A few years ago I attended Sage’s global user conference in New Orleans alongside a small group of industry analysts and media folks. The event was my first experience with Sage’s then freshly minted CEO, Stephen Kelly. Kelly, who was formerly the CEO of Micro Focus, had more recently spent time in the public sector as COO of the UK Cabinet Office, creator of the infamous GOV.UK property and the G-Cloud approved government supplier marketplace.

Kelly was brought on board to try and tidy things up at Sage which was when he joined, something of a mess. Sage’s modus operandi, up to that point, had been to acquire small accounting software players to add to its huge portfolio of products. While this may have been accretive in terms of revenue, it created a hugely complex business that was massively convoluted.

So Kelly had a big job to do, but he had a fair amount of experience and was anything but lacking in confidence. Indeed, in an exchange that has seared onto my memory, Kelly went to great lengths to point out on multiple occasions to the attendant hordes just how humble he is as a person. The irony of someone standing on a keynote stage having just been feted by triumphant entrance music telling us all that he is the most humble man alive seemed to have been lost on Kelly.

The Salesforce deal

Lack of humility aside, Kelly seemed to have found a soulmate in the form of Marc Benioff, CEO of Salesforce. The two, while seemingly unlikely BFFs, seemed to hit it off and Kelly professed a desire to reinvent Sage’s product mix by building replacement products on top of Salesforce’s platform. As I detailed at the time:

The two are announcing that they have forged a strategic partnership that sees Sage create a new application, Sage Life, built on Salesforce’s own platform. It means that Sage gets a customizable, mobile accessible and modern product, not to mention a healthy dose of credibility that comes from being friendly with Salesforce.

Kelly was excited to be leveraging a platform that didn’t require him to build a product from the ground up. I was less sure and commented that:

Force.com [the Salesforce platform] has, until now, been a platform focused on more enterprise-level use cases. As I saw it, building a small and mid-sized business (SMB) tool, on top of an enterprise platform created some weird dynamics in terms of economics and fit. Kelly disagreed and we were happy to respectfully see this issue from two different sides.

Lucrative gig, but needing more than a pretty face

Kelly was certainly a good face to have on stage, not only was he good at dropping the on-message lines, but he was humble as well (did I mention that already?) But CEO’s need to deliver results as well as soundbites and Kelly’s £790k salary alongside his nearly million quid stock bonus, was intended to drive overall financial results for the group.

In this he was less successful after the share price increased post his joining, things haven’t been so rosy and the latest half-year financial results were pretty dire which, in turn, prompted a share price drop.

In response, Kelly reverted to type and took a machete to his management team, firing 30 senior staffers. Included in that list was Alan Laing, the UK managing director that had been in the role a sum total of a year – carving out that many senior staff indicates things are pretty bad.

The Intacct purchase

Last year Kelly scooped in and acquired Intacct as a way to obtain a genuinely cloud-based mid-market product. That acquisition has probably gone OK for the company, but it didn’t really lead to any acceleration in the move to true cloudiness across the Sage portfolio – Kelly was notorious for slapping a “cloud” sticker on older Sage product lines and going to market with a marketing-led message.

In a market that has pure-play cloud vendor Xero leading the charge, and a newly resurgent Intuit making real progress, that wasn’t a strategy that was appreciated by many.

What now?

Sage is a mess – it was a mess before Kelly and despite his slick talk and Brylcreem infested locks, it was a mess during his tenure. It’s hard to look at Sage and not be frustrated by their apparent inability to innovate – other legacy accounting vendors have done so (witness Intuit) and are enjoying the rewards.

Personally, I won’t miss Kelly – in an industry well known for its egos, hubris, and arrogance, he went above and beyond on all three traits.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

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