90 Minds Community

Sage dips their toe into the water and moves closer to eliminating perpetual on-premises as an option. Note that the traditional licensing is STILL available though Sage notes that they ""prefer"" the new subscription. End users can apparently still pay month to month - though that is not preferred and if they opt to go monthly they must use ACH and pay a higher rate than if they prepay for a full year. You may recall about 6 months ago rumors were circulating that Sage would do away with perpetual licenses as an option for reinstatements. As near as I can tell perpetual licenses are still available but Sage appears as if they are poised to go all subscription as quickly as they can prove to themselves that they won't suffer a revenue decline.

I always love the language used by Sage in these announcements... ""if customers opt for a three-year commitment, they will benefit from price protection for the three-year term."" aka - we plan to continue raising prices. Then they state the actual benefit which is a three month discount. Terms auto renew if not cancelled in advance, which must be another benefit of going for a longer term.

Apparently not everyone at Sage is on board with this. When I asked our RAM for subscription pricing on Sage 100 ERP, she tried everything she could to talk the lead out of it. It would be great to see this for Sage HRMS.

They will lose sales where the advantage of a monthly payment is lost, because that was the reason the prospect would sign up for that. To me, it makes no difference what other publishers do, because this was a differentiator for Sage.

I noticed on the e-mail they used the word ""exciting"". I failed to understand what part of the announcement was exciting.

With Sage CRM, it's getting hard to do anything except subscription because Sage keeps jacking the perpetual license price up. Right now, the break even is out at over six years. It's hard for a customer or for me to justify the perpetual licenses, up-front cash outlay. Regarding the RSM / RAM support for subscription ... they get paid the same way that we do. The subscription purchases mean less money in their pockets so it makes sense that they would prefer perpetual licenses as well. It shows the lack of a comprehensive strategy around the pricing. I believe subscription pricing was rolled out by Doug LaBahn who believes in the sanctity of spreadsheets and doesn't always understand the human element in sales. Just my two cents.

@PeterWolf hits it on the head with the ability for Sage to manipulate behavior through price. @JohnHoyt also hits it on the head with the monthly payment being a differentiator. If we face reality Sage 100 is no longer better than the competition in the feature function battle(although it is still competitive), but it loses on technology (even with SQL). They are behind on cloud and interoperability and reporting is starting to fall behind as well. This action does nothing but weaken their competitive position because NOT accepting credit cards and ELIMINATING monthly subscriptions only removes choices.

Exciting"" = this will piss off the channel even more Just in case anyone was wondering if the chief revenue officer was serious about repairing relations...

Sage 100 death knell = Difficult to upgrade inexpensively (labor wise), paperless is outdated technology, integrations strand customers at older versions, un-exciting upgrades

@PhilMcIntosh - Maybe ... Personally I think the changes to subscription are overdue. Most companies that I compete with (Salesforce, Microsoft, Sugar) all do one year minimum contracts. There are a lot of benefits to that approach for the channel and the publisher. Even customers seem to prefer it from what I hear. The auto-renewal is also well overdue. It's silly to have to re-up a contract all the time.

We work strategically with an experienced Acumatica reseller locally. Upgrades, even with some customizations, take an hour or less. Then a little more time to review new features. (They actually said 15 minutes, but I found that hard to believe.)

I'm with Peter. At the same time, it is far, far easier to get a customer to feel happier (at least, not as mad) about a pricing decision if customer has many choices. Removing the monthly payment option would be easy by making it more expensive; most will then naturally choose the option Sage wants them to, and they won't feel bullied into it.

The 3 year prepayment does not include enough incentive IMO. Price protection is difficult for people to understand based on the discounts and sales consumers encounter every day. The 3 months free is 8.3% discount. 15% would sell. So far no one wants the 3 years, but will do 1 year.

Sage screwed up by not implementing expiring registration keys right out of the gate. When it is all said and done that will be our primary conclusion. I believe subscription is largely a move to try to right this and get customers onto an expiring registration so they cannot keep using the software past subscription date. If Sage does not expire keys for subscription I would consider that gross incompetence.