Sage trims its CRM portfolio to accelerate renaissance

Jeremy Cox, Principal Analyst Enterprise Solutions

On February 15, Sage announced that it was selling off Sage ACT, Sage SalesLogix, and the Sage Nonprofit Solutions product suite (managed from the US), as well as four other non-CRM products in Europe. Ovum sees this as further evidence of Sage’s customer-focused transformation and desire to accelerate development of its core hybrid cloud and mobile applications portfolio.

At last year’s Sage Summit, the company’s definition of what constitutes core did not include Sage CRM. With these product divestments, we can expect Sage CRM to move into the limelight along with Sage ERP X3. Both are being developed on the same Microsoft Azure platform and will both benefit from further investments in mobility and social in 2013.

Sage divestments will accelerate its renaissance

How things have changed. In 2001 Sage continued to build through acquisition, buying ACT and SalesLogix in one go. With the advent of SaaS, the growth of and the huge R&D investments from Microsoft in Dynamics CRM, Sage’s long-term viability in the CRM space was at risk.

The company realised this and so the customer-driven transformational journey began in July 2011. Appointing Himanshu Palsule was another positive step a year later as he clearly articulates the impact on customers of disruptive technologies and the imperative to become more mobile and connected. He also explained that developments are completely customer-focused.

This translates into developing simpler and more “native” user interfaces and offering a choice of deployment models. With Sage unburdened by legacy products that don’t fit well with this customer innovation story, we can expect to see the accelerated renaissance of Sage and its portfolio of solutions.

This should be reassuring to SMEs considering Sage products as an option or looking to extend their Sage investments.

Continuity for Act and SalesLogix customers is assured

ACT and SalesLogix are being acquired by Swiftpage, a Sage development partner and provider of digital marketing software for small enterprises. Swiftpage is backed by private equity firm Accel-KKR, and, with a small stake from Sage, existing users of these products should be reassured of both continuity and focused development by the new owner.

As Sage’s transformation accelerates it will deepen its SME footprint

This continuation of Sage’s leaner development strategy will allow the company to accelerate its customer-driven transformation.

North America is a major market for Sage and having a modern and highly engaging platform will resonate well with owners and managers of SMEs, who have aspirations to deliver a joined-up customer experience and engineer greater flexibility into their businesses.

Sage has signaled its intentions to offer native mobile apps to interface with its core products in 2013, starting with iOS apps and followed soon after by similar for Android. Ovum believes this bodes well for Sage’s long-term growth and enables the firm to move onto the front foot.

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19 Feb 2013, 8:27 p.m.

Acquisitions are not more often hard then effective, there are a plethora of such stories and having been through may myself I can recognise the challenges that Swiftpage will have. Will they be able to catchup on development of products that Sage has lacked focus on for a while (according to customers), will an on network CRM weather the storm of an increasing market share of cloud CRM (shortly to be half of all sales based on predictions) and will a USA firm be able to embrace a UK footprint not there before. Staff acquired will face discomfort and change and there is always a period where there is disruption and customers will consider change.

CRM is changing fast and certainly many UK customers were loyal to Sage as a UK brand and may seek out another such partner to keep that sovereignty they have favoured.

Ian Moyse