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Sage to base growth on subscription strategy

Charlotte Jee | May 26, 2014
Business software firm Sage is hoping that providing its services as subscriptions rather than licences will help to secure the company's future success.

Business software firm Sage is hoping that providing its services as subscriptions rather than licences will help to secure the company's future success.

At the Sage ERP X3 Global Convention 2014, European CEO Alvaro Ramirez explained that the company's growth strategy is based on a subscription rather than a licensing model.

He said: "We have had plenty of debates with partners about this. To be very honest with you, licence is a static model. Subscription is a dynamic model. Subscription is fairer for the customers and for us."

He continued: "No play, no pay. It's difficult but fair. And it means that we focus always on the experience for the customer."

Hybrid solution

However, the company sent out mixed messages over whether or not the latest version of its ERP (dubbed 'ERPx3') will be cloud-based or not. Christophe Letellier, CEO for Sage ERP X3, suggested that the software, which will be available from next month, is not yet available via cloud.

He said: "Our strategy is very, very clear. We are going towards subscription, both in the cloud and on premise. For version 7 we have pricing for both for our customers. When we go with the cloud we'll have other pricing options too.

"We want choice. Some customers prefer to buy the licence. Others prefer to go with subscription, either because they don't have the cash to buy a licence or because they want to be free to adapt.

"The idea is no pay no play. If you don't use the system there's no reason why you should pay. It's a principle more and more of our customers expect these days: flexibility. Some of our customers will want to go on premise, others will want to be with the cloud. Flexibility and choice are key."

ComputerworldUK understands that the cloud version of the new ERP software is still in testing, but private cloud solutions will eventually be offered to Sage's customers by local partners within specific countries.

A Sage spokesperson said: "Regarding Sage ERP X3, it can be an on-premise or private cloud solution. The solution integrates with cloud and industry specific applications, such as cloud databases."

'Our brand is a disaster'

The company also plans to invest to strengthen its brand, according to Ramirez. He described Sage's brand as a "disaster" at the convention last week, acknowledging that the company needs to improve in this area.

ComputerworldUK understands that Sage is considering rebranding certain services and products, rather than the company name itself.

The business software company is the third largest in the worldwide ERP market with a six percent share, according to Gartner research published earlier this month. SAP is the market leader with 24 percent, followed by Oracle which took 12 percent of overall global sales in 2013.

 

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