The end of ERP and product confusion — the Sage Summit saga continues

Cloud! Hybrid! Mobile! Choice! It was all on offer at Sage Summit. Here's a rundown on what was announced and my general impressions of the show.

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At Sage's annual conference in New Orleans recently (disclosure: Sage covered my travel and expenses to attend the event), there were a raft of product announcements and exciting demos of mobile technology. But while it is relatively easy to announce things and demo mockups, it is far more difficult to actually deliver innovation within a legacy business.

The overarching theme at the event was one espoused often and vehemently by Sage's vice chairman and president, Stephen Kelly. Kelly reiterated over and over again that the company has far too much respect for its customers to force them to change. He told the attendant masses that over 80% of Sage customers use desktop solutions and that the majority don't want to change from that. He pointed out, time and time again, that Sage will not be end-of-lifing its desktop products and will not force users to change to cloud solutions. He criticized other vendors for using what he sees as disrespectful tactics to get them to migrate to cloud products.

But in something of a jarring dichotomy, he also talked at length about the incredible value that cloud solutions bring to customers. He even invited Keith Block, COO of Salesforce, to beam in for a live link during the keynote, and both men waxed poetic about Sage's new solution, Sage Live, which is built on top of Salesforce's platform. And Microsoft's CEO, Satya Nadella, put in a cameo appearance and also talked of the value of the cloud. Was I the only person in the room who saw the unusual contrast between the messages here?

On the one hand, Kelly was breathlessly talking up the value of the cloud, but at the same time was proposing a kind of a hybrid solution that we've seen attempted (with, generally, failure) by previous vendors. While the idea of running an application on premises, and having the ability to move seamlessly to the cloud sounds good, it introduces technical hurdles that compromise much of the value of either approach.

Sage's CTO layered on the on-premises love even further. “If you’re in love with your current Sage product, we don’t want to disrupt that romance,” he said, explaining “we helped invent on-premise, so we know why you love it so much.”

Of course, there are reasons for the slow pace that Sage is taking to the cloud. Have no doubts about it, Sage is a publicly listed company that is hooked on the cocaine-like allure of traditional revenue streams. The markets, focused as they are on quarterly earnings, would punish the company severely if it were to forgo these profits for a longer-term view. This is, as an aside, the real concerns with being a legacy listed company, and much of the reason that organizations like Dell and BMC have taken themselves private in an effort to make the moves they need to outside of the public market's gaze.

Although, if you were to believe Kelly, you'd think that being listed had zero relevance to Sage. In a somewhat hilarious answer, at least to those cynical enough to believe it is totally fictional, Kelly told the analyst session his view on the stock market.

"I don’t even look at the stock prices, I don’t know what they are," he said. "I just worry about our colleagues, our customers and our partners. If we are doing the right thing for those communities that we serve and love, the investors will be delighted because we will be attractive and we will be winning new business."

There was even more marketing spin. Kelly came out on day 1 breathlessly telling us all that ERP is a dead term and that, in Sage's eyes, it stands for "expense, regret and pain." I discussed this marketing pitch while eating beignets and drinking coffee at New Orleans landmark Cafe du Monde with a longtime Sage customer. When I asked him about his thoughts re the "ERP is dead" branding, he almost choked on his sugar-coated beignet:

"This year's Sage product is essentially the same as last years. And the year before that. Sage might try and spin this 'ERP-free' thing as something new, but simply developing a marketing message to sell the same old product doesn't mean anything. We've been asking for specific changes to our Sage product for 20 years and getting pushed back. Whether Sage is ERP or is not-ERP, it doesn't change the expense, regret and pain that we feel."

Harsh words indeed...

Sage's approach toward supporting both cloud and on-premises software reminds me of a strategy followed by one of Sage's major competitors, MYOB. Around five years ago, MYOB spent countless millions of dollars building a solution that was both a desktop application and a cloud one and using a common database. That experiment was ultimately a failure and put the company back several years. While it is true that Sage has a massive customer base that has a tendency towards being conservative, there is nothing to indicate Sage's strategy will be any more successful...

Of course, some would say that Sage is indeed offering the best of both worlds. This is certainly Kelly's view. "One of the biggest catalysts of change is technology disruption," he said. "What this means for you, what this means for us, is that we're absolutely happy for you to run your business from your own offices, with your own data in your offices. We're equally happy for you to run your own businesses from your office, but unleash the power of mobility for viewing information on the go. And we're really, really happy to see you run your business completely in the cloud."

The problem is in Sage's vision of what constitutes "cloud." Cloud is so much more than simply viewing information and transacting the odd invoice. Cloud is about complete functionality irrespective of the device, location or form factor in use. Cloud is about a broad ecosystem of partners that can integrate quickly and easily using the latest in technologies. Cloud is about real-time analytics, dashboards, bank feeds and all the other things that more savvy customers take for granted.

But enough moaning. This article was meant to be a roundup of Sage's news from the event. So here goes:

Sage X3 in the cloud is an update of Sage's X3 ERP product. I talked with one customer of Sage X3 to get his perspective on the announcement. He chuckled saying that this is the same product that was announced last year, and will likely be announced next year. In his eyes, Sage is good at announcing grandiose product launches, but poor at delivering upon them.

In fairness, X3 does seem somewhat new. It is available for deployment either on-premises on a customer’s own infrastructure, as a service hosted on Amazon Web Services but managed by Sage, or as a service hosted on the cloud of a Sage partner. X3 is written in HTML5, bucking the native mobile app trend.

Sage Live, the aforementioned product built on Salesforce's platform, is the real deal. After Sage's absolute debacle with its previous incarnation of Sage Live, this looks to be a robust and "true cloud" offering, that can go up against the other pure cloud products. It also has the distinct advantage of being built on Salesforce and hence able to leverage the massive ecosystem of third party products that exist within the Salesforce world.

Sage Live is generally available in the US and will be available in the UK and Ireland by the end of the summer. Interestingly (but not surprisingly) Sage is offering a "rescue package" for QuickBooks customers who want to migrate to Sage Live at no cost. Sage Live is available on a subscription basis starting at $15 per month per business user and $30 per month per full user for the Sage Live Essential package. 

The interesting point here is the disconnect between the sort of organization that is likely to use Sage Live, and Salesforce's larger typical customer. I asked both Sage and Salesforce about the commercial arrangements between the two and, unsurprisingly, both organizations declined to comment. That leads me to believe that Salesforce is offering Sage a sweet deal, but it also leads me to suspect that Salesforce could well terminate the relationship if it doesn't meet its expectations - possibly a risky situation for customers?

Not wanting to leave their other products out of the rebranding spin, Sage also announced the "modernization" of Sage 100 and 300, which are going live in October as 100c and 300c with the “c” signifying “connected, collaborative, customer-focused.” What that really means in customer terms is anyone's guess. The fact is that Sage still has hundred of individual products that live on different code bases and only have a name in common — this is the core problem that Kelly needs to put his mind to.

The Sage Summit was an eye-opener. It really felt like going back in time. But, I'll have to admit, there were a lot of customers there who seemed to lap up the Sage message, seeing what Sage is delivering as revolutionary. Maybe I've been drinking the Kool-Aid for too long and the reality is that Sage is moving at an appropriate speed, but I fear that, while their customers are happy with the speed today, Sage will be left out in the cold as the rate of change and propensity to adopt new technologies increases dramatically going forwards.

Copyright © 2015 IDG Communications, Inc.

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