Sage News and Discussion

I keep hearing that non-core really may mean non-core - in other words don't be surprised to see non-core products sold off if the opportunity arises. If you receive an email from Sage with an early announcement about any of these products please do share.

The above image is from the last Sage UK earnings call where they laid out their core vs non-core product lines. I believe this was a near total surprise to Sage North America who were forced to backpedal and explain the meaning of the word non-core in ways that did not make it seem as if products were up for sale. Bad move by Sage UK - and in my personal opinion non-core is exactly what you think it is...

It's interesting to see not for profit on that list.

Maybe due to the language barrier they feel that not for profit means not profitable!

Could well be. Your conjecture that UK sprung it on NA might well be true; it fits with the reactions I've gotten from Scottsdale. However, SalesLogix seems far more entwined with X3's customers/prospects than Sage wants to admit. There is a strong sData-based integration with X3, and X3 customers waiting for it. Also Timberline and MIP speak to specific market segments, with the attendant marketing focus needed. SalesLogix is cross-market, and has stronger demand in larger customers than Sage CRM, at least for now. I'm not saying you're wrong. Just pointing out that the dynamics differ. Meanwhile, prospects who want ERP, and ""oh, by the way, CRM"" seem to choosing NetSuite because the whole thing is cloudie. And the ""attach rates"" of CRM to current Sage customers shown last week are under 5%, even for CRM-savvy BP's. They're doing their best to put lipstick on a pig.

@JerryNorman - I think the low attach rate of Sage CRM in North America is attributable to many factors. Not the least of these factors is the fact that the Scottsdale group tried to smother it in its crib when they were put in charge of it. And Sage CRM will be the preferred CRM integrated product for X3 very soon.

You're probably right, Peter. I'm not trying to whistle past the graveyard, just flesh out some nuances. The most telling evidence to me: after ~4 months, no further clarification of the non-core, nor organization of non-core businesses into a permanent reporting structure. Although Construction still reports to Langner.

Saleslogix is reporting to the CFO I believe....

Which is usually the last stop before the taking the cattle to the auction barn...............

FWIW, the CFO and Scottsdale vociferously deny any intention to divest. At Summit the CFO basically said it would be resolved after December. The part that is odd is the lack of clarity by UK after a move like this. Every case I can remember similar, the parent has stated at the time of the status change announcement what they intend the fate of the secondary BU's to be. Not here. Further, they were clear about sun-setting some products, but no non-core ones. This limbo they've left these BU's in doesn't do anybody any good. Competitors spread FUD, essentially eating into the value of any spin-off. If they use this to milk profits from the BU's for the other divisions, that also decreases the sale price. If they were publicly announce the intention to divest, then the SLX/ACT operation could more forcefully talk about its strengths to the market, and why the divorce is a good thing. Despite consistent, and exasterated denials, odds are, SLX will be out of Sage eventually. This approach to getting there just shows how incompetent UK is at both strategy and execution. Regardless, Scottsdale folks are thrilled to be no longer dealing with Irvine.

where did this gem come from?

I'm dealing with the FUD now with a good (100-seat!) international prospect that is now likely derailed because of UK's ambiguity. This letter was produced at my request (although I think Wilzoch already had the file and just had to print a new copy with current date). The way Sage is handling this is infuriating. I was in AZ for training 2 weeks ago. There was NO indication of ambiguity from Sage employees on or off the record. This isn't playing out the way I usually see it when BU's are cut loose. Since that scenario has a pretty well-defined playbook, and yet this seems to be not following any of those plays (except the CFO), I can't completely write off the idea that maybe they aren't lying. If they are going to sell it off, then they should get back with the playbook, because there is a reason those plays are tried and true. No wonder UK gets no respect from analysts.

I think Wilzoch is extremely smart and is playing this the right way. Whether or not the group is going to divest is irrelevant to daily operations and people need to focus on executing smart strategies and making sales. In many ways, being part of ""non-core"" allows these business units to operate more nimbly without having to check in with every other department head before moving forward with plans. This should allow them to make even more money for Sage NA (or for some other owner if that happens).

Thanks Jerry - interesting information as always. Since I don't believe that North America is fully in control -- I'm still leaning toward interpreting non-core in the exact way that Sage UK themselves laid it out. Is it a translation issue? Perhaps. Although I think the entire earnings call is available on webcast (or was). IMO non-core in any language does not spell something good.

Wilzoch is a smart guy. He looks awfully tired lately, too. Wilzoch's direct reports are fond of saying they aren't ""non-core,"" but rather ""liberated."" At this point, SLX would probably do better without Sage. But it's hard to sell prospects with the Purgatory status.

Interesting explanation of non-core here from NZ - basically less R&D http://reseller.co.nz/reseller.nsf/news/sage-gears-up-for-aggressive-growth

Pull quote from that article: According to managing director Mike Lorge, ""60 percent of partners [in ANZ] grew in 2012"" and, of those, the average growth rate was 76 percent. ""We want to help you grow. We only grow if you grow,"" he told partners during the keynote. **** 76 % growth in 2012 for partners?! That's amazing and makes me want to move to Australia and New Zealand. ****

@PeterWolf, I think you would have a difficult time picking up a second language.

Just was looking at Sage NA web site - looks like Mark Loupe is now EVP NFP and CRM -- not sure if there is a new CFO. http://na.sage.com/sage-na/company/Management-Team/executive-team/Marc-Loupe

@JohnShaver - At 76% growth, I'll be able to hire some translators.

Wayne, that is exactly what I was looking for them to do. An EVP of those 2 units, at the same level as EVP Langner (and Langner has the non-core Construction in his portfolio.). I'm pretty sure this change of title is no more than 2 weeks old. I don't know that it changes the reality much, but it helps competitively at least. Also, the prospect I thought had gone away is still with us. In case you're interested, I attached the significant argument it took to show the CIO that they were concluding wrongly. It should be easier than this ...

About Loupe. This is an interesting intro: ""Marc Loupe started with Sage in 2008 as chief financial officer, responsible for North America's finance, accounting, acquisitions, divestitures, treasury, real estate, and procurement functions, A ROLE HE HELD UNTIL RECENTLY.