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First, Sage is not looking to sell the Construction and Real Estate(CRE) business. Since the day I arrived here from Microsoft two and a half years ago, I have gotten a call almost weekly asking if we want to sell. If we were, I'd be at the head of the line.
This is a great business that is growing nicely! CRE is different from the others and here's why. Nonprofit Solutions, while a great product line and popular in the nonprofit sector, was not the market share leader as is CRE, and the investment required to make NonProfit the leader would be better spent on other activities that align to the strategy.
ACT! and SalesLogix are great products, but we have three CRM products. Choosing one and integrating with all our products is a more focused approach, thus the sale of those two products. CRE is relevant to Sage in terms of growth and revenue representing an even bigger percentage of North American revenue with these divestures.
Sage has several cross-sell initiatives within North America, such as payments, in which CRE is significantly participating. Additionally, the construction and real estate sector is a huge sector in North America, and we share a significant amount of customers in this sector across other products like Sage 50.
There were a few other subtle signs that were not present with the other products. Collectively there were seven products that were sold off, all but one were Not rebranded; subtle, but a telling sign. Additionally all those products were placed under Marc Loupe the CFO, again subtle but they were not connected to either the small business or mid-market growth engines. Those products Sage decided to keep got placed into either mid-market with Joe Langner (this is where CRE lives) or in small business with Connie Certusi.
While technically CRE is classified as a non-core business, we are very integrated into Sage as a key component of the portfolio and growth strategy.
Sage continues to make investments in the construction and real estate space. Pascal said it best, "non-core does not mean non-invest." CRE spearheaded the development of our Microsoft Azure platform offering Sage Construction Anywhere.
Even setting aside the fact we add a customer a day with Sage 300 CRE or Sage 100 Contractor, we have 40,000 construction customers to sell Sage Construction Anywhere to. That is the power of being the market leader and one obvious reason we're not selling this business.
Jon Witty is the vice president and general manager, Sage Construction and Real Estate at Sage North America. http://na.sage.com/sage-construction-and-real-estate/presskit/