Impressions from Sage Insights 2009

Last week, I attended Insights, Sage North America’s annual partner event. I’ve attended this event for several years now, watching the company’s attempts to create a cohesive brand and strategy across its many small and medium business (SMB)  solutions. At last year’s Insights, Sage had just hired Sue Swenson as North America CEO, so I was very curious to see what progress the company  has made in what has been an exceptionally tough economic year.

First, Some Background

Through a long history of acquisitions, Sage North America has assembled a collection of more than 40 small and medium business (SMB) applications that span financials, ERP, CRM, HR and other business functions. Although many of its brands–including Abra, Peachtree, MAS, ACT! And SalesLogix–have a long history, and large, loyal following, Sage hasn’t capitalized on the cross-selling and upselling opportunities between and among them.

Attracting new customers has also been a tough challenge for Sage. To outsiders, Sage’s large portfolio is confusing, and many of its older solutions haven’t been refreshed with new technologies. Sage has also faced mounting competition in the SMB business solutions space, from traditional SMB rivals such as Intuit and Microsoft Dynamics; enterprise players Oracle and SAP as they push downstream; and a growing array of cloud and open source vendors, such as Salesforce.com, NetSuite, Intacct and SugarCRM.

Sage North America has tried to build a more cohesive strategy and reset its market image several times in the past. But for the most part, these efforts have fallen short because each product group continued to devise their solution and go-to-market schemes independently of one another.

My Impressions

It looks like Sue and her team  have done a lot of soul searching, which has resulted in the “back-to-basics” approach she outlined in her keynote address. Noting that the past year has been “transformational”, she elaborated on some of the tough choices Sage has already faced, including staff reductions. But she, along with Motasim Najeeb, Sage’s new CTO and other senior executives also outlined how they intend to move Sage forward. These center on a few key over-arching goals, including:

  • Unifying the Sage portfolio under the Sage master brand. Sage’s is investing in a new corporate campaign designed to make the brand more visually appealing, contemporary and friendly, and to ensure that the Sage brand has a strong presence in each product. This is the first time I’ve seen this much coordination and ongoing discipline over a sustained period of time, and according to Sage, it’s working.
  • Improving customer experience. Sage has two critical, yet often conflicting goals: keeping it’s large installed base happy, and attracting “net-new” customers to the Sage fold. The top priorities for installed base customers are for Sage continually improve quality, ease of use and operation, and fill product gaps in an incremental, non-disruptive way. But to attract new customers, Sage needs updated products, built on newer technologies. Sage provided a roadmap that spells out its plans to modernize Sage solutions without destabilizing the IB. For instance, Sage MAS 90 will add SQL support to compete for new license revenue, but continue to support installed base customers on ISAM, unifying the two via business framework reengineering and an abstraction layer. Sage is also working to ease customer integration and migration pain points with an “integration contract” that will integrate of any of its CRM solutions with its ERP solutions. Balancing all of these concerns may be Sage’s toughest challenge, both technically and financially.
  • Place bets on innovation. Sage is placing its bets on cloud computing, mobility and social media. In the cloud area, Sage has introduced a Web-based community (SageSpark) and services designed for the millions of small business that don’t use accounting software. The vendor has also rolled out turnkey appliances for MAS90 and SalesLogix, in partnership with Applianz, and is making its CRM solutions available via Amazon’s EC2 cloud. On the mobility front, Sage sees many users adopting mobile devices as their primary computing platform, and is integrating context aware and location based services into its CRM line-up.
  • More disciplined appraisal of customer experience. Sage is investing in better metrics and analytics to measure its performance, identify gaps and discover opportunities. It is closely scrutinizing support and upgrade rates, win/loss rates, investing more in its usability labs, and engaging in more one-on-one customer and prospect conversations. Sage is also using Net Promoter to measure customer satisfaction with its partners, and helping partners benchmark and better emulate best practices with a new Net Promoter portal.
  • Refuel partners. Although I don’t know the exact numbers, partner attendance at Insights seemed to be down about 20% or so from 2008. But the partners that were there seemed serious and very interested in how they could more effectively market and sell Sage solutions, and Sage is beefing up partner enablement programs and tools for many of its solutions.

I also sensed a shift in the Sage culture. Employees and executives appeared to be on the same page, positioning and discussing their solutions within the context of a bigger Sage picture. Not easy in a company where acquisition and brand independence are part of the DNA. In general, I got the feeling that Sage becoming more honest in its own self-appraisal, and less focused on products or positioning that were once treated as sacred cows.

How Will Sage Fare?

Let’s face it, a lot of things are more challenging this year than in recent ones—but maybe that’s a good thing. In difficult times, companies have to make the tough calls, set priorities and get focused. Sage North America still has a lot of work to do in all of these areas, but has charted a viable course to renew growth. Only time will tell if it will successfully navigate it.

Can Standards Clear the Clouds?

With market adoption of cloud computing forecast to skyrocket, no one in the tech industry wants to be left on the ground. But, as cloud computing platforms, models and definitions multiply, they’re becoming as numerous and diverse as Mother Nature’s clouds—and just as easy for customers to get lost in.

Last week, Ben Worthen blogged in the WSJ about how the tech industry’s “old guard”—including Cisco, Citrix, EMC, HP, IBM, Intel, Microsoft, Novell, Red Hat, VMware and others—are forming a new group, the Open Cloud Standards Incubator, to develop standards for cloud computing. Their objective is to define technical standards to ensure that businesses can easily move information between clouds. But, as Worthen noted, there’s just one hitch–the new guard of Internet behemoths, such as Google, Amazon.com, Salesforce.com have yet to get on board.

 Vendor Politics vs. Customer and Partner Interests

Commercially, each vendor is the anchor tenant of its own cloud, with a vested interest in strengthening and extending its cloud footprint to upsell, cross-sell, and tighten their bonds with customers. Internet companies have had their own secret sauce for a while, and have used it to their advantage. For instance, Amazon has its own AMI standard, which allows customers and partners to build their own Amazon-standard clouds; Salesforce.com has Force.com, which speeds application development for the salesforce.com platform.

While vendors’ internal standards make it easier and quicker to develop new solutions, on their platforms, however, there is a catch. Commercial developers have to place careful bets on which clouds platforms will be provide them with the best market potential. Today, Salesforce.com may look like the best bet—but in two years, maybe Microsoft will offer a better opportunity. But, unable to afford development and integration costs for multiple cloud platforms, many smaller players will get stuck on a cloud.

Meanwhile, as more of a customer’s solutions get tied into those of an anchor vendor, it becomes increasingly difficult for the customer to extricate itself from a cloud, or to integrate applications that reside in different clouds.

 A Ray of Hope

While history and cynicism make me skeptical about whether its possible for this group—or any other–to gain the critical mass necessary to ensure broad-based cloud interoperability, I do see a ray of hope.

Developers and customers are sick of vendor lock-in, and the risks associated with it. Part of the promise of cloud computing has been freedom—the ability to deploy and run IT solutions quicker, better and more easily and affordably. Developers want the freedom to transport their applications to multiple clouds as new market opportunities present themselves. Customers want the freedom to integrate applications residing in different clouds, public and private. To make this possible, they need the economies of scale, cost and time-to-market benefits that standards can provide.

It’s still early going for cloud computing. Vendors may have to put aside some of their own bickering, and clear the way for cloud computing adoption to live up to its promising forecasts.

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