SageForce: 12 questions for Sage as it launches Sage Life
- Summary:
- The Sage Life announcement raises interesting questions about how Sage itself modernizes for the 21st century.
The announcement of Sage Life makes clear freshly minted CEO Stephen Kelly's strategy going forward. Out with the moribund, defensive, stick to your knitting and in with the new, aggressive, ambitious approach to the context of cloud computing. Or at least that's the theory.
The core announcement detail:
Sage Life is fully customizable, cloud based and can be used on any device, from smartphones to smart watches and from tablets to the desktop. With its mobile control center, employees can view data in real time and react as one team. With social networking at its core, Sage Life allows seamless interconnections between colleagues, customers, partners, suppliers, and other stakeholders.
Note this is not saying cloud native. That would be too much of a stretch, given that Sage's heritage is in on-premise software. Even so, and despite the clear mutual enthusiasm, buyers need to ask important questions. Here's our initial checklist:
- Which Sage solution is Kelly claiming will get the Sage Life treatment? First blush suggests 'all' but in reality we can think of this as a Sage 50 initiative for the UK market. That is the company's core application that drives the most unit sales and support revenue in the UK.
- Kelly claims that Sage Life represents a re-imagining of finance for SMEs. That's not true - at least not as he is defining the topic. FinancialForce has had the same and arguably better capabilities for several years. Intacct is already on the Salesforce AppExchange although it is a minor league bit player in Europe. So what is truly new other than the exposure of financial data in what amounts to a slick dashboard?
- How will Sage go from batch to real-time and does it even matter? The assumption that SMEs will be able to go wholesale over to real-time automated processing in Sage systems is fanciful. The SME world doesn't work that way and Sage doesn't have the capabilities to allow for that. That needs to be engineered into the Sage products. My guess is that real-time in this context means something different and more likely 'right time.' If correct then Sage may not have to make big changes to existing software. It will mean changed processes for existing customers.
- What are the use cases that might drive Sage Life? Kelly talks about the separation between those in finance and others. By far and away the most useful addition to Sage would be live bank updates. To my knowledge, the only Sage product with this capability is Sage One, the company's micro business offering. That doesn't fit into Kelly's definition of 10-200 employee businesses. There are manual methods of achieving this which may just work but it is not ideal.
- One clear use case is that where sales people are negotiating new deals but where the customer's account is not in good standing. Having customer's financial data available at the time can allow for changed processes and responsibilities at the sales/field service rep end. But - it is a process change that has to be managed. Will that work in SME accounts? I think so. The notion of telling the field to pick up debts is not uncommon in this segment.
- How is this offering going to be priced? There are no details at the moment but we hear persistent chatter (sic) that Salesforce is becoming increasingly expensive in the minds of smaller businesses. Acquiring 10 licenses of Salesforce core products is far from trivial which begs the question - are there enough Sage customers in the 10-200 cohort to make this a genuine revenue generator for Sage?
- What impact does this have for existing add-ons and customizations for Sage customers? One advantage Sage products have is the ability to tailor to needs. That's a significant disadvantage when considering cloud based products that tend to be configured rather than customized.
- Who will control the implementations? Sage has a large channel focus that will need to be trained and provided with tools that allow the exposure of financial data into the Sage Life system. The professional accountant represents an important element in that channel strategy. Will they 'get' this?
- If this is a play for net new customers then Sage will be going head to head with FinancialForce in some deals. How this plays out is an interesting scenario. My guess is that FinancialForce has more to gain since it is an established cloud native solution. Regardless, it will have interesting implications for market pricing. If you are intrigued with this then will you put both companies on your short list? What about putting Infor on that same list? It plays nicely with Salesforce as well but in a different way.
- Does this change Sage's business model? In theory yes although the short term impact is likely to be negligible. Sage already has a substantial subscriptions business but the core accounting remains resolutely on license plus maintenance. Put another way, the markets were not overly impressed once the announcement became public.
- How will this work in all markets? Sage has a dilemma because its past strategy has been to buy into overseas market with local product. A single code line would solve that problem. Even if such a project exists, building out multi-country capability takes years, perhaps decades. In the meantime, there's a lot of lift and shift to think about here.
- Who wins in this deal? My guess is that Salesforce is the real beneficiary because there is no point in using Sage Life without Salesforce data and we already know that solution reaches far more users than Sage.
Disclosure: Salesforce and FinancialForce are premier partners at time of writing.