For small and medium sized businesses over the last couple of decades Sage has been one of the main choices for accounting software. The decision, often led by Accountants have given Sage a sold proportion of the market.
In recent years however that has been under threat with the emergence of cloud based solutions from companies like Financial Force and Xero. This latest announcement by The Sage Group Plcaround the global agreement with Saleforce might make the Xero CEO Rod Drury look over his shoulder for his latest comments.
There are two elements to the agreement and it is the second that might prove the most important. Firstly Sage has agreed to start using the Salesforce Customer Success Platform. Implementing the cloud based CRM system shows that Sage want to get close to Salesforce and get some kind of symbiotic partnership with the cloud giant. Sage will benefit from using a CRM solution like any other company and will seek to improve their Sales and operational activities through implementing the software, not a small project in itself.
It is the second part that signals a change in Direction for the company and one wonders how much Stephen Kelly, the CEO appointed in November drove this strategic change from going alone to a partnership ecosystem. The release states that “Sage will undertake development work on the Salesforce1 platform to extend its capability in delivering cloud solutions to the small and medium-sized companies market.”.
The inference being that one of the Sage products could be coming to the appexchange in the near future. There is no date for this yet and one can only speculate which solution they will port across but this is an interesting shift for Sage and one that could see them truly re-enter the race for market share in the cloud.
The obvious choices are Sage One and Sage ERP X3 which are the existing global cloud products. The simpler task will be Sage One, but once this is integrated to Salesforce Sage will need to consider whether they compete for ERP with the Salesforce store or join it.
Santiago Solanas, Chief Marketing Officer of Sage, commenting on the announcement said: “We are privileged to have the leading, global small and medium-sized business ecosystem. This agreement demonstrates our approach of partnering with world-class platform providers to provide more compelling cloud solutions for this ecosystem.”
This is going to be a very interesting story to follow in 2015, if Sage truly intend to join the appexchange they will need to put a lot of effort into the work and announce the release quickly. One wonders how long they have been working on it already.
What will also be interesting is what Intuit, the market leader will do in response to this. The Intuit CEO Scott Cook announced that Intuit “is now using design to create an emotional connection with customers” (HBR article Jan-Feb 2015), while this strategy has clearly been successful they cannot completely ignore this move from Sage.
Finally, spare a thought for those companies that make a living from integration Sages with Salesforce. The question will be whether Sage might make a quick acquisition or just lure developers away from them to implment the changes.
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