General Consultant Discussion

Press on Blytheco acquiring Netsuite

I'm not really sure what point that Dennis scores with this article. Yes it's a move by Sage partners to diversify however this seems to me to be more of a channel wide issue to adopt cloud. The problem is more long term and most realistically if Sage doesn't have a cloud offering they'll capture less and less VAR attention in the future years. (Full Disclosure: I am a part of the DSD group and I believe Bob Scott is reporting that DSD has picked up Netsuite as well).

Blytheco is sort of a big deal in my mind. They were all Sage. Then recently they picked up SugarCRM. Now Netsuite. I've publicly been shaking my head over Sage permitting, and encouraging, the consolidation of the partner channel specifically because it permits the decisions of a few CEO's to completely change the nature of its channel. Like this. I hope the Blytheco comments reported in Dennis' article about Sage 100 and 200 echo loudly through the halls of Irvine. True or not, it is the perception of many ... and perception too quickly turns to reality.

Microsoft is pursuing a similar ""master VAR"" type strategy where regardless of the business form they are seeming to encourage consolidations of what used to be many different partners. I'm also unsure what great value this brings to Microsoft/Sage though if I had to guess there was probably a meeting somewhere that said: a. Our products don't integrate without a lot of labor/knowledge b. Small VARS often lack that knowledge to make integrations /cross sell c. Bigger partners can go after a broader spectrum of opportunities I'm not entirely sure that any of those three things will be found to be true however I think at least in small part it's how the publishers think.

Might be. From a purely business strategy and fundamental economics perspective, I've never been able to see how this is a stable model. I'm not familiar much with DSD, so I'll use Blytheco, which I think is a reasonable, long-term focused business. I mean no knock on it. The thing is this: it has multiple offices spread across large geography. It has centralized/regionalized sales. From the economics view, how is this not the same as Sage having regional offices? If it is the same, then why doesn't Sage do that? Why doesn't any SME vendor do that? I don't think vendors do that because that local network model doesn't work after the original sell-out partner moves on (~2-5 years). I also suspect that support of that model is part of why Sage hasn't come off its 50%+ margins to the big guys - it part of the cost of supporting it. I might be dead wrong on that economics analysis. But there is more business history in the past 25 years to support my analysis than dispute it. One sign it is not long-term viable: there hasn't been a successful VC-backed or publicly held network. There was probably a discussion (or 3) as you outline. But I think it was a combination of laziness and misunderstanding how local partners work that drove it. They would have been better off in many, many ways to figure out how to develop that needed expertise in the channel without creating behemoths. I think their efforts at training on marketing and business development lately have been outstanding, and the Virtual Lab approach for tech training has been very effective. Anyway, I just like puzzling over things like this. Keeps my brain cogs moving.

I think part of the reason is that smaller engagements (measured in less than 6-9 months) are very difficult to manage remotely UNLESS the people doing the work are also owners or being supervised by owners. With remote connections I think a lot of this is changing. Customers are now more accepting of remote relationships than in the past.

Good point. Long term, when today's 35-yr olds become owners of businesses buying the ERP-CRM, on-site will certainly weigh much less. I prefer to do everything remotely, but I've come to see that the f2f human interaction is pretty much essential at certain points. I don't know that Skype meetings can really replace it. Thanks for the feedback. I have something new to chew on.