Sage in rally cry to partner ecosystem to support cloud growth
- Summary:
- Sage is undergoing a transformation with CEO Stephen Kelly at the helm. The transformation now requires partners to get on board with Sage’s change in direction.
Europe’s largest software company, Sage, is continuing its transition to becoming a cloud-based vendor by issuing a rally cry to the partner ecosystem, telling VARS, SIs, consultants and ISVs in Chicago this week that it cannot succeed in becoming the leading cloud financials company without their help.
Executive after executive took to the stage on Sage Summit’s first day - dedicated to the channel - in an attempt to convince those partners in attendance that this is a new Sage, one that cares about its partners, one that’s changing how it operates and one that will work with them to help the whole Sage family deliver growth.
The implication, of course, being that this is a partner community that has been neglected in recent years.
However, with CEO Stephen Kelly at the helm, the man brought in to turn around Sage’s fortunes, and has a track record in fostering partner communities, this could well be set to change. And a number of partner announcements made today indicate that the company is serious about incentivising and working with partners to deliver growth.
Which makes sense when you look at Sage’s most recent history under Kelly. He has focused on partnering and making deals with other vendors (Salesforce, Amazon, Microsoft, Fairsail) to enable Sage to go to where the customers are and for cross selling.
It makes sense that he sees partners as central to driving future cloud growth, both from within the install base and from net-new.
But challenges still remain - there is still the looming presence of a very large customer base that remains on premise that Kelly has committed to protecting, plus a product line-up that is very diverse and perhaps a bit confusing when compared to the likes of NetSuite.
It’s not too confusing. But when you’re talking Sage 50, Sage 100, Sage 300, X3, Sage Live, plus Sage 100c and Sage 300c (the ‘c’ meaning cloud versions of) - whilst you’re giving customers choice, you’ve also got to ask yourself, is this how Sage’s product line would have looked if it started in the cloud?
And partners need to be clear on what Sage is now pushing. Which, was made very clear today: protecting the customer base, but gunning for cloud.
A strategic truth
Sage’s Executive VP of Global Strategic Partnerships & Alliances, Alan Laing, kicked off today’s session by repeating to the audience on a number of occasions:
If there’s one thing you need to remember, Sage is truly serious about partners - about how we grow and work together to develop both our companies. It’s a simple statement, but it’s our strategic truth.
Laing added that whilst Sage has “great products”, he admitted that he needs partners to take those products to their chosen markets in order for Sage to grow. He said:
It’s all about our joint growth. We are here to serve businesses from every stage of their journey, from start up, to scale up and to enterprise.
We have significant aspirations for growth around cloud technologies. We can only achieve that with you and an extended partner ecosystem.
Laing said that Sage was going to spend the week with partners, demonstrating how they could make money from working in the cloud - as the shift to a subscription business model has an obvious knock on effect for partners that charged premiums for implementation and maintenance help.
He also admitted that Sage hadn’t been as partner friendly has it could have in the past, but this was something that he was working to change. Laing said:
I’d like to start by addressing some issues head on that I know many of you have talked me about and have talked to my colleagues about. Since I got here just over a year ago I’ve met with over 1200 partners, and the messages have been fairly consistent. So let’s address them and tell you how we are going to cope with them.
You want to see a product roadmap that you can rely on. You’ve said we can be difficult to do business with. You’ve told us that the constant change and complexity makes it difficult for you to know how to work with us. You want more brand awareness for the great Sage brand, particularly in North America.
These are all concerns that Sage sought to address today.
Announcements
Sage has said that it is going to increase its worldwide revenue via partners from 38% today to 45% - although timescales on this shift aren’t entirely clear. But to reinforce the commitment to partners, Sage announced a number of investments in its partner programme that should make it easier and clearer for companies to sell Sage’s products.- The Sage Partner Program – replacing over 54 worldwide partner programs throughout 2017. Laing said: “We believe that if we do it once and do it better, we will remove the complexity and enable us to invest in real assets which help you grow. One infrastructure, one set of assets, one set of benefits, so that you can focus on taking your customers on a journey to help your grow your business and keep those customers and customers for life.”
- Sage Marketplace - provides ISVs with access to an open ecosystem that allows its members to showcase their Sage developer add-ons. Sage added 150 new ISVs in the first 100 days.
- Sage Partner Community – provides partners with an online environment for communication. Giving access to Sage with content and support services, Marketing Development Funding (MDF) and online education and certification. The Partner Community can also access an online message tool, as well as providing peer-to-peer communication between partners.
- Reward program - Under this new scheme, the top partners will be rewarded with an invitation to join Stephen Kelly and the executive team for a unique and exclusive high level strategy session (a four day break in Costa Rica).
Throughout the morning executives also took to the stage to outline the product roadmaps for Sage’s key product lines, highlighting where it is working with partners, where it is doing its best to introduce new tools to help migrations to the cloud, and where it is making existing on-premise systems cloud compatible. Whilst there was an awareness that a lot of customers are still on-premise and are likely to be for a while, Sage appears to be lining everything it has up to make it easy to become cloud enabled as soon as customers are ready.
We need each other
Finally, CEO Stephen Kelly to the stage to give his assurances to the partner ecosystems that Sage is “committed” to working with partners and that the company is putting them “front and centre”. He said:
If there is one thing that you take away from this week, I hope that it’s that Sage is serious and committed to partners. We are a partner centric organisation. We want to play a bigger role with you, a more fundamental role in the future.
In the eyes of the customer we are all extensions of one another and you are often the face of Sage.
Interestingly, Kelly didn’t shy away from the fact that cloud probably isn’t financially appealing to many of its partners, given the revenues they have been able to bring in from on-premise implementations. However, he believes that this will change and that the focus should be on partners customising and selling Sage’s solutions for vertical industries. He said:
Our existing customers want cloud. Our prospective customers want cloud. The number of cloud ISVSs will have doubled from today to the end of 2017. Cloud services will increase by a factor of ten next year alone. And the cloud will commoditise certain elements of the traditional value chain.
So we need to help you find ways to differentiate, to take advantage of the growth opportunity presented by cloud. As partners I think you have to be really focused and specialise. We want you to build rich, horizontal and vertical market solutions within the Sage Marketplace.
This will expand the reach of existing solutions and increase our vertical capabilities together. Enabling you to specialise in industries not previously possible.
My take
Today was a recognition from Sage that it cannot do this alone. It is all too aware that its install
base is stubbornly on-premise and that in key cloud growth markets like North America it doesn’t have the desired brand presence. However, if this morning is anything to go by, it is working hard to do everything it can to get its partners to throw everything they have at cloud.This will allow Sage to ‘protect’ its customer base, whilst also incentivising the ecosystem to push for those cloud migrations. Simplifying its partner programme is a good step in the right direction. And partners at the event did seem to react well.
Will Sage be able to become the leading cloud financials company? That all depends on how it balances its history with its future ambitions. Move to fast and you alienate your primary revenue stream. Move to slowly and you fall behind in a market that is evolving at a rapid rate. Kelly has a tough job on his hands.