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Sage Capital Markets Day: Key takeaway: 1. What worked well for Sage before the Internet (? BI) - doesn't work as well now 2. Sage One, X3, Sage Life are Sage's focus - global, global, global 3. Very little discussion of North America - though there were North America executives on the podium

It took SAP a while to realize that global software is good, but local marketing is required. North American VARs used to roll their eyes when Georgia was comapared to Germany, New Jersey to Belgium, California to Japan, etc.. Every market is different in maturity, mentality and marketing approach.

Product categories now Growth or Heritage Heritage: Very little marketing, R&D, migration tools to get customers out Sage will not end of life products - so long as customer is on support and paying

Key takeaway: As per Kelly's opening remark -- Sage ""had a fantastic model before the Internet"" came along

This underscores what we have been saying all along that the CEO, Stephen Kelly for the present, is tasked primarily with keeping the shareholders happy. Local Sage sales reps, like Rob Larsh, vehemently disagree with me and claim it is all about the customers. That's the party line, so he can't say anything else. At this point, Sage is playing catch up against competitors like Acumatica that are years ahead. I would hope the analysts are smarter than to accept Kelly's explanations.

I don't think Sage has material numbers of analysts who follow them.

@JohnHoyt - I don't think it matters what his underlying motivations are because people only see the outward actions. In this case, as much as I am disgusted on behalf of all of the customers who trusted the channel and Sage, it's hard to fault the approach they are taking. Sage is bleeding customers. The last three years of neglect and price increases have just increased that bleed. They are now at the point where something drastic has to be done. Kelly is doing just that. Damn the past, forward the future. I'm glad that I have started the diversification process. I doubt there is a single partner out there that has diversified that has said ""oh dang, I really should stick by Sage to the end.

@PeterWolf Just the opposite - we can't get people certified fast enough on Acumatica. Unfortunately, being in a CPA firm, we have to remain chargeable. It is such a different experience representing a product prospects embrace. The only impediment is Netsuite, so it comes down to cost.

Did not mention Sage CRM once.

Kelly has a serious timing problem. Growth products won't be ready for real adoption soon, especially in SMB. (Sage One and Sage Life are for small ops, no?) X3 won't be ready to replace the 100/300 customers for a couple years, at least. I see little evidence that Sage has the capability to develop products internally, with the possible exception of Sage CRM. It will be tough to get from here to there, without significant financial challenges in the gully between.

@JerryNorman - I don't believe X3 will ever be able to replace 100/300 based upon its complexity and weight. SAP came to that conclusion with ByDesign as well. Just like NetSuite pretends to be Enterprise class, it is only if the complexity level of the business is simple. In the ERP space, you really have to put size and complexity on 2 difference axis and then draw the coverage area, and then to some extent by horizontal industry (manufacturing, vs distribution vs services).

@GaryFeldman essentially said ""Think globally, market locally."" With the Growth products emphasized today, it is not clear what Sage's channel strategy is. Clearly X3 needs sales organizations. From what we've seen of the Sage Life and Sage One, only CPA's might possibly be involved. If the only channel products are Heritage, Sage will find a rapid migration of Sage customers to competitors, encouraged by current partners. This challenge isn't only NA. All regions have it, but the products affected are different, of course. It might be that today's purpose was aimed at markets, with an audience that refuses to get much below power points. So they might be presenting regional strategies to deal with this at a later date. Sadly, it is really, really hard to keep really good managers/developers when the product line they work on is clearly not the company's future.

@GaryFeldman. I agree that you are likely correct about X3. But I think Sage might still think otherwise. If they agreed, then I think we would see more active discussion of the 100/300 replacement strategy. I think X3 was sold to Newcastle on the premise that it could soon move downstream. Probably still some execs at Sage seriously invested in that proposition. Until Sage 'fesses up to it, the 100/300 segment can't be shored up, probably not even then. I hope Kelly is getting most of his comp up front; he's likely to go through his 3 envelopes very quickly.

This blind squirrel is having problems finding nuts.

@JerryNorman - I think this statement might not be correct: ""Growth products won't be ready for real adoption soon, especially in SMB."" Sage is investing heavily and moving quickly with Sage Life. This is a pet project and is being given resources at a global level. They are deadly serious about it and are moving quickly.

I also think Sage Life will evolve into the migration product for Sage 100 / 300. Just my 2 cents.

That's it, I'm liquidating my 401k and investing in Sage Life!

CFO Stephen Hare presented some ambitious KPI updates: Sage One: 1m customers target (5 pound a month is avg revenue per customer) Sage Life : 4 million businesses about 100 pound or $157 US /mo - GA in August 2015 X3: Now over 5,0000 customers 3% growth However the timing is uncertain and no predictions made on when this would occur though Hare indicated if after FY 17 you don't see this happening then we have not executed. Installed base 6% growth (on prem) Also of interest during Q&A - Sage Hare admitted that half of the 6% growth was price. In North America most of the growth was premium support but that trend is running out of gas. Sage's latest report HY showed 115,000 Sage one paying subscriptions. I also think Sage has an unstated issue with Sage One in that they ""re-classified"" a few products to be named Sage One but they don't share the code base (sort of like claiming you have X Sage 100 customers in NA and Y Sage 100 customers in UK so that equals X+Y on Sage 100 but you aren't really counting the same product). Big issue here is that competitors are also moving and in come cases (such as NA) have far better brand recognition. I don't think Sage is going to reverse that mindshare but I guess anything is possible. What happens when Intuit announces a deal with Salesforce? Or does Sage have some type of exclusivity that they are not speaking about?

For better or worse, you should be able to use Sage Life in August. We'll see ...

Since it is August, I think I'll start holding my breath now...

I expect to see a VC own Sage 100, 300, 500, CRM before I see any material migration from those products to Sage Life but who knows.

No exclusivity to my understanding. I think they are counting on their focus to the SMB space to pull them through as the leading choice. Everything that I read about Sage Life makes me feel that Sage is going to be a giant third-party app developer. The difference is that - in theory - Sage Life will not actually require an investment in Salesforce by the customer. It will run apart from Salesforce even though it's on the Salesforce One platform. I guess the best analogy is that Salesforce One is like Windows - you don't need to be tied to Dynamics GP or Sharepoint to have an app run on Windows.

The other thing that was of particular interest in your comment above @WayneSchulz is the target customer accounts for Sage Life and Sage One. In my head, Sage One is the entry level product and it would have a broader audience than Sage Life. It really is hard to get your head around the strategy. I'm sure it's clear to the Sage Execs though ...

Thanks, @PeterWolf and @WayneSchulz . I misunderstood Sage Life.

A few of the presenters on stage had the ""oh crap here we go again with yet another strategy"" look. Or maybe that was me inserting my own ""yet another strategy"" into the presentation. The CTO doing the Sage Life presentation had a severe case of ""deer in the headlights"".