Full Disclosure: As a Sage VAR in the USA - I am not independent with respect to these comments.
Dennis - I noticed this release and had similar thoughts. For the moment I've written the release off to just awful market conditions. I think the ERP marketplace as a whole is coming to the realization that the future game may be installed base sales and maintenance and upgrades. Acquisitions are both a blessing and a curse. During the time companies are making lots of acquisitions their financial results are difficult to evaluate because of rapid growth and changing structure of the company (added divisions and products).
I watch with the same curiosity and do not think that the US operations will be allowed to languish indefinitely.
Dennis Howlett
· 10 months ago
@wayne - thanks for your candor. Was that a typo where you say: "the future game may be installed base sales and maintenance and upgrades?"
It is possible to understand all the moving parts if the company doesn't move the goalposts (as CA did) and you've a good insight into the way it hangs together. Helps if you've done a bit of M&A; yourself ;)
They can't let the US languish - who would take the assets? But Emdeon is a genuine concern.
Wayne Schulz
· 10 months ago
First I think Sage USA has a lot of room with the margins they pay their channel for maintenance. I don't expect those to stay at the same rate forever. Manage the margins and you'll have instant improved US results. The trick is how to do this without alienation.
Second, interesting mention of CA..
From my perspective Sage has an excellent marketing engine. My installed base clients are extremely interested in many of the products Sage spotlights in their web casts.
I think this is a huge plus for Sage.
With some fine tuning of pricing (there are too many flavors of the same product which make it confusing to the customer) they could be poised to drastically increase their sell through to the installed base.
For the win -- here's what needs to happen with Sage. Make all their individual acquisitions act like one company and not separate P&Ls -- that's the only way to streamline pricing and offerings.
Just before there was executive turnover about a year ago Sage underwent a big restructuring. I'm not sold managing each each piece of the company as a standalone is long term beneficial.
I have no inside information on this whatsoever. Sage is the only product we've carried for the last 22 years so they ARE doing many things right.
Dennis Howlett
· 10 months ago
Excellent insight Wayne and thanks for that.
Duane Jackson
· 10 months ago
Interesting to see the view from the other side of the pond, Wayne.
I also wondered if you'd missed out a "not" in your sentence about the future game, Could you clarify?
I agree 100% on the marketing engine. That and the channels they have in place. From the reports I get back from my people scouting the reseller channels, it's ripe for SaaS if it can be set up properly.
Duane
Wayne Schulz
· 10 months ago
From my perspective I'm not seeing a lot of interest from prospects in switching accounting systems unless it is a move to a niche accounting package.
There has to be a tangible benefit to get a prospect interested in making a migration. The old "grass is always greener" theory is not working for more and more prospects - some of who are on their fourth and fifth accounting system and are much wiser.
Stuart G Hall
· 10 months ago
Hi Duane, thanks picked up your Twitter about the Sage director's shares sell;-)
All Comments
Dennis - I noticed this release and had similar thoughts. For the moment I've written the release off to just awful market conditions. I think the ERP marketplace as a whole is coming to the realization that the future game may be installed base sales and maintenance and upgrades. Acquisitions are both a blessing and a curse. During the time companies are making lots of acquisitions their financial results are difficult to evaluate because of rapid growth and changing structure of the company (added divisions and products).
I watch with the same curiosity and do not think that the US operations will be allowed to languish indefinitely.
It is possible to understand all the moving parts if the company doesn't move the goalposts (as CA did) and you've a good insight into the way it hangs together. Helps if you've done a bit of M&A; yourself ;)
They can't let the US languish - who would take the assets? But Emdeon is a genuine concern.
Second, interesting mention of CA..
From my perspective Sage has an excellent marketing engine. My installed base clients are extremely interested in many of the products Sage spotlights in their web casts.
I think this is a huge plus for Sage.
With some fine tuning of pricing (there are too many flavors of the same product which make it confusing to the customer) they could be poised to drastically increase their sell through to the installed base.
For the win -- here's what needs to happen with Sage. Make all their individual acquisitions act like one company and not separate P&Ls -- that's the only way to streamline pricing and offerings.
Just before there was executive turnover about a year ago Sage underwent a big restructuring. I'm not sold managing each each piece of the company as a standalone is long term beneficial.
I have no inside information on this whatsoever. Sage is the only product we've carried for the last 22 years so they ARE doing many things right.
I also wondered if you'd missed out a "not" in your sentence about the future game, Could you clarify?
I agree 100% on the marketing engine. That and the channels they have in place. From the reports I get back from my people scouting the reseller channels, it's ripe for SaaS if it can be set up properly.
Duane
There has to be a tangible benefit to get a prospect interested in making a migration. The old "grass is always greener" theory is not working for more and more prospects - some of who are on their fourth and fifth accounting system and are much wiser.