Sage Software had plenty to celebrate this year - and they threw a party to prove it.
At Insights 2007, its fifth annual partner conference, which hosted more than 3,000 attendees at the Gaylord Palms Resort here, the software conglomerate touted its revamped organizational structure, with new divisions focused on industry verticals, rather than business size, and inaugurated a chief technology officer position.
"We know who keeps us in business, we know who signs our paycheck," said Sage chief executive Ron Verni during his keynote address. "Our mantra has been 'Customers for life.'"
Perhaps tops among the company's messages to confab attendees was the need for businesses to cultivate a more meaningful customer experience - moving beyond providing a commodity service.
Sage, which last month posted $496 million in revenues for the six-month period, has been one of the fastest-growing software vendors over the past decade. Since 1998, it has acquired 22 companies, and currently employs roughly 5,000 employees, up from 1,250 in 2001.
Recently, Sage garnered headlines with a restructuring that formed a pair of new divisions - a Business Management Division and an Industry & Specialized Solutions Division.
Prior to the revamp, Sage consisted of the Small Business Division and the Mid-Market Division, which executives said forced customers to change contacts when they outgrew a division and its product lines.
The Business Management Division, headed by Nina Smith, the company's former chief marketing officer, will manage accounting, enterprise resource planning, customer relationship management and related businesses through its Strategic Business and Value Business Units.
One of the benefits to the latter unit, which includes products such as DacEasy, Timeslips by Sage and BusinessWorks, is that "customers will no longer be subject to strong suggestions to migrate to other products, but rather will get more attention from Sage Software resources dedicated to the value products customers choose to continue using," according to Sam Hunter, senior vice president and general manager of the Value Business Unit.
Meanwhile, top leadership in the company's other divisions - the Payment Services Division and the Healthcare Division - remains unchanged.
Smith said that there is a gap in customers between the Peachtree by Sage and Sage MAS 90 ERP product lines and that, as a result, the company is losing customers with businesses that have five to 15 employees.
"We need to turbo-charge what we're doing at Sage; we need to improve our position," she said. "We should aggressively go after our competitors' customers and make them ours."
Doug Meyer, former president of Sage's Small Business Division, now heads up the Industry & Specialized Solutions Division, which incorporates construction and real estate, nonprofit, and employer solution applications. "We're in the process of expanding our approach in HR and payroll into a broader set of standards; that's the plan we're putting together," he said. "In the case of the vertical or industry businesses, we understand them very well. It's a matter of taking a more disciplined approach to growth."
To help usher in the new strategy, a chief technology officer position was created, and Jim Foster, who formerly worked as an executive vice president in the company's Mid-Market Division, will take on this new role. He said that because companies in the small to midsized market need remote and mobile access to technology, are showing more of an interest in software as a service, and have an expectation of simplicity, the company's technology strategy will tackle these customer needs.
"The intuitiveness of our products probably is not at the level I would like to see us at," Foster said. "We have to think about who's using the products now. We've got a new generation of customers."
Though the company just released DacEasy 15, a module-based accounting package aimed at small businesses that have less than 25 employees, there was some concern about the restructuring.
"In the past, Sage has scared clients from the low-revenue-division packages to the higher-revenue packages by spreading rumors that those packages will no longer be around," said Dean Penderghast, a Peachtree and DacEasy consultant at Sales Automation Services Inc., in Anaheim, Calif., adding that such tactics took place about three to four years ago. "What I do not understand is there are packages Sage owns [such as] DacEasy [and] BusinessWorks, that really fit the niche between Peachtree and MAS 90. They took those packages and pushed them aside."
A Sage spokesperson declined to comment on its previous upselling tactics.
At the conference, Sage also unveiled SalesLogix V. 7.2. The tenth edition of its marquee CRM application includes a multi-client architecture that supports a variety of mobile users.
Stephen Blythe, chief executive of Laguna Hills, Calif.-based Blytheco LLC, was enthusiastic about the management restructuring plans after he had an opportunity to talk through his concerns with senior Sage management. "I was initially concerned about combining the VAR-based product lines like MAS with the direct sale and retail products like Peachtree under a common Sage management team," he said. "They are very different customer types with different methods of delivery and different needs. However, it does make sense to manage product development and design under one management structure to leverage product migration strategies and consistency. We expect the new structure will result in a reduction in duplication of development efforts and a much cleaner migration path between products for our customers."
Others, such as Eric Fetterolf at Aries Technology Group LLC in Knoxville, Tenn., wanted to find out more about the restructuring. "They're saying all the right things for all the right reasons," he said, adding that his consulting firm has been assessing its strengths and weaknesses to weigh their product offerings. "But as they said, it's about execution."
"I think it's great. As they want us to focus, I want Sage to focus," said Partner of the Year Mike Griffith of Alliance Solutions Group, based in Brandon, Fla. "So now they have some autonomy, they can be quicker, faster and more agile."
IN THE PIPELINE
Through this year, new CTO Foster's North American Technology Office will focus on Project 360, a strategy that will aim to come up with a common technology framework that will work across all of Sage's products.
"We are really being managed to enable us to grow into our market segments," explained John Geffel, senior vice president and general manager of Sage's construction and real estate solutions. "I think what they've done is that they've really recognized these specialized and vertical businesses need to be managed as individual entities."
Griffith's colleague at Alliance Solutions Group, Russell Clark, a CPA and director of client services, said that he fully supports the restructuring.
"I love it from a standpoint of the client base," he said. "I really do believe the vertical base is the future."
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