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Sage 50 Hosted price hike prompts backlash

24th Jul 2012
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Sage has come under fire from AccountingWEB members for increasing the price of its hosted application by 56%.

Sage 50 Accounts Hosted does what it says on the tin. In contrast to the much simpler Sage One, Sage 50 Accounts Hosted is based on the current version of the developer’s flagship desktop accounting application and is marketed through the Sage Accountants’ Club and the company’s usual business partners.

However a recent Any Answers post from Logika highlighted disquiet about a recent increase from £75 a month to £117 (plus VAT). Unfortunately for the AccountingWEB member, the rise was not shown immediately on Sage’s website and the firm had quoted the lower £75 pricing to a client. Sage agreed to honour the lower price months, but said it would go up to £117 (plus any further 2013 increases) in 12 months.

“Unsurprisingly our client has decided not to proceed,” commented Logika. “How can accountants confidently sign up clients to Sage Online if they know that they will be putting their clients at the mercy of Sage’s pricing policy.... 56% in one year can never be fair or reasonable even with a major upgrade.”

While Logika had nothing but praise for the software itself, another aspect of Sage’s pricing was an irritant: practitioners buy the software through the accountants’ club and are invoiced £1400, less the 20% club discount, £1,344. The client pays Sage £116 (+VAT) a month by direct debit, with the amounts credited to the accountant, leading to a 20% credit at the end of the year.

“Sounds good but the catch is that if the client cancels or stops paying the direct debit then you become liable to Sage for the remaining balance. Join Sage Accountants Club and end up personally guaranteeing your client's debts!” lamented Logika.

Mark Duncan, product manager for Sage 50 Accounts Hosted, came on to the site to answer Logika’s complaints.

The wrong web price has been fixed and Duncan explained that the increase was designed to set a similar cost of ownership for Sage 50 Hosted as for the Sage 50 Accounts Professional edition with full SageCover. The cost of ownership had been calculated over a three year period of use, and during the first year the hosted approach would work out cheaper, Duncan said later.

The price increase was the first since the service was introduced in late 2006 and reflected investment in the underlying hosting infrastructure and a shift to the latest version, Sage 50 Accounts Professional 2012.

Those customers wanting a less fully featured application still had the option of the £5 a month Sage One cloud system, he said.

Once the new infrastructure and pricing model has been in place for a few months, Duncan promised that Sage would take feedback from and customers and make any necessary adjustments. “Partners do feel strongly about bearing the liability if a client cancels. We will definitely be looking at it, but I can’t promise at the moment if we will do anything,” Duncan told AccountingWEB.

But Logika was not convinced by the consistency of Sage’s hosted and desktop pricing models. “The standalone is a one-off purchase, hosted is a monthly commitment so is much more expensive long term.”

If Sage was serious about the hosting market, Logika suggested an alternative strategy to encourage take up, based on:

  • £70 per month payable by client to Sage
  • Fixed pricing for 3 years
  • Monthly credit to accountants account of £14 per month.

Other AccountingWEB members were less charitable about Sage’s online strategy, contrasting the £117 monthly rate for Sage 50 Hosted to charges for pure cloud accounting applications such as Xero and KashFlow.

“Both are under £20 per month with no contract and the client pays directly so no risk of you picking up the debt,” commented Dreamcatcher.

Adrian Pearson added that the number of clients he was picking up for his Movemybooks Sage-to-Xero conversion service indicated the extent to which Sage was losing small business customers to newer rivals.

Watching from the sidelines was Online50, which has been offering hosted versions of Sage 50 since 2003. Although the third party hosting provider has had its own ups and downs with Sage, managing director Rob Lambden took a pragmatic view of the latest increase, which will not affect his clients.

“Sage own the software and can charge what it wants for it. People don’t have to buy it,” Lamden said.

The best way to keep prices down was to provide a good service and grow the customer base, and Lambden thought Sage’s latest increase would generate enough revenue to fund the underlying infrastructure and new developments at a realistic level.


Replies (23)

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Gary Turner
By garyturner
24th Jul 2012 18:48

Sage's 'Harvest' strategy in effect

According to the Sage analyst day last week, Sage's leadership acknowledges the need for them to 'sunset' a number of its 270 different packages and, separately, shift the majority of its remaining product families to subscription based pricing.

The problem any legacy software business faces when implementing this kind of strategy is the significant short to medium term impact this shift has on revenues, as people move to paying monthly for everything instead of upfront for licenses and annually for maintenance.

I think it's pretty obvious from what Sage executives said last week and from this kind of gouging behaviour that they have absolutely no intention of taking that revenue hit themselves. Instead they are cynically passing the cost of chronic bad product management to their customers in the hope that enough of them will just bear the cost for fear of change, or ignorance about the alternatives.

Indeed, according to Sage's strategy presentation last week, the products / customers in this particular category were labelled by Sage's leadership as being ripe for 'Harvest'.

Not that I'm complaining.

Gary Turner
Managing Director, Xero

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Adrian Pearson
By Adrian Pearson
24th Jul 2012 18:36

An important correction

Hi John,

We provide a service which automatically converts Sage data over to Xero - not the other way around!

Could you please correct your wording? ["Xero-to-Sage conversion"]

Thanks :)


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Replying to HowieTNC:
By ringi
25th Jul 2012 11:49

Xero-to-Sage conversion

Interesting a free Xero-to-Sage conversion service would make me more likely to go with Xero as it would reduce the risk.

Adrian Pearson wrote:

Hi John,

We provide a service which automatically converts Sage data over to Xero - not the other way around!

Could you please correct your wording? ["Xero-to-Sage conversion"]

Thanks :)


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By ireallyshouldknowthisbut
25th Jul 2012 09:29


@Gary it seems to me that everytime their user base drops, they divide the overheads over the smaller base.  From an executive pay point of view revenues hold.......for a bit, as software users are very 'sticky' its much worse changing accounting package than changing banks for example,and then hopefully the collapse in user numbers comes just after you have retired or moved on but on your patch it looks fine. Classic short termism.




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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
25th Jul 2012 09:41

Sorry Adrian!

Copy now fixed. I think the sun must have got to me yesterday afternoon.

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Torben Halvorses owner of PaperLess Document Management for Sage
By torbenhalvorsen
25th Jul 2012 13:00

Accountants using Sage 50 for their clients

There is also another option that Accountants could consider when using Sage 50 with their clients.

PaperLess offers the clients of Accounting practices the ability to use PaperLess via the Internet as follows:

Upload documents to PaperLess (most file formats including scanned paperwork)Prepare the accounting transaction (or the Accountant can offer to do this) - automatic invoice recognition can also be used to reduce manual data entry when PaperLess reads the document image and automatically prepares the transaction.Post the transaction into the Accountants Sage 50 Accounts (or the Accountant can offer to do this)Search and view the transactions from Sage 50  with the document imagesUse Document Flow to manage an approval process prior to processing a transactionArchive all other non-accounting documentation is a separate document archive

The recurring costs are closer to the "pure cloud accounting applications" that are mentioned which are much lower than the prices quoted for Sage 50 Accounts Hosted.

PaperLess also integrates with other accounting applications but this additional option may be useful to Accountants who want to ensure that there clients are able to keep accurate records and share them easily with their advisors.

Phil Richards

-- Accounting the PaperLess way™

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Replying to steveo:
By jonbryce
02nd Aug 2012 11:37

re: Paperless

The problem with that is that scanning documents is more time consuming than just typing the details in somewhere.

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By Hosted Accountants Ltd
02nd Aug 2012 10:42

3rd party hosting

An interesting strategy...

We regularly host SAGE applications alongside other packages for all sizes of firm across the UK. These products run fine on our cloud platform for those that "must" use SAGE for whatever reason.

Why pay extra to a software vendor when you can use a 3rd party IT company to look after all of your applications and IT infrastructure?

Caveat - yes we are a hosting supplier, obviously, but the key here is that firms should be able to run applications "in the cloud" without being stung by the suppliers.


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By SecretariuS
02nd Aug 2012 11:04

Sage hosted!

Why not log in to the client's sage accounts over the internet? That's what I do and can then check and make amendments to the accounts in real time without it holding up the bookkeeper on site.  The client owns the software so there are no additional costs to me and no hassle with client manager or the cloud, and no need to travel to the client site. I can also print out the Sage reports directly to a printer in my office.



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By BryanS1958
02nd Aug 2012 11:16

Why use Sage?

I can't see any logical reason why anyone would want to pay £117 a month for Sage when they could learn Kashflow (or any other decent cloud accounting software) in a few hours and be making significant savings for better products.

Sage is like London underground - trying to squeeze new technology into an antiquated system The cloud from scratch offerings such as Kashflow don't have to worry about legacy restrictions,they can just design something specifically for the internet, without worrying about the habits and needs of existing users.

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By MissAccounting
02nd Aug 2012 11:21

I have to agree with Bryan - why use Sage at all?!  I would rather recommend a pen and paper to my clients instead of Sage! 

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By economia4F
02nd Aug 2012 11:38

Sage to Kashflow

A relatively new business using Sage Instant has asked us to set up a trial with Kashflow and I as in the process of importing the Sage data so that the client can compare the two systems using his own data. 

Do the strategists at Sage not realise that the world is moving on with businesses needing easy-in and easy-out arrangements for accounting and other supplies purchased.


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By BryanS1958
02nd Aug 2012 11:46

re: Paperless

I'd love to go paperless, but scanning and indexing is a hassle, especially with lots of little receipts and things held together with staples and paper clips, where you can't just stick them through a sheet feeder.  

Paper is just easier to handle, really you need two screens to go paperless.  It's getting there, but paper still easier/quicker to handle (until you lose it!), so I'll stick with paper for the moment. 

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Replying to Ruddles:
Torben Halvorses owner of PaperLess Document Management for Sage
By torbenhalvorsen
09th Aug 2012 08:23


Hi Bryan

Yes many would like to be PaperLess. For bookkeepers and accountants there are many opportunities to Save time, Increase profit, and Reduce risk.

Scanning is no real hassle when you compare the time saved by capturing the document and data first, before processing. This using Capture to Process as a document management model which is far more efficient than how many people may envisage document management which is described as Scan to Archive, i.e. dealing with the paper and then archiving it electronically.

We show people how to deal with paper clips & staples really easily; and as PaperLess controls your scanners user interface you can quickly capture the documents you need too.

Two screens? Another myth. All you need is an application that is designed to work with your accounting solution with one monitor.

Lose paper? Eliminate that problem, and duplicate postings, and time lost when clients want a copy of their paperwork.... You can see how  on video when you join the PaperLess community.



-- Accounting the PaperLess way™

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By trecar
02nd Aug 2012 12:19

Sage other products

I used Sage instant accounting some years ago and reverted to a previous product I had been using as I found it better. The company producing the product has now been taken over by Sage. Since Sage took over I have noticed massive increases in prices for a product that has supposedly improved but has in fact failed to adapt in some areas or has introduced new add ons for an inflated fee. In fact I have noticed some previous useful features have been quietly dropped or made difficult to access resulting in a less adaptable model. Changes to the software are supposed to be covered by the maintenance fee, which has increased vastly, but legislative changes only result in upgrades that drive up prices.

In all honesty I cannot find any software on the market for smaller entities that does the job I want it to do at a reasonable price. I still remember the advice I was given when I first entered accountancy many moons ago, "Book-keeping should reflect the business, not the other way round." Try telling that to software manufacturers who insist on giving us rigid packages that can only be adapted by expensive alterations. It all comes back to poor design from dodgy systems analysis in the first place.

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02nd Aug 2012 13:02

I wouldn't buy Sage 50 now...

I've used Sage 50 for years, starting with DOS versions, and I have used it hosted by Online50 too, but I have now moved one of my businesses to Xero and will move another to KashFlow, which I used extensivley with SME clients when in practice. Both Xero and Kashflow are now superior to Sage in many ways, in my experience. I am staying with Sage 50 for my stock-based bsuiness, although Sage 50's stock control has its weaknesses.

Xero is my choice for a business with multi-currency bank accounts, multiple user logins and operating several bank accounts (the automatic bank feeds save me a great deal of time). Kashflow is my choice otherwise.

I'm also abandoning Sage Act! and Sage Coretime (the time-costing part of Sage 200, also sold standalone) for a cloiud-based solutions.

All I need now is a cloud payroll system that works as well as Sage Payroll, which I'm sticking with for the time-being.

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Replying to lionofludesch:
By madhumorjaria
02nd Aug 2012 13:15

Cloud based Payroll software...

RSVERGE wrote:

All I need now is a cloud payroll system that works as well as Sage Payroll, which I'm sticking with for the time-being.


Try this...I have not used it, but could well be the solution you are looking for


Let us know if its any good

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By gyalexander
02nd Aug 2012 17:28


Accountants should be very wary of dealing with Sage on the basis of this type of contract. On past performance, when new business starts to dry up practices may find that the terms of renewal commission will change, and not to their advantage. Read the small print very carefully.

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By John Snowden
04th Aug 2012 10:50

Sage vs other cloud based systems

I have never, ever, been a fan of Sage. I always thought any Sage product was based on an old and inadequate core system and massively overpriced. I used TAS for 20 years, nearly, but have dropped it this year as it has (having been owned by Sage for some years now) become too Sage-ified and MUCH too expensive.

I have a client who uses Kashflow. The ability to go on line and read/correct/download etc is really handy. The pricing seems reasonable. However, I think it is slow and clumsy to use, partly, perhaps, due to the electrons having to negotiate the internet. My real gripe with Kashflow is that there is no decent nominal ledger download in one place, and in a number of ways it is very cumbersome to navigate (e.g. cannot easily open several windows or reports at once, date entry is inflexible and very repetitive, structures of csv reports downloaded are inconsistent, etc etc). Getting hold of the right data, recently, with which to prepare a set of accounts has proved incredibly time-consuming. Maybe it will be easier next time round? To give them credit, I believe they are taking on board  and addressing such criticisms, so perhaps these things will improve.

For myself, I have moved from TAS to VT. The experience has been delightful. Cheaper and MUCH better value than either Kashflow or Xero, very much quicker to use than Kashflow, or TAS for that matter.

The other system I think is a little-known gem is Money Manager (and its sister Payroll Manager) from Moneysoft.

As to Sage,,,, no further comment!

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By Neil Ballard
09th Aug 2012 01:10

Thanks Sage!
In the SaaS accounting world we like to say that Sage do much of the marketing for us!

This is a classic example:)

Anyone still doubt that they just don't get it??

Neil Ballard

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By YourOfficeAnyWhere
08th Feb 2013 09:24

Sage Hosting - Keep your own software.

At YourOfficeAnyWhere we are able to provide a hosted remote desktop service for a single user for just £17.80, this includes the windows licenses we declare to Microsoft on your behalf each month and a dedicated server. We build the server to order and this is just £125.00 as a one off fee. You confirm the version of Sage you are running and we get this installed for you. You backup and restore the data from your local PC to the platform and you are up and running. So you keep your copy of Sage and decide whether you require support or not and you can have multi user and multi company systems on our solution. The cost is the same per user and we can include other options as required such as Excel on the platform for Sage integration and Outlook so that Sage can send out emails via Outlook. With more than 1500 remote desktop users in the UK, Europe and worldwide and an enterprise platform and only a 3 month contract minimum with no yearly contracts this surely has to be a more cost effective option than the Sage offering. We also offer Sage 200 systems for enterprise customers.

Michael Carter

Director Cardium Outsourcing T/A YourOfficeAnyWhere.


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By frankie3
15th Jul 2013 14:07

any updates on sage price hikes? just got renewal notice for sage accounts production for 50 clients. last year £120 + vat. this year £299 +vat. next year £473 +vat. that some % increase? sage say I have been getting discounted price for last number of years, but I don't recall it being sold to me as a discounted product. did this happen to anyone? what have you guys done?

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By darrenwilliams
15th Jul 2013 17:03

Frankie, Sage have been using the discounted price quote to me, for about 6 years, about 3 years ago I got them to put in writing to me that that years increase was to align me to full rates and then they still used the excuse this year(they just do not seem to care about customer care etc). I have just left their Payroll software to another supplier, with the other software being reviewed(accounts & corporation tax I use)

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