General Consultant Discussion

Sage released their annual results. Announced they plan to sell NA Sage Payroll Service by 9/2019. https://www.reuters.com/article/sage-group-results/sage-results-in-line-warns-organic-revenue-growth-could-slow-in-short-term-idUSFWN1XV0TR

https://www.sage.com/corporate/imagine-media/project/corporate/investors/downloads/results/full-year-2018-results/full-year-2018-results-press-release.pdf

I'm pretty far removed from the ERP side. Any comments on why they would sell off Payroll? I would think it would be an easy way to create a captive recurring revenue model.

PS. I was shocked to see the growth. I haven't dug into it yet but that seems like good news. I know many of the Sage 100 partners that I work with seem pretty busy these days. I know it's only one product line for Sage but that seems like a positive for all the partners if it keeps up.

Sage seems to be looking to focus on products that are (a) already in Sage Business Cloud or (b) could someday be seen as a Sage Business Cloud component. I think Sage Payroll Services might have been cast off for several reasons: - Probably doesn't generate much payroll --> ERP cross-sell - Payroll processing is competitive with many well-entrenched competitors - Relatively small $$ - I think 38 million pounds / 48 million US -- running a $1 million pound loss - Sage paid $157 million in 2014 - probably if they could get that back they would love to use it for Sage Business Cloud R&D - Sage Payroll doesn't seem to be growing - [FT reported they had $37 million](https://www.ft.com/content/5bd56432-4251-11e4-9818-00144feabdc0) revenues in 2013 and Hare just said they have 38 million now. FT may be in US and Hare was probably in pounds/euros. Still seems like moderate to slow growth. - I suspect that the churn with payroll processing is pretty high making their customer acquisition costs hight and maybe not something Sage wants to keep funding over other options that may produce a better ROI - Payroll Service seen as a bolt-on acquisition in 2014 to bridge a perceived payroll gap - Sage may feel they no longer need the bridge

@WayneSchulz Ever consider changing professions to become a business analyst? I think your analysis is spot on.

@BobKohlmeyer Are you really suggesting Wayne leave behind the glamour, sex, and drugs of the ERP Reseller world? :D

Sage Payroll Solutions never had people who were the same from quarter to quarter, they didn't seem to know what they were selling, and they did zero marketing to the channel or to customers as far as I could tell. Just one big fail. It's unfortunate, because the service was supposed to be undercutting the big services like ADP and PayChex. Perhaps they were not charging enough. Also, it was only for US Payrolls. We have a customer that has Canadian employees and they were forced to find a separate service for that.

https://www.enterprisetimes.co.uk/2018/11/21/is-hare-fixing-sage/