(And, yes, the random image with the post is indeed Sage, the herb)
Interesting positioning from Sage, the vendor that, after spending years with its head in the sand, is finally jumping fully into cloudy thinking.
Sage is a strange sort of a company – it has grown large, at least in part, through an aggressive acquisition strategy that has seen it amass a huge number of different products that service different markets and industry verticals. This strategy, while helping Sage’s early expansion, does little to offer what the modern, more connected world requires: a coherent platform that offers modularity, but within the context of consistency – of codebase, user experience and roadmap.
But in the last year or two, Sage’s CEO, Stephen Kelly, seems to have had an epiphany. While Kelly is a Brit heading up this most British of companies, he very much has a Silicon Valley perspective in the way he thinks and this is increasingly being demonstrated across all parts of the Sage business. Its conferences feel like US extravaganzas, its acquisition strategy seems more consistent and its product strategy is very platform-centric.
It is this last trait that we’ve seen recently as Sage seems to channel its new best friend, Salesforce. Sage has, in recent years, both re-architected existing products, and built entirely new products, off the back of Salesforce’s Force.com platform. It has entered into deep and, one assumes, mutually-beneficial partnerships with Salesforce, and Sage has even joined the Salesforce Foundation and followed Salesforce’s 1/1/1 philanthropic model. When the relationship was first consumated, a couple of years ago, I wrote about it and had some doubt as to how meaningful it really was – I wondered if Salesforce was looking at the partnership as a short term win with no real legs.
And then last year the company announced it was doubling down on Force.com – it was re-building existing tools on the platform and had made a strategic acquisition of HCM vendor Fairsail, itself built on Force.com. Only a few months ago Sage announced an acquisition of Intacct, not a Salesforce partner but a mid-level ERP vendor with a platform-centric view of the world.
Put all this together and it makes sense to hear Sage’s announcement of the Sage Business Cloud – a new way of looking at existing and future products. Sage Business Cloud is a range of different proucts, all built on the cloud (obviously) and with a consitent approach towards growth and interoperability. This is an offering that Sage’s biggest competitors, both at the small business end of town (Intuit and Xero) and at the larger end of town (NetSuite) will find hard to counter since they don’t have the broad product portfolio needed. Somewhat ironically, the vendor closest to having this story is MYOB, an Australasian-focused accounting software vendor that has its own micro and small business tools, and recently too an equity investment in ERP vendor Acumatica and rolled out its own Acumatica-based prodcut. But MYOB is too regional to really be a substantive player here.
Kelly, never one to underestimate the promise of his company’s products, waxed poetic at the launch of the Sage platform saying:
Sage Business Cloud is the next transformative wave of business software. As the fourth industrial revolution continues to take hold, we want to make our customers lives simple. Businesses of all shapes and sizes need products that aid productivity, enable them to respond at lightning speed and deliver insights as well as opportunity. We have our foot on the gas and are ready to meet the needs of the most important people to our business — our customers. And we are just getting started
Again, the sort of bluster that would raise eyebrows in his home country, but which goes down a treat in the US, and is straight out of Marc Benioff’s (Salesforce founder and CEO) playbook.
Sage Business Cloud features a set of core products — including Accounting, Financials, Enterprise Management, People, Payroll, Payments, and Banking — designed to meet the increasingly dynamic needs of businesses. Alongside the core tools, and again, as a nod to Salesforce’s ecosystem strategy, Sage intends to build a large marketplace of add-on applications tha can plug into the various Sage tools.
Of course, true to its new-found Silicon Valley cool factor, Sage had to drop in a few buzzwords. Apparently, the business cloud will:
benefit from the latest advances in artificial intelligence and machine learning to help businesses increase productivity and efficiency.
Of course it will.
MyPOV
This platform story is actually a key differntiator for Sage. Don’t doubt that the competition also talk about platforms and ecosystems, but it’s fair to say that in terms of a consitent set of tools that span the different life stages of busiensses, Sage is somewhat unique. Of course, therein lies the rub. there is no avoiding the fact that Intacct and Sage’s small business products are built on two different technology stakcs with two very different user interface paradigms. Add to that the fact that, naturally enough, the way a mid-market ERP works is fundamentally different to how a small business product works and you have siginficant scope for the reality to not live up to the hype.
Personally, I’m slightly dubious that moving from a Sage small business product to Intacct is actually any easier than moving from, for example, Xero to NetSuite. Of course Sage will be doing work behind the scenes to build a strong channel that can help with this progression but the reality is (as is always the case) subtly different to the rhetoric.
Functional issues aside, I like the Sage positioning. They really are doing for finance what Salesforce did for CRM and if Kelly continues to innovate and emulate in this way, we might have an interesting fight on our hands yet.
