Blog post

The Start of a Different Sage?!

By Robert Anderson | August 14, 2015 | 1 Comment

One can only hope.  By all appearances that seems to be the case.  IMHO opinion for the last decade Sage has been mired in the past, disbelieving and distrusting that trends like cloud need be taken seriously, instead wholly focusing on listening and responding to current customers and partners who had a stake in feeling similarly.  In doing so, it lost track of the things that attract net-new customers, characterized primarily by the growing class of millennials (just look around..) behind new small businesses that happen to view ties to the past way as severely limiting.  The successful recipe, of course, would have been to take care of and aggressively address both the old and newer sides of the presented equation.  In not doing so, Sage was and arguably still is late to the party.

Fortunately, it’s working as hard as ever to accelerate and catch-up.  Sage has been a leader in the SMB business applications space for as long as I can remember just based on the sheer number of customers it serves alone.  If it can convince current customers to embrace the expanded functional footprint they’ll need to compete going forward while leveraging their rich SMB heritage to lure the fast growing new generation of small businesses back into the fold they can conceivably jump right back in the game.

So far I like what I’m seeing.

  • New CEO Stephen Kelly comes off suave and scripted (all keynotes were fully teleprompted, and hence a little stilted) but the key thing is that he’s fully committed to embracing the future, can make decisions quickly and looks for near-immediate tangible evidence of results.  This alone is a big change.  Employees are energized, exhilarated and slightly exhausted by the newly instilled pace.  Most of us know that this is how history is made, or remade, so bravo on this! Keep going!
  • Sage is streamlining its business for speed, clearing out deadwood and naysayers and centralizing development into a global organization.  All this creative destruction adds up to renewed velocity and more wood behind the arrow.  The old regional structures were getting in the way of innovation and acting as a drag on progress.  The move was a long time in coming, but it  appears the deed has been done.  Thank heavens.
  • Going after net-new customers is back in a big way with cloud (and mobility) leading the way.  The modernized Sage flagship, X3, can now be supported on premise, or, via private and multi-tenant public cloud.  Sage Live, its brand new social accounting solution, which targets the central part of its market, is totally cloud-based and built on the Salesforce One platform.  It provides a unified real-time view of business operations and finances via a scoreboard motif backed by a new multi-dimensional accounting engine.  It also takes full advantage of Salesforce One’s analytics, collaboration, and mobile capabilities and ensures the critical customer record is driven throughout all business processes.  Finally, Sage Impact, its customizable online hub for accountants and Sage One the low-end cloud accounting solution which sits within it, have been redesigned as well.  Sage is also making big investments in new customer business centers in Atlanta and in Dublin to showcase its new offerings.

Other noteworthy announcements included a re-branding to new Sage100c and 300c solutions that now incorporate extensive mobile and collaboration features, extending Sage Payment Solutions to customers of Magento, and a new global partner program which is expected to launch in October in order to unify its channel.

Kelly also assured his customer base that he won’t be forcing them into the cloud and that “end of life” isn’t in Sage’s lexicon. Totally agreed.  There’s nothing wrong with taking care of current on premise customers and the partners serving them that want to stay there.  Why cut one’s nose to spite one’s face.  The problem, as noted, is that when that becomes a sole fixation it acts as a drag unless those customers include a steady influx of new businesses bringing a fresh modernized perspective.  Regardless, Sage finally gets it.  Somewhere in there may also be the reality that many traditional channel partners, including some that go back a quarter of a decade, may not be as successful selling the new stuff.  Along with the new cloud offers, Sage might also want to crank up the recruitment effort for net new partners as well.

Kelly and his team still need to convince us that all of this progress equates to a rejuvenated base, lots of net-new customers, and a big bottom-line impact.  Sage is playing in a crowded market that has recently become even more hotly contested.  It must differentiate and it must prove superiority.  It’s regaining its strength and has plenty of the arrows in its quiver but results must come quick.  It can’t be denied, I believe, that they are on the right track.

Note: Opinions are my own and do not constitute Gartner’s consensus position on any of the above topics addressed.

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

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1 Comment

  • Michael Fulthorpe says:

    I am just reading this interesting article on Sage. Blogs like these are interesting in seeing where different sectors in our industry are are in terms of making this challenging transition. For me, with an outsider view, Sage have got this right, not a transition from on-premise TO cloud but a transition to on-premise AND cloud.
    Having been through this with another technology company over the past few years and working globally with customers in all industries, I can see why you come to the conclusion that Sage is late to the party when it comes to cloud, but the critical thing is, they are very much at the party, in fact with the pedigree and customer centric focus and support they have provided over decades, this puts them firmly at the top table at the party.
    Reality is, customers today (and for the foreseeable future) want three key things when it comes to vendors 1) partnership 2)Choice 3) flexibility. Vendors that will be around in decades to come will recognise this trend. Customers that want to stay on premise – great, let them stay, partner with them, sell them the value of multi-year subscription and let them grow. In time they will move with you based on business demand. For those that want to embrace the cloud, let them, and sell them bucket loads of it, with multi-year flexible desktop cloud services.
    All this leads me to believe the time is now for Sage, they have the strong customer base, strong offerings, competition with disruptive technologies competing which will increase demand and stir the market for them. They also have strong leadership with a place at the top table at the party!(it’s fashionable to be late sometimes)
    For sure, I agree, they will need to surround themselves with people that have walked the journey but Sage has been and still is an attractive proposition for new talent, so that will not hold them back.
    For all those happy Sage customers out there, they will have a partner that can lead this journey with them and deliver more and more business value, then its not a black and white choice of on-premise or cloud.
    I watched Stephen Kelly online talk about ERP as an out dated term, he is right, there are a few other 3 letter terms that should be retired. Now is the time to reinvent how we solve customer business challenges.The time is now for a lot of us in the software, tech sector and its an exciting time.
    As a North Easterner, I really look forward to seeing Sage and their customers grasp the opportunity, thrive and continue the success for many more decades, whether it’s on-premise, on cloud or on mobile.