After spending the past five months in the U.S. and five weeks officially at the helm of Sage North America, chief executive Pascal Houillon admits that he has his work cut out for him at the giant software concern when it comes to increasing brand recognition - particularly among the accounting community.
In an interview with Accounting Today, Houillon was candid with his views of the company he now leads, as well as the challenges faced by the brand, products and channel as a whole.
Formerly CEO of Sage France, Houillon came aboard Sage North America in January, succeeding Sue Swenson, who departed the California-based company at the end of March.
Houillon explained that since coming to the U.S., he has been familiarizing himself with key channel players and how the Sage product line and brand in North America are perceived. What stood out most, he said, was the stark difference in how Sage's recognition level in the U.S. lags far behind that of Europe.
Given that, one of Houillon's first orders of business will be to focus on increasing brand awareness and what he called Sage's overall "value proposition."
"In Europe, Sage is a very well-known brand and they are a market leader," said Houillon. "I realized after a few weeks, here we are known more by the product names [such as MAS 90, Peachtree or Accpac], rather than the brand. Even if we have done some work, they are still focusing on the product name here, and Sage brand awareness is low. I am not sure people here understand what the brand really means."
Houillon also comes aboard a company that has been marked by a number of executive departures. In addition to Swenson, who left after less than three years at the helm, Sage Business Solutions head Jodi Uecker-Rust exited last fall. In December 2010, executive vice president of sales Paul Johnson left to join rival Intuit, while just last month chief technology officer Motasim Najeeb resigned.
Houillon did not divulge any specific plans to give brand awareness a much-needed boost, though he did note that it would take time, and added that some details will be revealed at the upcoming Sage Summit 2011 user and partner conference in July in Washington, D.C.
Another task for Houillon and Sage, he said, would be increasing the company's connection to the CPA community. He claims that outside of the U.S., Sage is "much more connected" to accountants, as that business sector contributes more to the company's bottom line than here.
"We definitely need to invest more [in CPAs] over here. I know some people in our business have invested time and we can see already some attention from the CPA channel, but we have not yet leveraged it," he said. "It's a full strategy we have to elaborate on, and so critical to our future."
Houillon also explained that he realizes that the partner channel is vital to the company's growth and success, and that in North America, as well as other markets, the channel has been shrinking. However, Houillon is confident a change in planning and focus for channel partners will lead to better times.
"We have to ask [partners] to move to the new market; Connected Services and SaaS are the future, and it will be hard for them to sustain the way they work if they do not," said Houillon. "We all have to change the way we think. For the past few years, we and our partners had been looking at the bottom line and now we have to look at the top line. Change management will be difficult. We have to go back and get some market share and be more connected to the market."
With product investments, particularly in its ERP line, Houillon believes that Sage is primed for growth. The Sage ERP X3 product, for one, is receiving more attention from the company's developers and its channel.
"We have a very positive buzz around [Sage X3], and it is picking up in other countries, but we still have to increase the investment here. The market here is open and we are trying to invest in R&D around the product here, and we are on our way towards building that team and want to grow it," said Houillon. "In France, we decided to fit a more mid-market product for X3. Here we are going to have a strategy for core mid-market and a strategy for upper mid-market. We should have more to say about that in June."
In terms of Sage North America's strongest product lines, Houillon said that, while they all have their strengths, he saw Sage Simply Accounting and MAS 90 as particular highlights of the Sage product line. Ultimately, he sees products moving more towards the SaaS model, but he admitted that shift would take some time.
"There are a lot of things we want to do; we can't say we have a new, full SaaS offering and this is how you will do it. We want to bring our customers with us and it's going to be a long journey," he said. "We believe the hybrid [cloud and on-premise] model will be the right one for now, but the future of our products will be cloud through Connected Services. We see a strong demand from our install base to try to integrate things from the cloud to on-premise, but step by step we will move the needle."
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