Perhaps it’s because Sage North America has experienced a recent spate of executive turnovers, or the fact that its chief executive never had any intention of staying on for the long term.

Either way, there doesn't appear to be much concern about the announced departure of CEO Sue Swenson. For the partners, and the company itself, however, a larger issue is how to finally pull the trigger on its strategy of penetrating the upper-middle market.

But first a brief recap.

After less than three years at the helm, Swenson announced earlier this month that she planned to retire while allowing a several-month transition that will include her replacement by current Sage France CEO Pascal Houillon (see Sage North America CEO Swenson to Retire).

Swenson joined the global business application software maker in March 2008 and will officially depart in “mid-2011,” while Houillon will come to Sage North America in January to initially head up the Sage Business Solutions division, which Swenson has run since the departure of Jodi Uecker-Rust.

Still with me?

During a one-on-one conversation with Swenson, she said she had mixed feelings about her departure as she had become personally invested in the company, which is — to be fair — seeing comparatively better times than when she joined.

So while Swenson slowly fades into the sunset, with plans to ease Houillon into the captain’s chair and perhaps take some college courses she never took and spend more time with her husband, the company will be left with much deeper issues to sort through — not the least of which is brand recognition for its multitude of products, the lack of a clear cloud strategy, and a desire to break into the upper midmarket. This of course is an area where — in North America anyway — Sage has rarely been and longs to be.

But the company may indeed have an answer.

Both Sage partners and top brass alike are looking towards playing a big card that has not yet been dealt: Sage ERP X3 — its self-described "feature-rich" product for the mid-market.
The product — originally known as Adonix — debuted here in 2005, but after a series of setbacks and rebranding issues, now appears to be ready to live up to the original hype.

To be sure, X3 isn’t something that every partner can handle, nor does it appear that Sage would like all of its partners to do so. (See lessons learned from trying to push out MAS 500 to the entire channel.) In fact, only 15 North American resellers currently carry the product, but on all accounts the potential for them and Sage to get a foothold in the upper-midmarket and see significant revenue is quite large. One Sage partner recently reported doing a “multi-million-dollar deal” for X3, with more potentially on the way.

There is of course a reason Sage has been so selective with who in North America can carry X3. By all accounts it seems to have a similar appeal to that of Dynamics AX, causing accounting departments at process-manufacturing companies to drool. Both are “heavy” products, more so in some areas than is MAS 500. As such, not every reseller will find the product easy to comprehend and sell, not to mention that Sage is still doing direct sales of the product, cutting out much of the reseller channel. This, however, according to some partners, will soon change, and more partners will be able to fully resell X3, with Sage acting as sales support rather than competition.

But I digress.

All of this isn’t to say that Houillon and X3, or whoever sells the software, are the answer to all of Sage’s issues, but it cannot be denied that both will help the primarily small- to midmarket-focused company move into uncharted and potentially lucrative waters. Houillon knows both the product and market segment well and, for its part, Sage has not been shy about sharing its joy over X3’s potential. As one executive noted, the North American field is “wide open” for X3 to enter.

All told, things could go either way in the end for Sage, which has in the past bit off a bit more than it could chew. Moreover, its core partners do not want Sage and its rich product line — X3 included — to end up being the greatest story never told.

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