Sage unveils web-based accounting and information services

After a wait of nearly two years, Sage has established a web-hosted Line 50 accounting service. John Stokdyk reports.

The company has been working long and hard to devise an online formula that will not damage its successful shrink-wrapped software business.

Continued...

» Register now

The full article is available to registered AccountingWEB members only. To read the rest of this article you’ll need to login or register.

Registration is FREE and allows you to view all content, ask questions, comment and much more.

Comments
nigel's picture

Will Sage make online accounting mainstream?

nigel | | Permalink

When I published a feature on the current state of online accounts packages last year I received a lot of stick for suggesting that it needed Sage or Microsoft to launch a SaaS product before people took it seriously.

With the exception of Twinfield, which seems to have a big user base outside the UK, none of the other SaaS providers seem to have made much of an impact on the UK accounting market. That's probably because accoutants generally are IT laggards (see articles elsewhere on AW!). But maybe - just maybe - the entry of Sage in the online market will be the boost we need to push this technology into the mainstream. Then the older service providers can push their services against Sage and we'll see who really delivers the service our clients want.

Just a thought: would products like TAS, QuickBooks and MYOB have gained their market share as quickly if they hadn't had Sage there to create the market in the first place?

Unfortunately, it's not clear yet whether this is a serious strategy by Sage or just a toe dipping exercise.

Conspiracy theorists please note: I am not paid to promote Sage, I don't especially like (or dislike) them, I don't think their produucts are the best, etc etc. But I do think they have a big enough marketing budget to create an awareness of SaaS accounting that no-one else can afford to do.

dahowlett's picture

definitions etc

dahowlett | | Permalink

I don't agree with the Gartner definition and having read what they've said about this area, they're pretty clueless.

Very important to realise this is NOT multi-tenancy SaaS as most of us understand it and the user is licensing PER company. So it's really a per USER story PER company.

Pricing is cock eyed.

I've got an assessment you can find here, along with answers from CEO Paul Stobart to various questions about the service.

Rob - the technical infrastructure IS important because it serves as the basis upon which to deliver a service. Therer are things you simply cannot do in ASP style environments that you can do in multi-tenancy systems. Obfuscating that by insulting others doesn't help.

Maybe good news for real SaaS suppliers .......

Anonymous | | Permalink

The wish to avoid a debate about the pros and cons of different application architectures is understandable but nevertheless it is fundamental to the design and efficiency of today’s SaaS systems. Unfortunately, opening this bag of worms would show the Sage deficiencies in their true colours and avoid clouding the issue

Of course one interesting aspect of the whole scenario is the comment:

'... when Sage enters the online market, they will enlarge it by more than the share they take. A company of their size gives it a stamp of approval ...'

Ultimately does it really matter that Sage have enabled their legacy application via Citrix - everyone knows its is not SaaS and still contains all the flaws of the original application (v.13 2007) whilst having none of the benefits of re-engineered ground-up design? Essentially a quick fix to the market with the least cost to the software house

Surely the crux of that issue is that their very entry into the market will increase awareness and encourage greater take up - overcoming inertia, scepticism & conservatism

Once customers have decided to go down the hosted route they may well assess what is available to decide upon the best product; this could be where Sage comes unstuck with their current offering.

When the Sage product is compared to others in the market - on quality, technology and pricing Sage would be well down any customer’s wish list. Maybe they have 'shot themselves in the foot' with this offering

david_terrar's picture

More of a techno-democrat really - it takes all sorts

david_terrar | | Permalink

Alan,
Excellent comments, very eloquently put. I agree with all you say. I'm sure the Sage initiative will increase the chances of the average practice taking the online option more seriously. Good luck - hopefully the size of the market will increase so we bump in to each other less often.

Rob,
I haven't been called a techno-fascist before - I think that's a little unjustified. However, I agree with you completely that a debate on the technology under the covers would be un-productive for the general AW readership. Some buyers may get in to that when they're making comparisons, but that's up to them. It's up to the service provider to worry about architecture and scalability and the like, but the end user (putting functionality to one side) is really only interested in the fact that it works in his browser without doing anything unnatural in terms of set-up, and at a response time that's fast on his connection speed. I really only wanted to highlight that there were more options in online software deployment than Citrix or a nice web interface put in front of traditional software. I'll ask you about 1 to many off-line, because I'm intrigued by what you say. Your ASP approach is different to Liberty's or Winweb's or ours, but good luck with it too.

David Terrar
Mailto:dt@d2c.org.uk
web: http://www.d2c.org.uk and http://www.twinfield.com
blog: http://biztwozero.com

david_terrar's picture

SoSaaS, on-demand, hosted and SaaS

david_terrar | | Permalink

Thanks for the mention John. First I want to clarify that SoSaaS - Same Old Software, as a Service - was a term coined by my friend Phil Wainewright.

Secondly, I'm glad to see Rob Lamden confirming the Online50 approach is the same style as Sage's new offering, using Citrix to web enable existing (same old) Windows software. Rob says "rather than writing a front end", which would be another option, but still not SaaS. A good example of that style would be RightNow, the US CRM provider. They deploy multiple instances of their own software in their own boxes and run it for customers with a very nice web interface. This provides a good solution, on a monthly subscription basis, deployed across the web, but it's still not SaaS.

Gartner have a good definition of SaaS that has three requirements:

1. The application is owned, delivered, and managed remotely by one or more providers
2. The application is based on single set of common code and data definitions which are consumed in a one-to-many model by all contracted customers at any time.
3. The application is licensed on pay-per-use or subscription basis

The true SaaS vendors conform to this approach, and the better ones have architected their web service from the ground up for the Internet.
David Terrar
Mailto:dt@d2c.org.uk
web: http://www.d2c.org.uk and http://www.twinfield.com
blog: http://biztwozero.com

listerramjet's picture

perhaps

listerramjet | | Permalink

their business model does not have to adjust - Sage is a strong brand. If real Saas is so good and much cheaper then presumably Sage will see falling revenues - but not apparently born out in practice yet - sage-profits-boosted. Of course that is something of a simplification. It would also be good to see how their accountants club channel reacts. Its going to be a difficult time in the SME market with the proposed IASB standard replacing the FRSSE. I suspect how well Sage reacts to this will be at least as important.

dahowlett's picture

Thanks but

dahowlett | | Permalink

Thanks for referencing me John but I don't think I've contributed anything to this piece.

Great News

axw001 | | Permalink

This is great news on a number of points:

1) That it has taken Sage this long to get to a point where they could make their Line50 product available as a hosted application, having announced their intention some time ago, is an indication of their experience and competence as an application hosting provider. Their past treatment of Online50 also says something about their corporate ethics although Rob Lambden is too much of a gentleman to draw this to anyone's attention.

2) I think it was a recent ACCA survey that pointed out that many accountants were "technology laggards". Now that Sage is talking about online accounting more of the profession will begin to consider the possibilities of using the online model to provide better customer service to their clients.

3) The pricing is still set very high, reflecting the inherent high cost of providing an online service that hosts an ordinary PC application. just look at how much memory is consumed on your PC when you run Sage line 50 and think about scaling that for thousands of users. Because Liberty Accounts online accounting software is designed for the internet we can offer equivalent access, including an integrated payroll for less than one fifth of the price. The economics go hand in hand with the technology and that is the point at which technology does become relevant to users.

4) Sage are still a long way from delivering a purpose built online service that can scale economically and would allow them to pass on the savings to end users if they chose to. Sage's overriding need is to leave their cash-cow desktop business unthreatened so this is not likely any time soon.

Sage 50 Accounts Professional Online 2007 service is to the provision of online accounting what the horse and cart is to the UK transport infrastructure - it will serve a purpose for a while, but the invisible guiding hand of market fundamentals will ultimately put it out to graze.

Alan Wright
MD

alan.wright@libertyaccounts.com
Liberty Accounts