrificing the golden database for quick cash. They are also going to dampen their efforts to return people to on plan. It's going to be a long-term problem for them.

Oh, they are going to hire tons of programmers and rebuild the software... Ha!

I thought they were going to hire tons of top-notch quality Sage tech support reps to handle all the incoming requests from end-user n00bs.

Executive bonuses are paid on quick Results, not long term strategy

That almost sounds like the political climate in the US -- look for short term quick results not long-term strategy. But then again, if I said something like that, it might make Mark want to post in the political fun group.

Here we go...:)

Peter - When I say that I'm OK with the Silver Plan change, what I really mean is that that's not a battle that I think it will be profitable for any of us to fight at this time. No matter how much crticism Sage receives from its channel partners, who Sage perceives to be less smart and less adept at selling, they are going to pursue that course until they determine, via reduced renewal rates, that it was a mistake. Going public against their plan would not begoodfor anybody's business. Like it or not, we are still at the mercy of Sage's good will. What I have a problem with is the quality of input that they'regetting from their BPAC. Sage says that the various BPAC's, to whom they floated this idea, were all in favor of it. I don't know if that's true. Is anybody on this list in one of those BPAC's, and if so, what really happened in those discussions??? If it's the case that the BPAC's were in favor, then Sage obviously needs to rethink the makeup of those committees. Peter, you said that customers would not be willing to pay more for a plan that they currently feel isn't worth the money. That's the Catch-22. Sage cannot generate more revenues without investing in product development, and they cannot invest in product development without generating more revenues. At this particular moment in time, all of Sage's MME products are tired and are technological laggards, so I'm banking on the fact that Pascal H. appreciates that, and is working toward reversing it. But we're also hedging our bets by looking at other publishers. There's no perfect publisher out there, or perfect product, so we're going to do the best we can with the hand that we've been dealt, but Sage has already heard from me about my strong concerns about their product quality. We have a 27 year relationship with Sage, so I'm not ready to abandon them just yet. We'll do our best to sell Silver Plans, we'll look for ways to make up for the lost M&S margin, and we'll keep our fingers crossed that we see a commitment to R&D. If business partners have strong objections to any of Sage's policies, I highly recommend sending those thoughts directly to Sage. If enought of us do that, maybe we can effect some change.

Doug - those are some very good points. I think @WayneSchulz has hinted at the real move for Sage regarding the products. My guess is that they are tightening the belts to make an acquisition of a web-based system. I would not be surprised if we don't see Intacct or some simliar product join the family this calendar year. Historically Sage has never shown an interest in re-investing cost savings and revenue boosts back in to R&D. I don't see that changing. It goes back to shareholders so the CEOs and execs can keep their jobs. It's easier to justify an acquisition than R&D I guess.

I doubt Sage looks at the maintenance revenue from, say MAS90 and says, now we have to take a portion of that and put it back into the product. My guess is it all goes into a common pool. Then they look at which product has been neglected the longest that has a large maintenance install base and they sprinkle a few dollars into it. Usually in the form of an underpaid ISV acquisition and hopefully one they can leverage across multiple products or one that comes attached with a recurring revenue opportunity. IMHO, Sage CRM is Sage's primary CRM play, and X3 is their primary NEW NAME ERP play. MAS90/200/500 (screw the new names, I give up), Accpac, and the 50 something other dead on the vine products will stay in this 'trickle out mode'. As Wayne said, they also probably have to make a SAAS play. They may or may not believe in the market, but the valuations companies in that space are getting on wall street can't be ignored, justified or not. That being said, there is probably a huge internal battle between two sides: One side being the classic Sage that says acquire the cheapest product in the market, not the best (i.e. Alchemix), vs. another that says, this is Hail Mary time and cough up stupid valuation dollars for an Intacct or Netsuite type player. And that folks, is where your customer's MAS90 maintenance dollars will be going besides back to the investors so the the execs get their big bonuses..