Sage News and Discussion

Looks to me as if Sage have given up on growth through new customer licenses - and is hanging an awful lot of hope on cross-sell -- especially payments (which btw is recurring). Sage have stated they want to double organic growth by 2015. This could just be an article that focuses on one aspect (payments). I copied to Evernote because the source required registration. https://www.evernote.com/shard/s1/sh/09157f54-677c-4968-830a-350de1b3d6e3/dfa3099eef585b9c0722aa3dae8ee4e7

I think this would be a great strategy if the world around Sage was not changing as well. Also payments, while lucrative, is also going to be VERY competitive and that probably will drive the rates (profitability) down as well.

It cannot be more obvious what Sage is pushing if you review the nature of the promotions, such as platform upgrade at no product cost if you have an SPS account. This may normally have cost $12K - $18K without this promotion. Sage sales represents SPS as just another product to sell. This is how Guy Berruyer also represents this in the article. Behind the scenes, however, there are many pitfalls with regard to approval and potential issues with rates if the customer does not carefully monitor charges. Unfortunately none of these are disclosed to us or the customers until these events occur, and they cause relationship issues with our customers. I've asked our SPS Account Executive to send me details, and eventually he does, but acts like I shouldn't have to know. When I asked my Regional Sales Manager about some of these issues, he pleaded ignorance and actually referred me to . . . Joe Langner. Really? Does Joe want business partners contacting him directly about this?

I agree with you here John and think it's more important than ever that as we advice our customer that we lay out the pros and cons of all the options. The more we stay a neutral third party the better for us wrt our consulting relationship with the customer. I remember very vividly selling three or four EES deals to customers based largely on Sage's pricing. At the time I believe Sage miscalculated and severely underpriced these ""upgrade"" deals solely to prove that customers were ""adopting"" CRM and Fixed Assets. What happened for my customers is they bought EES but never installed CRM or Fixed Assets. So all Sage got out of the deal was a lower maintenance stream for a few years before they ended this licensing method. The traditional: a. Break Fix / aka pay-as-you-go b. Hourly ""we'll call only when we need you"" Are both sucker bets. In order to build any real business Sage consultants are going to need to have measurable numbers of customers under their own support plan which recurs annually. PS - I continue to believe the next Sage ""hot spot"" is going to be around keeping customers on a current version of Sage 100 (or any of the ERP). I believe Sage have underestimated how willing customers are to spend money on upgrades when there is no ready answer to ""what's better in this version"". At some point the customer is not going to want to keep paying upgrades costs for no new features. I also think the ""self install"" upgrade is not going to happen for most Sage 100 customers.

I do agree with @WayneSchulz view of the future. It will be easier for Sage 100 companies to find value in renewing an appropriate agreement annually with a Sage consultant than with Sage directly. And it's pretty certain that all of Sage's competitors will be following a similar strategy to develop their own connected infrastructure. But customers can only make decisions on alternative choices. Sage's subscriptions are high, but more or less match other non-cloud offerings. Functionality improvements are disappointing, but are there clear alternatives with lower price points for most customers? If I'm following the market comments correctly, Netsuite has strong non-mfg features, but its annualized price point isn't substantially lower from what a current Sage 100 customer is paying. While there might be a slow bleed of Sage 100 customers out, I suspect that a large number of those are either better fit with Quickbooks (Sage 100 is too big for their needs) or for X3 (cross-sell). If I'm substantially wrong about my pricing claims, I'd really like to hear why. (I don't doubt that I'm wrong, really!) I think that Sage's current strategy is more along the line of using the connected services and cross-sell stuff to tide them over to the time that a more appealing Sage One and X3 are available to push into new sales territory.

I agree with you, Jerry, regarding many Sage 100 customers being able to downsize to a package which is more appropriate for them. As for the remainder, I feel that only the large, complex operations will find X3 is the way to go. The others still require an ERP such as Sage 100, but they do not have the staff nor sophistication to handle the complexity of X3. Unless Sage can release an ""X3 lite"" that fits the operations of those core Sage 100 users, they will choose to stay with what they have.

Sage will sell them X3 and the next regime will sell them whatever is the flavor of the month. This assumes Sage doesnt sell North America (or chunks of it). PS - Wasnt Sage 300 going to kick ass and take names in this space .....?

@JerryNorman Netsuite isn't just consistant with MAS pricing, its FAR higher after a few years. And whatever pricing you are seeing/hearing about for initial new customers, virtually all are seeing huge increases when their 1 or 2 year contracts are up. Classic Cable or Satellite company pricing strategy. Sucker them in low and turn up the heat over time when its hard to switch.

Mark, thanks for confirming my suspicion. Of course, comparing Netsuite to MAS one must also factor in ~$85 pupm for the server/infrastructure. About X3, do we hear much current X3 partners about the product being really hard to extend to where customers want it? Is the feedback around X3 generally better than it was for MAS 500 at the same stage of development? What little I've heard is that X3's basic structure seems to be better for a longer run than MAS 500's. I talked to Erik Kaas at the 2012 Summit about both Sage 100 and 300. In the 2010-11 timeframe they had thought there was a clear way to make both products web extensible. by 2012 they'd discovered serious problems deep within that blocked that direction. It took them longer to find the basic flaw for Sage 300. Hence, the change in direction for the mid-road.