JUST SAGE-360 FADES.
In a company that has seen a number of name changes, Sage Software has been renamed simply as Sage for public consumption, in line with the way the rest of the companies of the Sage Group operate outside of North America.
The new URL is www.sagenorthamerica.com. The new branding strategy of "Just Say Sage," [OK, that's not Sage's phrase] is in line with what the English parent, Sage Group, does in operating units in other countries. There is also a retreat from the Sage 360 marketing program that tried to establish the corporate name in the United States; too quickly in my opinion. At an interview at Sage's Summit Conference, Sue Swenson, CEO of what is now called Sage North America, was asked if the 360 program buried some of the company's product brand names. "It is likely it did," she said. She referred to the 360 program as "in transition." Swenson pointed to programs such as "Intel Inside" as examples of campaigns in which product brands are maintained while another brand is also promoted and suggested that will happen with some Sage products in this country.
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EXACT SOFTWARE DROPS 2008 OUTLOOK.
Exact Holding, parent of Exact Software, said because of the current economic environment, it will no longer provide a specific outlook for results for 2008. The company's prepared announcement also noted that it had cut its headcount by about 10 percent to fewer than 2,500 employees as the result of what it termed "a further organizational alignment within the Americas and Netherlands regions and a global recruitment stop as per August 2008." The board expects EBITDA for 2008 to "be at least on the same level as for 2007." CEO Raj Patel said the company first experienced a "notable impact from the current economic conditions on license revenue" in October with results falling below expectations and deals continuing to be postponed in most regions.
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SAGE READIES RESELLER SCORECARD.
Sage is putting together a partner scorecard that is designed to use eight metrics to assess reseller performance. This includes metrics regarding customer health, new customer acquisitions and the installed base. Since Taylor Macdonald, who had handled channel issues, was ousted along with three other senior managers in 2007, Sage hasn't had a senior person that's been listed as in charge of channel programs. During interviews at Sage Summit the only executive that dealt in detail with reseller issues was Doug Meyer, president of Sage's industry & specialized solutions division. I kept getting the feeling that Meyer could turn into the official channel guy and that there is a need for someone at this level of management to be designated for the role.
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BUSINESS ONE TO GET NOISIER?
A lot of questions have been coming my way about "Whatever happened to Business One?" The new guy on the block, Conrad Mandala, the vice president who is handling channel development in the United States and Canada, agrees the SAP operation needs to get its message in front of more resellers, especially the larger resellers in this business. VAR recruitment will focus on coverage that's lacking in some major metropolitan areas. "The messaging I have been giving my partners is that SAP has done a bunch of great things that have been under marketed," Mandala said. The unit that handles Business One is going to start sharing best practices and is forming a reseller advisory council.
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SAGE SAMPLES ABOUT SELECT.
Sage North America is contacting resellers to ask their opinion of the benefits and disadvantages of Sage Select, the program by which it rewards resellers who handle only Sage financial products with two extra points of margin and some other goodies for their loyalty. Given the number of Sage VARs who have taken on products such as Deltek Vision and Intuit's QuickBooks Enterprise Solutions, I don't believe the program is doing what it was originally designed to do and it appears that Sage is as at least trying to determine what, if any, modifications ought to be made. In other interviews at the Summit conference, the party line appeared to be to question whether Intuit is committed to the channel. That line came independently in interviews with Himanshu Palsule, who runs the MAS business directly as a general manager and supervises other GMs who handle ERP product lines, and Meyer. They certainly sounded like they were reading from the same script. My read is that Intuit CEO Brad Smith is very ambitious and I don't see him as the kind of person who's going to back off.
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EPICOR CUTTING JOBS.
Epicor Software has cut staff and implemented spending controls which it said will result in annual savings of between $16 million and $20 million. While the company said it would not disclose the number of jobs cut, reports in the industry placed the number at 300. Epicor said it was also curtailing technology initiatives and that it would incur restructuring charges of about $4 million for the quarter ending Dec. 31. The company called the actions part of an ongoing comprehensive review of its operations and business plan. Epicor has been battling a hostile tender offer by Elliott Associates, a hedge fund, and there has been speculation it might be the subject of an acquisition by Infor.
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EX-SAGE VP LANDS AT CSC.
Jim Foster, who was one of four senior Sage Software executives ousted last year, has landed a position as vice president of marketing and strategy of the property and casualty division of CSC, a public company based in Falls Church, Va. Foster, who was the one and only chief technology officer for the Sage unit at the time of his departure, had previously been EVP of the mid-market business units at Sage. Former CEO Ron Verni, who was briefly CEO of Corrigo post-Sage, lists himself as an independent computer software professional in his Linkedin profile. The Corrigo experience isn't part of his public profile.
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NET@WORK BUYS BTS.
Net@Work, a New York-based reseller that is one of Sage's largest VARs, has moved into North Carolina with the acquisition of Business Technology Solutions, a Raleigh-based organization known for its sales of Sage's Abra HRMS software. BTS was owned by Lissa Johnsen, who will head Net@Work's new HR practice from the North Carolina office. Net@Work said the acquisition signaled its intention to establish a national presence in 2009. Its prior acquisitions had been concentrated in the New York metropolitan area. Net@Work co-owner Alex Solomon said there were no specific plans that have been formulated for a national expansion. His company has also hired Peter Conway, formerly vice president of marketing for SWK Technologies of Livingston, N.J., as a manager of consulting services. Most interesting was that Solomon reported that Swenson, who had visited Net@Work's offices last month, had offered the services of Sage's M&A person to provide advice and also sent an email congratulating Net@Work on its purchase of BTS. That, he said, was something that hadn't happened under the previous Sage management.
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SAGE OFFLOADS TAX COMPLIANCE.
Sage has completed the offloading of its payroll-related business by selling its tax compliances services for its Abra customers to Empagio. In September, Sage transferred the payroll services that it had spent several years developing to CompuPay. Sage said it also had an agreement via which Empagio would support integration of its services with Abra. Sage's compliance services was built from the company's 2004 acquisition of Federal Liaison Services for 10.4 million pounds, which was in the range of $19.3 million at 2004 exchange rates.
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ELLIOTT EXTENDS EPICOR TENDER OFFER.
Elliott Associates, which owns 12.5 percent of Epicor Software's stock, has extended its tender offer for Epicor's shares until Dec. 3. The offer had been scheduled to expire on the past Tuesday morning. Elliott said 14,419,173 shares have been tendered. Meanwhile, the Epicor board reiterated its rejection of the Elliott bid. Originally, Elliott offered $9.50 a share, when Epicor stock was trading at $6.50. Earlier this month, the offer was dropped to $7.50 a share. Epicor stock closed yesterday at $3.59.
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NEXTEC STARTS RECRUITING UNIT.
NexTec, a Seattle-based Microsoft and Sage reseller, has formed NexTec Recruiting Services, in cooperation with STS Recruiting. The company will serve resellers and endusers in the financial software community. It will offer permanent and contracted staffing services to Sage, Microsoft and other ERP endusers, ISVs and VARs and will focus on technical, accounting and consulting roles.
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MICROSOFT DRAWS PESSIMISTIC VIEW.
Regardless of what Microsoft said about strong sales of Dynamics for its September quarter, the mood does not appear good. One major Dynamics dealer, who had very harsh words for the management of Microsoft Business Solutions, said he believes that Microsoft ultimately wants to shuffle aside Dynamics GP in favor of the NAV and AX products. (Microsoft has said it's committed to all four ERP packages.) One Sage reseller said that while it had appeared Microsoft had "gotten its act together" after some tough sledding the first years of MBS's operation that it seems to have lost its footing again.
The other picture that is emerging is of a not-very-friendly organization that is tough to do business with.
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QUICKBOOKS SALES LAG.
Intuit turned in 8 percent growth in revenue for its first quarter ended Oct. 30, but its sales of QuickBooks units are off and the company reported that sales to new users are running below expectations. It said upgrade revenue was meeting expectations. The company reported a loss of $52.1 million, up from $20.8 million a year ago. Last year's bottom line benefitted from $41 million from the sale of its outsourced payroll business and securities and investments. Revenue rose to $481 million, up from $445 million in last year's corresponding period. QuickBooks revenue rose 6 percent to $151.9 million, but when two acquisitions were backed out of the number, the QB totals were up only 1 percent and the number of QuickBooks units sold for the quarter were 267,000, down from 298,000 a year ago. Meanwhile, the number of active users of QuickBooks Enterprise Solutions rose to 34,000, up from 33,000 for the fourth quarter ended July 31 and up sharply from 28,000 in last year's first quarter. Intuit lowered its previous guidance for fiscal 2009 and now expects QuickBooks revenue to rise by 5 to 9 percent, down 3 percentage points from the guidance that had been issued in September.
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COLUMBUS IT REVENUE RISES.
Columbus IT Partner, a major Dynamics reseller based in Denmark, reported EBITDA of roughly $5.8 million for the third quarter ended Sept. 30, while revenue reached about $119 million worldwide. Based on figures reported in Danish kroner EBITDA was up 53.1 percent while revenue rose by 15.2 percent. Revenue for the U.S. operations was $16.4 million, flat in Danish Kroner (96.7 million), but rose by 13 percent when adjusted for currency translation while EBITDA hit $1.97 million, down 2 percent because of the currency translation. The company continued to see its sales mix shift to Dynamics AX, which reported 65 percent of the total for the most recent quarter, compared to 59 percent a year earlier. Sales of Dynamics NAV dropped to 23 percent of revenue, down from 25 percent.
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PACESETTERS SELECTED.
For better or worse, the 100 members of the 2008 Accounting Technology Pacesetters class has been selected. They will be named in the December issue and will appear in a chart that will also be available when the issue is posted on WebCPA.com next month and later when the print version ships. There is one change to the process this year-the thumbnail sketches of each of the lucky 100 will not be published in the print magazine. The sketches will be included in the story when it is posted to the Web.
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TREY LOSSES OUTSTRIP REVENUE GAINS.
Trey Resources, whose revenue comes almost solely from its SWK Technologies Sage software reselling business, reported a loss of $1.87 for the third quarter ended Sept. 30, up from $1.2 million in last year's corresponding quarter. Revenue reached $5.71 million, up from $5.56 million a year earlier. And the operating loss actually narrowed to $353,837 from $593,383. But the bottom line took a hit from a loss from revaluation of derivatives of $1.29 million, which was a wide swing from a gain of $404,975 a year earlier. The company made up some ground on the amortization of discount on debt conversion, which represented a loss of $73,393, down significantly from a loss of $730,101 a year earlier.
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RANDOM THOUGHTS.
After my 401(k) statement came in showing a minus 30 percent return for the year, I had to adopt a strategy to guarantee I won't outlive my money. I've decided to stop taking care of myself, eat a lot fatty food, drink to excess and start smoking again. That ought to take care of it. ... There was a street fair on Broadway here in the Big Apple a couple of weeks ago. I saw stands selling a variety of inexpensive items such as crepes, burritos and General Motors stock. ... Sage North America CEO Sue Swenson missed the first day of the company's Summit user conference to attend a meeting of the Wells Fargo board of directors. That led to my most important question for her: "When will my checks stop saying Wachovia?" ... A sign of the times: the clock radio at the Hotel in Denver was one with an iPod docking station. ... Sage's big night of entertainment at Summit was an "Evening with Cirque," which seemed to be second stringers from Cirque du Soleil. The performance inspired me to plan a middle-aged version, Cirque du Bengay which will feature performers trying to touch their toes, keep combovers in place and reduce their waist lines.
