Only months after announcing a re-branding strategy for all of its products, Sage North America is now moving forward with plans to offer customers subscription pricing on all mid-market enterprise resource planning and customer relationship management products, a move the company claims will offer partners and customers more revenue and pricing options, respectively.
As part of the new plan, which begins April 2, Sage customers can select monthly subscription plans for Sage 100, 300, 500 and CRM products. Proposed monthly pricing will be per user per month, specifically $110 for Sage 100; $130 for Sage 300; $160 for Sage 500; and $35 for Sage CRM.
The new plan also calls for:
• The inclusion of ERP, financial and operational reporting and Sage Fixed Assets - Depreciation
• Full user access to all “Premium” product functionality
• Unlimited access to Sage Support, knowledge base and Sage University anytime learning
• Free updates and upgrades
• A 20 percent discount off real-time training and $200 discount on Sage Summit registration
• Additional software or options outside the product bundle available for a small additional fee per month.
• Sage Business Care Silver Plan available for $10/month reduction in fee, Sage CRM users $35/month, Payroll $50/month
“We are rethinking how we can grow revenue overall and this is one of the steps towards doing that, in addition to product innovation,” said Sage executive vice president of mid-market and CRM solutions Joe Langner. “We’ve done lots of research and looked at partners and customers and how to be successful in the mid-market space. Customers are willing to invest in technology, but the bar has been raised a bit on the value they’re getting, and the selling process is more challenging. Sage is in a unique position. Most partners have substantial customer bases. This will drive new customer acquisition, and I believe the financial impact will be minimized.”
The new plan also calls for changes to how the reseller channel can earn, by offering the same tier for all sized partners. Specifically, all partners—regardless of size—will earn a 35 percent tier margin during the first year of the new program and 20 percent thereafter.
To retain the 20 percent tier margin, partners must be certified to sell whatever products they represent, add one new sale per quarter, and be engaged in representing Sage in the marketplace. In addition, customers will be billed monthly, while tiers and compensation are paid monthly as the customer pays the invoice.
“I see this as a real opportunity for partners to grow their business,” said Sage vice president of channel operations Tom Miller. “For the first time we are taking the price of buying an on-premises solution out of the equation. The partner now has lots of options. Our most successful partners are successful because of the services they provide. We’re not eliminating the ability [for customers] to buy a standard license. We’re just offering more options in how they can buy, and it’s options customers want. If [partners] can increase the amount of customers they add, there are additional service revenue opportunities for them.”
Miller added that there will be several training and information webcasts focused on aiding partners with the new pricing and payment plan. On March 14 there will be a webcast on brand transition; information on subscription pricing and Firm of the Future on April 4; improving customer value and subscription pricing on April 12; internal training and selling subscription pricing in late April; referral marketing in early May; and a follow-up on brand transition on May 9.
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