General Consultant Discussion

Not trying to be a Sage apologist here but stick with me for a moment ... The more I find out about Sage Life, the more I think there could be a big opportunity here for partners. Here's what I'm seeing (feel free to draw your own conclusions): 1. Sage is investing big time on development and marketing. Bigger than big actually. 2. Sage is catching the interest of a lot of the key influencers in the world of accounting. For any of you who are friends with CPA sorts, look at your Facebook feeds. Look at Twitter and other outlets. It's real. 3. Sage is serious about Sage Life. This is their huge bet and they are moving fast on it. This isn't the same old Sage taking three years to decide if the wallpaper should be green or bright green. 4. I've had a few conversations with the new management, Rich Spring and Craig Campel, and I believe that they are earnest in undoing (or at least mitigating) the channel damage done by Pascal's reign of terror. 5. From what I've heard, Sage does want to do more direct business. They also want to do more partner business. 6. Despite my own well founded cynicism, the Sage Life product is real and it is going to start shipping soon and they intended to rev quickly and often as they start to get feedback. It seems like the powers that be are very inspired by The Lean Startup methodology. Form your own opinions of course but it might be a good opportunity to breathe some life into our practices as this is going to be a new customer acquisition strategy. The big remaining question is: are the opportunities Sage 100 equivalent or Sage 50 equivalent. We should know more at Summit. Discuss.

Unfortunately for Sage, many of us have already gone down a different road, have invested in it and are committed to it. We cannot wait for what is at this point marketing hype and vaporware. Sage is behind on introducing this type of package and will be behind the existing players who continue to enhance their products.

I see Sage Life as an opportunity ... to unify the cynics. Old dogs and new tricks. By the way, what is Sage Life? Exact or approximate answers will be accepted.

I hope you are right Peter - that Sage is committed, and sincerely intends to involve the channel partners in the sales cycle. Compared to the bs and hyperbole we have become accustomed to over the last few years it would be a welcome surprise.

This is just Sage's latest thing. It will possibly succeed, but they will continue to make changes to the detriment of the channel, because that's what they have been doing for the past few years. I am frankly tired of it and would rather represent a software publisher that values their partners and demonstrates it every day. And if it does not produce the results they expected, something else will come along and we would have wasted our time learning it and losing face with our customers. It is not a healthy relationship.

Sage Life may succeed. They have identified a niche - global accounting for 10-100 user companies which is delivered from an app running on the Salesforce1 platform. I do not argue that Salesforce has HUGE attention. They attract 135,000 people to conferences. 20,000 people to roadshows. Absolutely no argument - Salesforce is HOT. Very hot. This [unofficial math predicts 2.5 million paid Salesforce users](http://www.quora.com/How-many-subscribers-does-Salesforce-have). So Sage is going to sell every one of them plus 1.5 million more. (Note: If you watch the [Capital Markets Day video](http://capitalmarkets.sage.com/) I believe CEO Stephen Kelly quotes 3 million Salesforce users in the opening remarks). Will that transfer to Sage? That's really the entire question -- and I'm not sure anyone knows. Sage sure better hope Sage Life takes off because the careers of a few executives depend upon it. Here is some food for thought: a. This **isn't the first time Sage have hitched their wagon to technology** . Remember [when X3 came ou](http://erplife.com/2010/01/20/sage-erp-x3-v6-launch-notes/)t (or rather was re-branded from Adonix) and Sage saddled up to Google gadgets or widgets or Netvibes? [Remember the Windows Phone sexy demos at Summit](https://youtu.be/Q_vB_zRSxI8?t=1h1m4s). How about the Sage 100 launcher which was meant to mimic the Windows launcher. What about [Azure as the holy grail of cloud](http://www.computerworlduk.com/news/it-vendors/sage-partners-with-microsoft-azure-target-cloud-market-3355821/)? Shall I keep going on or is one forgotten initiative after another convincing enough? Yes - technology changes and Sage must change with it - no argument. However at some point you've got to place a bet correctly --- or go broke trying. A broken watch is right twice a day. **Sage needs to be right more often**. b. **Are Salesforce users accounting purchasers?** Looking around at the Salesforce World Tour NYC - I saw what appeared to be lots of sales folks (ok - so technically people who looked as if they were in sales). I am not sure sales people care about buying accounting (I'm pretty sure they don't). I don't have as much experience in the area of CRM purchasers (ie - who makes these purchases) though my strong hunch is that it's not the controller or CFO in MOST cases. c. **Sage is predicting 4 million Sage Life users/companies** (they were a little vague on what the 4 million would represent). They didn't go into specifics on timeframe but made it appear as if FYE 17 was their target. The KPI is out there now. Sage will be measured against it. d. **Sage One is/was a disaster. Failure. Full stop.** Only 115,000 users as of HY March 2015. And this number was partly achieved by re-badging some other products with the common Sage One name (different momma or dadda - but let's count the app as a Sage One sale). This is one of Sage's only ""invented here"" products. Sales prediction by Sage at Capital Markets Day 1 million users. So within 2 years they are going to grow Sage One almost 10x? e. **The concept of competition has been conveniently left out**. Microsoft will almost certainly offer a very similar type platform and will **market much more directly into the type of customer Sage Life pursues** (10 - 100 employee companies). **Intuit will almost certainly either piggyback this or develop their own platform**. Don't underestimate this. **Salesforce plays in a different sandbox and is decidedly more expensive** than what typical small businesses are used to paying. f. **I disagree that Sage have won the mindshare based on the twitter activity of Sage employees, hand picked friendly blogs and guest speakers at Summit**. I have been watching this closely via hash tags and don't see any indication that this initiative is better/worse than prior. **Go [look at SagePLC YouTube videos ](https://www.youtube.com/user/SageGroupPlc/videos)where view counts are listed for many of Sage's videos. I think they struggle to exceed 1,500 on most of them.** That doesn't strike me as a product that is taking off in terms of shared buzz. g. Given Sage's predictions: 1 million Sage One 4 million Sage LIfe It seems likely that **the past few years of ""every deal is an X3 deal first"" will shortly become ""every deal is a Sage Life deal first"".** That's just pulling sales out of one category (of which Sage already has 200+ products) and putting it into another. Sage says they won't get rid of their old products. They'll probably just watch them fade away from neglect. While they haven't updated R&D spend for Heritage products - I'll bet that the number goes under 5% (heck someone has to pay for those new customer centers and Sage Life salespeople). In short - I don't know if you're right or wrong about Sage Life's prospects - just that there are a lot more variables to consider. And yes Sage is going to try to rally the troops to give out positive vibes but I think there are a **lot** more partners with @JohnHoyt thinking. **PS**- I am **completely unimpressed and unmoved by Sage's continuous announcement that they are breaking down silos, one Sage, blah, blah, blah**. They have been saying this at least since the Lori Schultz days. Every executive who replaces the last failed executive(s) says it. The problem is that nobody at Sage have done it - only talked about it. And , yes, after each in a succession of charismatic/vocal leaders comes on board we are all really sure that this time is going to be ""the time"" that Sage gets it right. I hope for our sakes -- and Sage's -- that Sage finally gets it right.

What concerns me is contradictory communication from Sage: Per @PeterWolf point 5 ""Sage does want to do more direct business. They also want to do more partner business."" Per @WayneSchulz ""global accounting for 10-100 user companies which is delivered from an app purchased in the Salesforce App Store. "" If Sage Life is purchased by downloading an app from Salesforce how is Sage doing more partner business?

@DougHiggs - I don't believe that Sage wants to build out a services company. They don't scale as quickly as software only companies. @WayneSchulz - the calculations for Salesforce user counts is interesting. At the Microsoft conference, they stated they have 44,000 customers and 4 million end users on Dynamics CRM. Assuming Salesforce has a similar company : user count ratio, the user count would actually be a lot higher. Who can tell for sure?

I have not found Salesforce to have many raving fans in the SMB market. In many cases management agrees to let the salespeople have it to appease them. Then they complain about the cost. Some companies don't even realize that it's a CRM! When I am leading with accounting and distribution, because that's what they asked for, I soft sell CRM in those cases, but when they say they are using Salesforce they admit they really don't care for it. And then the cost comes up. With large companies, like Sage, Salesforce is considered a necessary evil from my discussions. Sage is going after the SMB market, so based on my findings, I'm not sure Salesforce is going to drive users to Sage Life.

[Steve Hare CFO slide deck from Capital Markets Day](http://capitalmarkets.sage.com/pdfs/Steve_Hare_presentation_slides.pdf) shows 4 million customer target / 200 pound (I think about $300 US) revenue target. If you watch only one video from Capital Markets Day - [check out 1:38 where CTO Klaus Michael Vogelberg looks like a deer caught in the headlights ](http://capitalmarkets.sage.com/)as he explains Sage Life. It's awkward at best.

@PeterWolf And we are left out of the profit and maintenance from the sale of the product.... It won't put me out of business but the Sage view of ""partnering"" has been and is changing. ""Partnering"" means Sage keeps all of the profit and we scramble for the service revenue that they don't provide in the maintenance plan. Our piece of the pie is always getting smaller and Sage always has a bs story to justify it.

I think Sage have left themselves an awful lot of wiggle room. Sage Life not meeting 4m customer target? Heck let's re-brand some products and call them Sage Life. This is a trick that Microsoft pulls quite a bit in their financial reporting as well. Sage already did that for Sage One by rebranding some of the existing products. This type of stunt would fool most analysts but it's usually not enough to save jobs of the executives running the projects.

My outsider-looking-in conclusions: 1. Sage UK realized ~18 months ago that it wasn't going to hit its strategic targets. In particular that Sage One was lagging technically and functionally. Also, that X3 was harder than expected. 2. Sage has nearly all legacy products WW. (1) raised the flag that its current path is not the one out of the maze. To its credit, the board then dumped the Frenchies and Finance guys and found somebody who understood sales and significant change management. To me, the single biggest wildcard in all this is Kelly; his presence means all the Bayesian priors are likely wrong to some degree. 3. The SF strategy is, I think, a brilliant way to make the most of a bad hand. Making Sage Life succeed is essentially a marketing effort, not an engineering one. The level of complex programming necessary to make a SF app work is not nearly the same as X3 or Sage 100. And such development is pretty attractive to both the development and marketing community. So Sage can use that to have a shot at hiring new blood who might have some chops. 4. That said, Sage has a very weak track record at being able to spec out and execute on new products with features complete enough to move the dial. That is a marketing (prod mgt) problem. Given Wayne's observation about the CTO's reaction, I don't think UK has sufficiently dealt with this. 5. Peter's conclusion that Spring is for real is a big deal. He was likely hired knowing full well that he must revitalize a skeptical channel to both hold onto legacy customers as long as possible AND generate enough support to make Sage Life succeed. (I think Spring's long experience with Symantec's channel will be a good indicator of the sort of channel Sage expects to have in 5 years.) 6. ""Revitalize the channel"" doesn't mean a return to 2005. SF has a very active and effective consulting channel, and SF couldn't exist without. Yet SF pays their channel nothing. I see no contradiction between ""revitalization"" and ""continued margin declines."" MS CRM OnLine recruits new partners essentially saying that they aren't paying much in margin, but a partner has significant consulting opportunities; Sage will keep moving closer to that. 7. I think more heads must roll for Sage to have any hope of pulling this off. Development, both tech and marketing, in the sf world is very different than the one Sage inhabits now. Kelly seems perfectly willing to churn in order to get people on that program. But I think it's the only way they can produce a product; this is my ""wait and see."" I agree with Peter. And I think he is saying, ""Let's watch this closely because it is different."" I will. But even if Sage Life turns into the greatest thing since sliced bread, it will still be only one option in our consultants toolbox.

Even if Sage Life is a big hit, it's about as meaningful to you guys as Xero or Freshbooks. This sounds like the pizzaria market software, sold direct, rented monthly with nearly 0 financial interest in it for you guys. If Sage wants to become a direct competitor to Intuit, that's their choice. Unless you are big shareholders, their success or failure with this isn't in any way connected to you and your family. It's like people who get all Apple Evangalist on me. How does making Apple corporation more successful benefit you?

I agree Mark. Sage will sell Sage Life direct and includes support in the subscription price. We are officially cut out of the revenue stream. The reason the Sage big shots are telling everyone that they want to repair relationships in the channel is to keep (stall) the herd from running for greener pastures. They need to milk all of the maintenance revenue they can from the legacy products to finance X3 and Sage Life.

Should we all get Cow masks and run out of the keynote speech?

LOL. For sure @JohnHoyt .