Sage News and Discussion

Sage's Larry Ritter has surfaced at Roper Industries where coincidentally Joe Bergera (also late of Sage and CRM division) is also a VP.

No coincidence. Bergera originally left Sage for a different company, but a few months later Roper apparently made him an offer he couldn't refuse (I had some correspondence with him over that.). He and Ritter had worked well together at Sage in strategic product-functionality development; Ritter is a techie who scales well with high-level functionality and organizational BS. I don't think Ritter was all that happy with his transfer ~1 yr ago to ACT!, so Bergera must have said basically, ""I'd like you to join me at solving a similar problem here at Roper, but with bigger stakes, and I have more power to actually make something big happen."" The loss of the two of them, and the jobs they took after Sage, I think speaks volumes about the challenges that Sage has.

Personally I think it's simpler and Sage dumped the CRM crew. It's too coincidental that these folks all are gone. Of course the same could be said of the ERP folks where Laurie Schulz, Scott Zandbergen, Alan Bryant (and I'm sure I've forgotten one or two) all fled as well.

I was looking for that when Bergera left. He had spent several years improving the Scottsdale operation- really. Thing had been going up. It made no sense for him to go. But I thought it was relevant that shortly after Wilzoch took over, they FINALLY consolidated Sage CRM NA with Scottsdale. Until then, there really were 2 separate CRM ops in NA. Wilzoch has spent a year or 2 in Ireland, among other assignments. I think one reason Bergera quit was because he couldn't make that consolidation happen, despite his official title. I think he got tired of not getting what was needed to focus the market on Sage's CRM offerings. The CRM Sales Housecleaning was, according to several sources, all about the individual behavior of the direct reports to the VP. Gregorec was included because he enabled that near-illegal behavior. I had originally thought there was more to it, but a couple different sources persuaded me it was otherwise. So, no sales performance issues involved. That said, the CRM market is the only one that is really growing; ERP mkt is essentially just replacement. So Sage is certainly frustrated because its CRM division is not growing at anywhere close to market potiential. I do think that the CRM business is the one product area that has really, truly suffered from Sage's aversion to spending on advertising. SalesLogix just fell off the market radar after ~2004 when the salesforce and MS CRM started seriously sucking all air out of the product awareness space. Not that I care too much about whether I'm correct. The exercise of discussing the alternatives and analyzing it in the past couple months has given me clarity I needed about what I need to do to deal with the future I now see differently than 6 months ago.

I'm not sure on your figures on CRM. That may be what Sage hints at in chit chat but didn't last years annual report show revenue declines in CRM? I seem to recall the report was not rosy at all. I'm going on memory and would have to dig out prior year annual report. The 9 month is out and I'm just reviewing now http://www.investors.sage.com/news/press_releases/?id=176212

To be clear, I meant the larger CRM market, not Sage's revenue. I'm looking forward to making the time to think about the Sage sources you posted. Sage has generally been quite reticent about breaking out its CRM results, confirming suspicions that they've grown far slower than the larger market. One of the few times the CRM number was out was (I think) a Sage partner webcast a month or 2 ago. WW was $280mm and ACT! was half of that. The monthly partner calls for the CRM division have crowed about meeting or exceeding their numbers since at least last fall. I haven't heard hints about declining numbers there since ~2009 when fighting the recession, and even then they claimed to be performing well to Plan.

Jeff Gregorec's LinkedIn would seem to indicate CRM is a smaller portion - -though I am not sure what he includes in his number and I am aware he was not the ACT! manager. Provide senior leadership for Sage's Global CRM Sales Team. The team consists of approximately 75 managers, engineers and individual contributors. Responsibilities include over $50-million in annual sales

Good catch. I don't think Gregoric's number has Sage CRM results in it. As I recall, they put NA SageCRM sales into Scottsdale at end of FY 2011 (basically the day he was fired). So that would be SLX $$. When I heard the $280mm, they also said roughly half was ACT!, and the remaining was split evenly between SLX and Sage CRM. So ~$70m ww SLX from that. $50mm is more or less there. But it's an embarrassing number for sage when SugarCRM is now claiming $1bn ww revenue. No wonder they never break them out.

I got out of the Sage CRM BPAC call a few hours ago ... CRM sales for NA for the half-year = unspectacular. Strange ... my business is really doing well now and it sure seems like a lot of partners that I work with are seeing an uptick on Sage CRM. I guess I just can't extrapolate based on my personal anecdotal experience. Who knew?

My sense from these conversations goes like this: - Sage CRM has generally lower NA sales, especially ex-Sage integration - Sage CRM WW does better, and the bulk of its rev (80/20?) is outside NA - SLX has done OK outside NA, but the lion's share is still domestic. - While I've seen no sign of AZ layoffs in the past couple years, I haven't sensed headcount growth either. - SLX was simply too late to the Cloud party, and without significant marketing, it will remain stuck as a niche product. It might remain stuck there even with significant advertising. - It's no accident we've heard a lot out of Irvine about selling CRM to the ERP base. They think it's one of the few available strategies to goose the installed base. - I'm not sure that there are any SLX partners remaining who have a significant focus on CRM who don't also emphasize SugarCRM and/or MS. Most of these will tell you those two are easier to sell (more natural demand). I've been with SLX since its launched in '97. This has been tough news for me to assimilate, but I think the above is a realistic picture I've developed over the past 6 months or so. (It might even be a bit optimistic ...)

Numbers I've seen: - Sage CRM has ~12,000 customers worldwide of which 4,000 are in NA. - Depending on who you talk to, the Sage CRM NA customer ranks should swell between 400 - 1200 this year. (Yeah ... look at that range ... they are using darts to put numbers out there to different people) - Azamba (working with other Sage partners) has added roughly 21 new Sage CRM clients this year already. We are shooting for 50 for the year. - Sage Scottsdale headcount has probably stayed the same but they have re-orged and filled in positions of folks that have left for the most part. - Sage is realigning very quickly to be customer focused. The next six months you will see AGGRESSIVE calling of your clients by Sophie's ISB team to upsell and cross-sell. You may or may not be asked to participate. You may or may not even be aware they are doing it until a confused customer calls you. - Pascal's plans have done nothing to improve Sage's position and have only served to alienate the channel. Seems like a long-term losing strategy to me. - Pascal is staying the course. http://www.seathelights.com/other/i_am.html I always wonder if they gave even the briefest of consideration to actually investing in product R&D instead of flailing around with all the sound and fury?

Opinion: investing takes time. Flailing around will goose earnings (maybe) and produce a bonus.

Yes ... god forbid anyone takes a long view. That idea underscores the dichotomy of the channel and Sage. Sage execs have a shelf-life of 24 months (give or take six months) while most partners have been around for DECADES. I would say that Pascal in particular has done more damage than one human being ought to be allowed to do to a multi-billion dollar organization with his short-term thinking.

Although as Wayne has suggested, Pascal probably didn't have much choice about his time frame. Still, the WAY he's done this was needlessly destructive. Listening to some modest- to large-sized SLX partners talk about how they want to participate in the CRM market going forward would probably send Pascal to bed for a week. No matter how much they might like SLX as a product or concept, they still have to move the way their prospects want to go. The consensus seems to be that SugarCRM is just easier to get moving at a customer, with more natural functionality OOTB. It also has a large and easy to poll 3rd-party community. Sage might think it's playing today's game, but it is really a 10-yr old mindset.

Everyone has choices. For Sage to wring their hands at this point and say ""gee we don't have any choice now"" is the result of the continual mindset of short-term thinking. Either they break the cycle or they don't. If they don't, it's going to be a disaster for Sage as the new round of entrepreneurial cloud based software companies start eating their lunch.

When I was on the Customer Advisory Board for SalesLogix I think I was the only one that had SLX integrated with their accounting package. Everyone else had it as a stand lone application. Some of the users were New York Stock Exchange, Wells Fargo, Seattle Sun Times. When I talked about integration everyone gave me the ""what for"" look. Some of them had done some amazing customization with SLX.

Yes, and ""amazing customizations"" is the niche they have now. It is not clear to me that is a growing one, as others catch up. I'm with you on the ""integration? what for?"" Most think they want it, though; and they find they need less than they thought.

speaking of new startups, check this out: http://www.keyedin.com/ The founders of epicor cashed out and put this together. They have aggressive goals. If they come close to meeting them, the $$$ come out of a market growing at 3% or less --- so they must take share from somebody. And a lot of the CRM noice is happening in the marketing automation space, where Web 2.0 has transformed how marketing is done and measured. When you look at the acquisitions the salesforce has made in this area, it's hard not to conclude that they are playing a different game than Sage.

A little secret about SalesLogix, the majority of integrations is SLX to MAS90/200 and NOT MAS500. As I have mentioned before there was a webinare on SLX integration hosted by Sage and they were going on and on about MAS500 until one VAR said that none of his customers used MAS500 and he was more interested in MAS200 integration so the Sage moderator asked how many had MAS500 customers and NO ONE replied.

That doesn't shock me about MAS 90200. What is very Sage, though, is HQ not knowing how their customers are using things. I think that's been sort of cross-divisional, but I might be a bit harsh.

And yet they have neglected their slx integration for nearly a decade. What a disaster. GP has a better integration to SLX than MAS90...

@JerryNorman - take a look at David Van Toor's LinkedIN for the experience he had at Sage -- he pegs the Act! market at $45 million -- Reversed hostile and highly vocal ACT! customer base (2.4 million customers, $45M) by establishing comprehensive focus on the Customer Experience, including: Creating the ACT! Online Community. This was Sage's first Online Community and first Sage Executive to actively participate in online customer conversations.

You do nice G2 work. I'll have to go find that reference I saw. This $45m is definitely in conflict with the data I saw on a Sage ppt: I remember the ""ACT! is half"" part, and I saw the total Sage-wide CRM was either $230m or $280m. What might be confounding is NA vs. WW rev; those get very fuzzy. I got the very clear idea that WW ACT! is ~$140m. I also find it hard to believe that more than half of ACT! rev is outside NA. But even with that, you get at best, $45m SLX NA, $45m ACT! NA, plus something for Sage CRM. That's vicinity of $100m CRM NA, another number I've heard a couple times. Regardless, we do agree that headcount in Scottsdale has been flat for a couple years; I have no idea about headcount in Dublin. The kindest conclusion is that Sage's CRM efforts in NA are ""under performing.

You would have to define underperforming. Here's the latest from a convesation with Tom Nolan (Sage CRM Dublin) yesterday: Sage CRM standalone was flat year over year - not declining though. Sage CRM - Accpac integrated grew significantly Sage CRM - MAS declined somewhat The last number is mostly due to the way they previously accounted for MAS EES sales though. The Sage CRM group was getting a decent % of every EES sale. Now that has gone away, it's going to take some time to actually start to see the new model of Sage CRM integrated with MAS pick up the pace. My own numbers would seem to indicate Sage CRM - MAS is on fire. We are seeing a huge uptick in folks interested in moving on to it. Also, I've said it a lot lately ... Sage isn't taking this lying down. The install base team is going to be dialing for interest and then handing it over to Scottsdale to close the sales. This is ramping up very quickly. I have been told that this is what they did in France and they saw a very nice conversion rate. BTW ... partners shouldn't bother asking for margins in these cases. The mentality is that if Sage is doing all the sales work, the partners shouldn't expect any sales margins. That part isn't 100% finalized but I would expect an announcement about it. Maybe they will kick off Sage Summit with that news. They seem to like to kick us in the nards to start off the conference on the ""right note"".

BTW - I realize that I'm speaking exclusively about ""Sage CRM"" the product not Sage's CRM group ... I would guess you are correct that SLX and Act! are both down significantly but I don't have any hard numbers.

My definition of ""under performing"" is ""not significantly growing."" the CRM market is growing at a pretty healthy clip, so even just flat sales (which is what I think is happening) is under performing. I think Wilzoch made the sales focus pretty clear at that Feb meeting. Lead, follow or get out of the way. Listening to the Corp financial call, I got absolutely no warm and fuzzy about partners. Sage plc has apparently decided that what works in France will work anywhere. A business historian would say, ""Good luck with that.

@JerryNorman - I've listened to a few of the Sage corp calls -- this is pretty typical and not that different from Netsuite, Epicor calls. They all want to portray strength and no overreliance on a channel. I wouldn't read too much into the Sage call regarding the channel. @PeterWolf - I'm fine with no margin on CRM add-on sales - I just want that transaction to be separate from MAS and not potentially damage my customer relationship.

Good point about the other calls. I don't do that much - could you comment on whether any of them (esp Netsuite) bring up market share or product space comparisons?

In general the better the quarter/year the more talkative the company. I thought Sage's call was about as upbeat as a funeral eulogy. Netsuite is often asked about average selling price (I think $40k/yr) as well as market direction. They sometimes bring up competitors but usually focus pretty intently on their company and how great a quarter/year they had. Overall I think Sage gives more info in their printed materials than the audio portion (probably because they are somehow forced to disclose certain key items).

Thanks Wayne. If Sage's Chairman/CEO had English as primary language, there might be a livelier audio. Your observation about correlation of talkativeness:performance is about right. When performance is not good mgt is focused on making sure the whitewash doesn't come off from analysts' fire hoses. I think it's a fool's game, but it seems common.