The Sage Brand – Will it become a household name in NA?

Sage North America is taking its brand very seriously these days. In Europe, Sage is a household name, but when Pascal Houillon arrived in the United States from Paris, he found himself in a very different situation. Mr Houillon recently took over as President and CEO of Sage North America when Sue Swenson retired. Sage Software is a $2.24 billion global company. Sage North America boasted revenues in 2010 of $857.8 million, supporting more than 3.2 million customers in the U.S. and Canada with ERP and CRM and other business applications that support accounting, payment processing, human resources, and the specialized needs of the healthcare, nonprofit, manufacturing, and construction and real estate industries, among others.  Other numbers behind the scenes are equally impressive:

  • Revenues for the first half of 2011 were $1.18 billion globally and $430.7 million in North America
  • More than 40,000 customer calls are managed daily
  • More than 27,000 Value Added Reseller (VAR) business partners worldwide; 5,000 VARs in North America
  • 20,000 members of Sage Accountants’ Network in North America
  • 13,600 employees worldwide; 4,000 employees in North America
  • Over 4,000 attendees at its Sage Summit 2011 customer and partner conference (underway in Washington D.C.  as we speak)

In spite of this, and partly because many of these customers are very small businesses, Sage continues to fly under the radar of many. Based on the premise that a weak brand limits growth for both Sage North America and its partners, Mr Houillon and his management team are on a mission to change that.

In addition to serving a very small end of the market with products such as Simply Accounting and ACT! this lack of awareness  stems in part from Sage having grown largely through acquisition and having preserved many of the brands along the way: ACCPAC, MAS, Adonix and X3, SalesLogix, Simply Accounting, Peachtree, ACT!, ABAS, etc., etc.  Some of these have (and still do) have better name recognition than the Sage brand.  While keeping those brands alive was likely a smart decision at the time, now in order to strengthen the Sage name, the Sage management team has decided to eliminate them. Yes, all of them. While currently products are grouped and managed internally by software category (e.g. ERP and CRM), each with multiple brands and product lines, the thought moving forward is to simply group them by target of company size.

While nothing is yet cast in stone, there will likely be a Sage 50 targeting the very smallest companies, Sage 100 coming up market, Sage 200 even further up… You get the idea. Under Sage 50, there might be accounting solutions, as well as contact management and other categories of solutions. Similarly, there will be products in the Sage 100 line that will satisfy different market needs (ERP, CRM, Human Resources, etc.)  While the concept is simple enough, execution will be far from simple, since there are multiple products in the same category targeting similar size companies. Most specifically on the ERP side of the house, company size is not the only qualifier that determines which solution is offered.

For example, Sage Accpac targets small to lower midmarket multinational businesses in several specific but quite diverse verticals: Finance, Service, Mining and Hospitality. Without the underlying base of MRP it is not really a fit for manufacturers, but Sage has other products that target manufacturing (Sage X3 and Sage MAS). Sage also distinguishes between “global” and “multi-national”. While Sage Accpac can deal with multi-currency and multi-language environments, it is assumed each legal entity in each country will run its own instance of the software, rather than running a global centralized, single instance. X3 is a better fit for the latter. Therefore, because the decision is not always based on company size, there will be some overlap and perhaps some hard decisions as to where to “put” some of the products or how many different Sage NNN product lines are created.

And once these product lines have been created, what will Sage call the different sets of code that fall under each umbrella product? Will they be products, options, flavors, categories? Or will another name (i.e. brand) creep back in? To some these might seem like small, inconsequential issues. But when branding is the goal, they are far from insignificant. For customers that bought Accpac or ACT! 15 years ago, it will be quite hard to get those customers to call those products anything but what they have always called them. One might ask if that really matters. After all, they already bought the product. But the answer is a resounding, “Yes!” Brand equity also translates to brand loyalty and brand awareness. And if the existing customers are loyal to the product, with no loyalty to the company that now owns it, the brand is diminished.

But the existing customers will make the transition if they perceive that they are actually getting something “different”, and “different” usually means “more.” So far there has been no talk from Sage North America that any of these products are going away, no talk of rationalization or consolidation. So if the products continue, just with a new name, Sage will need to find a different way of adding enough value to justify the shift in thinking to a new brand.

Some of Sage’s “Connected Services” may be just the ticket for this.   Connected Services are online, web- or mobile-based services, integrated with a Sage product and designed to solve specific business issues for Sage customers. In some instances, they are provided at no charge, in others, they can be purchased on a subscription basis or included with a Sage Business Care Plan. Sage groups these into various categories as follows:

  • Employer Services: learning management service, performance management service, recruiting service
  • Financial Services: payments service, credit checking service, billing service
  • Operations Services: payroll service, direct deposit service, tax service, compliance service
  • Sales and Marketing Services: E-marketing service, business information, business intelligence services
  • Vertical Services: Healthcare patient and physician services, construction project management services, fundraising and grant management services

There is a distinct advantage to offering these as separate services. By creating these as add-on, external components, Sage can develop them once and make them available to all product lines, rather than having to develop employer or financial (or other) services for each of its separate products. Combining the original product offering with a host of services such as these, Sage  may just be able to get its existing customers to make the paradigm shift from being Accpac, Adonix, ACT!, SalesLogix (etc., etc.) customers to being Sage customers.  And then they will be well on their way to being a real “name” in North America.

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Is there a “social revolution” happening?

Cloudforce 2011 Boston attracted record crowds yesterday. The ballroom was packed, as well as a large overflow room. At first glance you might have thought the Stanley Cup champion Bruins were going on stage instead of CEO Marc Benioff. Mr Benioff and company were in town to usher in what they call a “post-PC social revolution” and to inspire both people and companies to become entirely social, mobile and open.

I don’t generally present myself as a “CRM analyst” so you might wonder what I was doing there. I do consider myself an “enterprise application” analyst, with an emphasis on business (don’t think of me as a “techie.”) At the center of enterprise applications lies Enterprise Resource Planning (ERP), but the boundaries of ERP have been blurring for the last few years and you have probably heard me say it is getting more and more difficult to determine where ERP ends and other applications begin. So I spend almost as much time on the periphery as I do deep inside ERP. Certainly the products and services has to offer directly impact the performance of the business and hence are on my radar in terms of making enterprise applications pay dividends.

However, getting back to the theme of the day… I am not quite the cloud purist that Mr Benioff appears to be, but I do value the benefits cloud has to offer. In terms of this social revolution, being rather old school and somewhat of an introvert, I still need to be convinced that all businesses will be social businesses and social media is the answer to all the ills of the business world. But I do look around and acknowledge that we are indeed in the midst of a form of revolution in terms of communication and expectations.  Much of the basis of communication in social media is sound bites. So in the spirit of “social”, I’ll recap yesterday’s keynote by sharing a few quotes from the stage. In doing so, of course I risk presenting something out of context, but rest assured, I just present them here as food for thought. Munch away….

On cloud computing…

“We were born cloud. We are being reborn social.”

“We need a cloud computing test… if it’s about hardware, it’s not about the cloud.”

“These are the ghosts, the forbidden elements. If you don’t have automatic upgrades, the elasticity, the scale, the energy efficiency; if it is still only for the elite; if it’s not democratic, it’s not cloud.”

 “We will have transitionary technology. Private clouds are the screen scrapers of this generation.”

“Beware of the false cloud.”

“We are making this movement to public cloud; nothing can stop this.”

“For those who didn’t get into the cloud, I’m sorry; we’re moving on.”

On Social…

“We have reached an inflection point. The number of social users now exceeds the number of email users.”

“Facebook is rapidly becoming the Internet – it is where people are going for information. Twenty-two percent (22%) of Internet time is now social.”

“The social revolution is creating a social divide. Is your company social?”

“It’s not enough to know your customers. Delighting customers is knowing who they are and what they ‘like’.”

“Make employees, partners and customers your “friend.”

“Lotus Notes was conceived before Mark Zuckerberg was.” [I’m still trying to figure out the context of this, but couldn’t resist]

“Marketing is no longer about eyeballs and ears. It’s about hearts and minds.” Marcel LeBrun, Radian6

“You can’t just move into the future. We need to bring the past into the future.”

“A ’brand’ is no longer a series of memories, but a series of engagement.”

OK, apart from these few sound bites, was there anything else that convinced me that the social revolution is really about business? Yes, a few. For example, I learned about the value of a private social network based on Chatter and Sales Cloud. I saw the value of following not just people, but deals (think sales process) or accounts (think servicing customers). I saw Pepsico monitoring its Gatorade brand through a Network Operations Center and Dell doing the same from its social media command center.  I was very impressed to learn about KLM’s Surprise program. The airline watches for people who announce (through Facebook or Twitter) they will be traveling on a KLM flight, find out a little about them from their social media communications and then surprises them with a small gift at the gate. The result…

“It is so much more rewarding to put a real smile on someone’s face than to see a smiley face emoticon.”

Which is exactly why I think “social” media isn’t necessarily all that social. I guess it is good that it helps those with no social skills connect. And it’s great if it can be used as a tool to develop the kind of personal and business relationships that are based on trust. But there is a risk in becoming so absorbed with social media that it becomes the only way of “engaging” and good (and real) relationships are the heart and soul of good business. I’ll take a hand shake and a real conversation any day over the impersonal tweet and post. But then, what will be the first thing I do after posting this to my blog? I’ll tweet it.

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Microsoft Dynamics CRM 2011 Arrives On-Premise Early

Yesterday Microsoft announced the availability of the on-premise version of Microsoft Dynamics CRM 2011. A month ago, on January 17th the cloud-based online version made its debut. It was the first time Microsoft ever announced an on-demand version before making the on-premise version available. Now, as they release the on-premise version we spot another rarity in the software world… bringing a product to market early. Back in January Microsoft had said they would release the on-premise version on February 28th, but  lo and behold, it is already here.
In a way it is not surprising. The online and on-premise versions are really the same. While in the initial launch event Kirill Tatarinov (head of the Dynamics business) noted the symmetry between the two versions and touted this as something nobody had ever done before, I would respectfully disagree. In the past year we have seen several major enterprise applications vendors do the same, pointing to the value of giving customers choice and allowing them to move, uninhibited between the cloud and on-premise and back again. I suppose if you narrow the conditions down enough it might be unique, but instead I would point to it as a growing trend, particularly among those traditionally on-premise only software solution providers.
I am actually just now catching up on all this news. When I was recently with Aberdeen I was not the primary analyst covering CRM. But with a broad coverage area of Enterprise Applications, the center point being ERP, it was pretty hard to avoid. As ERP vendors continued to expand their solution footprints, the front office was one of the first targets. Very often I would see CRM modules being added to the core of ERP. Originally they were CRM Lite, but no more. These fully integrated or even embedded versions were becoming more feature-rich and fully functional. So it is not unusual for me to see CRM sold as a feature of ERP.
This made perfect sense to me because for almost 2 decades CRM vendors have been using the phrase, “a 360o view of the customer.” But I failed to see how they could pull that off without ERP, or minimally an accounting system. After all, it is not a CRM system that invoices the customer or manages the receivables and seldom does it manage inventory where field service is an integral part of servicing the customer.
But not only is Microsoft Dynamics selling the compatibility and integration with ERP, you could almost say they are selling it as a feature of Outlook. I see this as a rather ingenious way of getting CRM infiltrated into the organization. It is human nature to resist change (and new software indeed represents  change) and the sales organization is no exception. In addition, how often have you seen a sales rep resist using the sales force automation “leg” of CRM for fear of big brother looking over his or her shoulder? End users of enterprise applications are less likely to ask for an additional software applications (to implement and learn) than they are to ask for more functionality in the solutions they already have.   And what application does a sales rep, particularly an inside rep, practically live in? Microsoft Outlook.
Of course, adding this functionality to Outlook does represent some change. But I have just recently migrated from Office 2003/Outlook 2007 to the 2010 versions of both. Talk about change! Of course it presented a bit of difficulty in finding the features I was accustomed to, but even after several weeks, it is a constant series of discovery of new features and functions. Based on the demo I saw of Microsoft Dynamics CRM 2011, the experience appears to be similar. Where I now click on Mail, Calendar, Contacts or Tasks, I would have an additional choice to go directly to CRM. But for the most part I don’t often have to leave the comfort of Outlook. I get new buttons on my tool bars with what Microsoft calls an Office-like ribbon. I get new personalization features. For example I can have any opportunity over a certain dollar value or forecast percentage highlighted with red, bolded font. With one click I can turn those opportunities into a chart, or I can have predefined charts. Or I could just stick to the raw data if I weren’t such a “visual” person.
Those are changes I could easily get used to!
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