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Technology / AI and automation

SAGE DOMINANT IN EUROPE BUT SLOW TO DELIVER SAY RESELLERS

In a move to enlarge its share of the PC-based accounting/business management software from the UK onto the continent, Sage Group Plc has been on an acquisition spree over the past 18 months. In Germany, the Newcastle, UK-based company has acquired market leader KHK, while in France it gobbled up three competitors – Sybel, Saari and Ciel – which each held strong positions in the high, mid and low-end of the market. Since acquiring the companies, Sage has acted quickly to establish consistent, well-understood policies for establishing a qualified community of valued added resellers in both countries. For the most part, the move has been well received, since dealers in both countries had long complained about too-liberal pre-Sage licensing policies. In France, it has established a three-tiered ranking system, complete with testing, to evaluate VARs depth of experience. Sage responded to a request we had been making for years about qualifying and identifying competent VARs in a way that clients could easily identify, said one Strasbourg-based VAR. German dealers reported that Sage-KHK is taking additional measures to ensure that its VARs are well-qualified.

Market dominance

I’m optimistic about the future, one VAR noted. KHK has taken a first step in the right direction. Two French VARs, however, noted that the change in VAR-accreditation policy has been accompanied by a decline in the number of sales leads Sage is generating for them. We paid for the contract, passed its tests, and yet we’re less a part of its distribution network than before, with less rebate, said a Lyon VAR. Salespeople have become too administrative, not focused enough on generating sales, said a Paris-based source. Even in the UK, where Sage has stopped recruiting dealers, it has created a Solution Center status, which dealers have to earn. Nonetheless, some UK dealers question Sage’s ability to retain dealers. Some say they are upset because Sage charges them a fee to develop their own applications to work with Sage’s, but they remain loyal because of Sage’s market dominance. Indeed, with its acquisitions, Sage can easily lay claim to market leadership in all three countries, with VARs and dealers in all three countries generally perceiving Sage’s products as the best for the money. There is no competition to Sage for management software costing between FF5,000 and FF20,000 ($800-$3,300), said one Paris-based VAR. KHK is No. 1 in Germany, and it cannot be easily dethroned, said a German VAR. In France, Sage has had to merge the three software editors’ packages. Both Sybel’s and Saari’s software cover all areas of company activity – accounting, human resources, sales management, finances, payroll and credit management. Sybel’s line runs in DOS and Windows, but is not yet available in a client/server version. Saari’s products, which produced over $40m in revenue in 1996, run under Windows, DOS, Macintosh and Unix, as do Ciel’s. Priced at approximately $160 each, Ciel’s products are sold primarily to small and medium- sized business clients, of which it claims to have over 80,000. Sage has created a more homogenous product line and cleaned up certain modules, said a Paris VAR. Only one French dealer referred to waiting to see the promises of massive investment in the products realized. Another Paris-based VAR of Mac-based products, is angry at Sage for issuing new software versions containing bugs not present in previous versions. The company has no sense of responsibility as an editor, he said.

By Marsha Johnston

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A few German VARs complained of the long wait between product announcements and their actual release. Sage gets customers excited about new features and then we all end up waiting, one VAR noted. It can be frustrating. Fortunately for Sage, they noted, the competition is not much faster to market, and tends to be more expensive. Furthermore, say German VARs, Sage-KHK products are in demand because they are built for the needs of German users. There are many quirks and oddities hidden in German business processes, one noted. KHK has paid attention to this and worked this functionality into its packages. Many agreed that Sage-KHK products stand out for their compatibility with the euro. Small and mid-sized companies only have the resources to afford one mistake, one VAR explained. Many are still working on 286s with DOS. They need to take a quantum leap into the future and it’s a move they can only trust to a market leader like KHK. Ironically, the company’s greatest weakness with product appears to be in its home market due to the delay of the Windows version of its high-end product Sovereign. The Windows version of Sovereign originally was due out in February and is expected soon. But even this new product may not be complete. UK dealers said they expect the company to deliver Windows ledgers, but order-processing and stock-control modules are still a long way off and may not be usable this year. The conversion of Sage’s Multisoft product to the client/server platform is also reportedly running late. Sage asserts there has been no great demand for a Windows version from its DOS user base, but some UK dealers strongly disagree. Even small businesses know they have to get off DOS now, said one. Almost all competitive packages now run on Windows, noted another. A lot of Sovereign users are looking for a Windows-based product and need to do something soon because of the Year 2000 issue. Despite the criticisms often made of a market leader, VARs in all three countries agree that no competitor threatens Sage’s dominance. Nonetheless, they all cited Denmark-based Navision as the rival to watch.

Solid technology

Two UK dealers mentioned the growing strength of Navision at the top end of the PC market and one said the company could even skim off the top 10% of Sage users. A new Navision VAR said, Okay, Navision costs twice as much as Sage (about 20,000 pounds for a 15-user system against 10,000 pounds for a similar Sage configuration), but you get much better management information and the cost over a seven-year period is not really so great. In the UK, Navision has nearly 50 dealers. Other UK competitors include Access Accounting, which has more than 60 dealers with plans to grow to 100. Access has grown over 40% in the past two years. French VARs consider Navision’s product solid technology, but they do not think it is not yet investing enough in the French market to put a dent in Sage’s two-thirds market share. Sage’s strongest rival in France is CCMX, due to its powerful ties to the accounting profession, but it generally targets the high end. Other French competitors most often mentioned, Businessoft and Meteor, were characterized by one Paris VAR as 15 years behind Sage’s technology. German VARs consider Navision to be Sage’s strongest competitor.


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CBR Staff Writer

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