May 17th, 2009
Sage and the Economy – Two things that should turn around
Sage is a large, albeit understated, software provider that sells a multitude of applications that a significant number of people and firms use. Through acquisitions, the company has amassed a large portfolio of products that include brands such as AccPac, ACT, Timberline, MAS, Abra and many more.
Sage has recently embarked on a media blitz to position the Sage brand as an overreaching brand that covers all of the component products and their individual brands. While it’s a bit late in doing so, Sage needed to do this as few understand who Sage is, what the company stands for, etc. I’d speculate that few technology people could rattle off more than a couple of Sage’s product line names.
But branding is not the only remedy Sage needs. Several members of the media got a chance to meet with Sue Swenson, CEO of Sage North America, at the Sage Summit event this week. Sue has been in this role for about a year and she shared with us what she has been focused on and where the company must go. She indicated that:
- Sue had a lot of operational issues that needed correcting immediately. In particular, product development was not optimal. Each product line/brand was doing its own thing with little co-ordination between the numerous, diverse development groups. Doug Meyer, another Sage executive, chimed in and added that sales compensation methods weren’t necessarily incenting the right deals and behaviors either.
- Sue believes that Sage may have overpromised and under-delivered to its channel partners in recent years. She underscored how many of Sage’s current initiatives are to restore a measure of credibility to its channel network. Increased accountability of personnel is occurring via frequent, objectives-led performance evaluations that appear to be occurring at all levels of the organization. The message to workers is clear: non-performance is not acceptable.
- Sue has bolstered several key executive positions in the organization. The company now has its first CTO. He is expected to:
o Delight end-customers of existing products
o Develop product capabilities that make sales (i.e., channel partner sales) easier via introduction of higher value-added capabilities
o Create greater synergies between development groups and promote greater re-use of developed capabilities
o Carve out some of the product line specific budgets and use this to create new products/product lines
- Some future innovation may still come from acquisitions. This might include ‘surround-sound’ application plays that complement existing applications as well as deals that bring in entirely new product lines or offerings (e.g., SaaS solutions).
The overall tempo at this event appeared to me to be: cautiously optimistic. My sampling of Sage partners indicates that they want the company to:
- deliver
- innovate
- catch up and surpass competitors
- get its internal act together
In a discussion I had separately with Sue, we discussed, at length, how turnarounds occur and where she’s at with hers at Sage. At the conclusion of that discussion, I believe:
- Sue correctly assessed a number of existing operational issues within the organization and has moved fast to correct them
- Sue is implementing a program of accountability to restore morale internally and to improve customer and channel partner satisfaction
- Sue knows what new products and innovations will be forthcoming but is not disclosing these for now as she wants to restore partner confidence. She will do so by under-promising today and over-delivering new products in the near future.
Beyond Sue’s efforts, Sage does have some Marketing and brand challenges within North America. I know the company is addressing this matter currently but I’d like to offer these points for Sage to consider:
- Selling software in North America is very different from selling software in England (Sage’s home base). Marketing and PR in the North American software market are not genteel, demure or understated. They cannot be as there is just too much noise in the channel. To be heard here, you need to act like Richard Branson, Larry Ellison, Marc Benioff, etc. In North America, any PR is good PR.
- I personally believe that NetSuite does a superior job promoting itself and yet it is a form factor smaller than Sage. Should that be the case? Is there something Sage could learn from this?
- Look at the energy generated by Salesforce at their Force.com, DreamForce.com, etc. shows. These events have an energy, enthusiasm, etc. that infects attendees with one clear observation: this firm and its products are going somewhere. Can Sage do something likewise?
This blog explores the intersection set between services and technology. If it impacts either space, it will be covered here. Brian Sommer is a former Accenture partner. He did an 18-year tour of duty there and ran three small practice units (Finance Center of Excellence, HR Center of Excellence and Software Intelligence). He’s sold service projects in almost every continent and remains just as current on both services and technology today as ever before. Brian is currently CEO of TechVentive, a strategy consultancy servicing technology providers, and a research analyst with Vital Analysis. See his full profile and disclosure of his industry affiliations.
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