Sage News and Discussion

Sage is claiming in their FAQ that 90% renewal was never a requirement for those selling subscription licenses to continue receiving margin. I seem to recall that this was in fact stated somewhere - though as I look through the FAQ Sage did indicate this only in the area where they explained the performance criteria for the partner to get margin from a Sage lead (aka - a direct sale to an existing customer). Personally I think it's a very tiny leap for Sage to suddenly transition this 90% requirement to all commissions - and I wouldn't be surprised to see it happen.

Q. What are the performance criteria that partners must meet to receive margin when Sage uncovers an opportunity in their customer base? A. As Sage uncovers sales opportunities in the customer base of a partner listed as reseller of record (ROR), the partner must actively engage with Sage and the client in the sales process while maintaining the following performance criteria: Certification at the solution level, i.e. Sage CRM, Sage FAS, etc. o 'Solution level' is defined as the cross-sell product offering being sold to the customer 90% renewal rate at the product line level, i.e., Sage 100 ERP or Sage 300 ERP o Renewal rate is defined as a rolling 12-month fully mature unit renewal rate which includes renewals up to 90-days late in the equation. At least one new installed base customer purchase at the solution level per Sage fiscal quarter, i.e., Sage CRM, Sage FAS o One new installed base customer purchase is defined as the initial customer purchase of the add- on product i.e. Sage CRM, Sage FAS, etc.

Langner definitely said it. There was much anguish over it in the Q & A and the live Q & A.

Tom Miller had a chance to set the record straight at the LinkedIn meeting and I do not recall anything being clearly stated other than ""don't mis-interpret"" .... it seems Sage had a lot of opportunities to clear the air and instead sat back to see what would fly and what wouldn't.

This is, and always has been, their modus operandi. Only time I recall it being different is under SOTA (when I was still in diapers).

Agreed. I don't recall it being this bad where initial announcements were so poorly made and subsequently required FAQ and changes.

I mean - really - these guys are $300k+ execs --- and they cannot clearly execute a message to the channel? Somethings wrong. I'm totally serious.

Maybe they should read Roberta's book!

Great idea @JeffSchwenk . 90 Minds should ship a dozen copies to Sage management with a ""Thinking of you"" note.

I'm up for it :)

Wait, I have to read the book first. There may be some shit in there about trimming margins or maintaining customer renewal metrics.

Margin req: I was on the 2nd clarification call, and 90% was clearly stated for lead assignment, not commissions. I think they're trying to use the renewal rate as some sort of marker for how technically competent you are. If so, they do NOT understand what makes customers renew and not.

Wayne, your befuddlement about the apparent incompetence of the $00k+ execs must be apparent to many others. I think it is fundamentally due to the lack of significant channel exec experience up there. Also, if they tend to keep sycophants around them, they won't get productive pushback on policies that seem natural to direct-sales execs and simply don't work in channels. (I really have no idea now about what Tom Miller actually brings to the table. I do not think he's had experience as an ""enforcer"" before, which is what they have him doing now.)

The rule about having product sales 1/quarter in order to get a cross-product referral to your OWN customer is simply mind boggling!. In the real world, that opp can be part of getting a partner excited about pushing that cross-product opp. Again, Sage now doesn't have a good understand of either how customers relate to partners or how partners prioritize their efforts.

My understanding is that as of recently -- Sage's lowest net promoter scores are for customers using multiple integrated Sage products.....

And yet, Sage claims that its customer-spend is like 8x higher for customers who have more than a couple Sage products?! Low net promoter scores on ""integrated"" products doesn't surprise me at all. The integration delivered is rarely close to the integration the customer imagines. I do think Sage's dev efforts in the past 2 years will improve this sooner rather than later, but mainly the integration has been over promised by folks in Irvine who have never bothered to actually experience the integration they either ""manage"" or sell. And I'm not convinced there is a significant relationship between NPS and renewal rates.

@JerryNorman - What development efforts are you referring to? Adding extended solutions to the core product? What is new that hasn't existed in a previous life? There a tons of suggestions on the IDEA web site of simple stuff that would add functionality and increase usabilty and satisfaction. Someone posted here that R&D was dead in the water if it didn't demonstrate a way to increase recurring revenue. It appears that reasons to renew client care is not part of this equation. Who here cannot list 30 - 50 improvements to the code? I wouldn't be surprised to learn that the R & D development budget pales in comparison to the marketing/sales budget.

Jeff, I meant development efforts in integration. At least on the ERP-CRM front, SData will relieve lots of limits now. And they did change their model to have a separate integration PM and put him in Canada with Kaas. They've also buried the SData and Web Services interface in at the Providex level, which means that the Sage 100 features based on that need should more or less ""blossom"" rather than trickle out. I was surprised by that; I'd expected a sort of ""tacking on"" for the web services. And yes, the R&D budget is less than S&M. They budget these by % of Rev. FY2011, WW R&D was 11.3% of rev. remaining SG&A was 57%. While WW numbers, I have no doubt that % was pretty close in all the OpCo's. I haven't recently updated comparisons, but ~10% for R&D is pretty common in software industry for large firms in sort of mature markets.

Yea but how much of that 11.3% goes to MAS90? I bet relative to maintenance revenues, 5% goes back in, and of that 5%, 90% is for stuff that connects to the likes of Avalara and other recurring revenue sources. I bet the other 6.3% is going to build out X3.

And that's not exactly fair to MAS customers who pay maintenance.

Mark, Sage doesn't break that out, as you know. A couple comments from senior Sage mgt over the past couple years leads me to think that the R&D contribution is consistent with the company-wide level - around 10%. And, the portion to connectivity is pretty relevant to the functions of the whole thing. Funding to Providex also goes into that. Irvine has paid a lot to feed the whole Framework upgrade, and the foundation for integration. I guess we'll see if they get back to adding functionality that current customers want ...

I think we all understand that programming priority will be to those projects that increase recurring revenue. Whether that really synchs with what current customers want is yet to be seen.

I don't want to make too big a deal out of this, but Sage mkt research indicated that profiles of current Sage customers is pretty different from those who are looking for a new system. (That actually does make sense to me.) So, features sought by new buyers might not be of immediate appeal to current customers. That raises a question for me: ""Is that difference because the the orgs are really different? Or because those looking are aware of what they're missing, while current customers aren't yet?"" If the latter, then partners might improve things by educating current customers about the things new customers are looking for. Just a thought.

MAS 90 used to be the most feature rich ""ou-of-the-box"" solution in its price point with the simplest technology. It was functional, stable, and easy to use. Now it is a plethora of technology that needs more care and feeding than ever before and a real technical implementer to make it sing like other products. I am all for the BOI and sdata, but the Business Insights Reporter was the kind of tool that reminded me of the old MAS (or Peachtree actually) and ditching Payroll module for Abra is much of the kind of thinking that is driving MAS (or should I say ERP 100) into the crapper.