Sage May Leave Traditional CPAs in the Dust

By Rick Telberg

As technology moves to the cloud and goes mobile, traditional accounting software sales and support businesses will be left behind by new business models built for subscriptions and high-end services. This could be bad news for the majority of accounting technology dealers and service shops. But to the executives at Sage North America, it’s their best hope for regaining relevancy in the U.S. market.

Sage, already a global brand based in the United Kingdom and helmed by French executives, has long trailed in the U.S. with a motley mix of mismatched products ranging from Peachtree, and Accpac to MAS 90 and Timberline. But over the last few years, new leadership has been heaving brand names over the sides like so much ballast.

So at this year’s annual Sage Summit for resellers and end-users, Sage’s new strategy started to come into sharper focus. And, as far as accountants are concerned, they are both at the center of the strategy and in the line of fire.

As explained by Connie Certusi, Sage EVP in charge of small business solutions (nee Peachtree), accountants bring in half the company’s business, but the accounting business is in desperate need of a business model makeover as the fundamental economics of the tech business shifts.

Sage is taking a notably evangelistic role in preaching to its accountant referral base about the virtues of modernization. The race will belong to the smart and the swift. There is no second place in the long run for obsolesced businesses. Unless, of course, you really love the typewriter repair business.

Speaking at the company’s Sage Summit in Washington, DC Monday, Joe Langner, executive vice president and general manager for the midmarket business at Sage North America said the company expects to see more channel consolidation.

“There will be more individuals in the channel, but probably fewer organizations,” Langner told media and analysts.

“While channel consolidation is evident on many fronts,” according to Robert Dutt of ChannelBuzz.ca, “it’s something of a reversal for Sage Group – which has long had a huge channel program due to its tendency to work with small specialist solution providers and accountants and other independent financial professionals. Langner’s suggestion: the smallest of the company’s small partners are starting to band together to survive in the market.”

Such a move would no doubt serve Sage well, Dutt says, particularly as Langner took the cross-sale message to channel partners, urging them to “take advantage of new solutions to expand their business,” particularly as the company moves to a simplified product lineup of ERP offerings for startup, small, and midsize businesses, all backed up with a variety of common connected services such as payment and mobile apps that work across its offerings.

Posted on July 23, 2013