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Sage is (again) at a Crossroads with Accountants

May 17th 2019
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The buzz at this year’s Sage Summit in Atlanta this week was unmistakably all about Intacct, the cloud-based midmarket accounting product it acquired in 2017 acquisition for $850M.

To be fair, it has been a great success and gave Sage a much needed boost to its credibility as a player in the cloud.  Revenues are up – especially those all-important recurring subscription numbers (up 48 percent) and they do see their accounting partners playing a major role in that.

But the attention here will likely be aimed at those somewhat larger firms serving mid-market clients. So does this mean Sage is intending to abandon the small firm sector?  Not according to EVP for Accountants and Partners Jennifer Warawa.  She is adamant that small firms will continue to be supported and are fundamental to their growth strategy. How exactly this will pan out is unclear.

Sage has long suffered from a lack of clear identity in the small firm space in North America, where Intuit has a long had a firm grip on the hearts and minds of small accounting and bookkeeping practices, and their respective client base. There’s also Xero, which have grown to be a partner to the more progressive advisory firm. 

To their credit, Sage has tried to be a partner to all, and that’s a tough play when you’re not the default for many firms.  Also, various product rebrands (the core products now fit under the ‘Sage Business Cloud’ banner) have left many firms unclear who Sage is really for.

Where we may expect some clarity is around Sage’s launch of the Boomer-powered Client Accounting Services program (SAN CAS to its friends). This offering provides advice and support for those firms who are looking to extend their services beyond core compliance, but not necessarily shift their entire business model towards advisory. 

In addition, Sage is suffering from the usual tension of vendors with legacy desktop customers: to cloud or not to cloud.  Research unveiled during the event’s keynote address pointed to a continued investment among SMBs in on-premises software – 62 percent in the case of accounting software.  The hybrid desktop with cloud data approach available with Sage50cloud is an interesting approach to this, but the complete move cloud will need to be addressed at some point.

With Blair Crump now installed as Sage Plc president (after Stephen Kelly left last year) this is yet another ‘reset’ moment for the company and it will be interesting to watch how Sage presents itself over the next year or so.

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