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Sage CEO Steve Hare onstage at the Transform 2022 event in Orlando
Sage

Sage bolsters cloud credentials at Transform event

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A raft of announcements at its annual Transform conference saw Sage shore up its Intacct product with further investment, expand its partnership with Microsoft and announce the acquisition of a carbon accounting tool.

12th Oct 2022
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Speaking at the Transform 2022 conference in Orlando, Florida, Sage CEO Steve Hare stated it was his ambition to grow the company organically “at a rate we’ve never seen before”, citing cloud native packages such as Sage Accounting and Sage Intacct as drivers of that growth.

Hare referred to what he sees as an addressable market of more than £30bn worldwide, with the move towards cloud subscription products, particularly among small and medium-sized enterprises (SMEs), a major factor. 

“We’ve spent $1.1bn on research and development over the past five years and more than $1bn in acquisitions”, added Hare “We’ve shown our commitment to product innovation, to maintaining our competitive edge.”

In answer to an AccountingWEB question about whether Sage sees itself as providing cloud products, Hare said: “We’ve always been transparent about our ambitions. Yes, we are a cloud company.”

Moving customers to a subscription model has long been a stated aim of the group, and according to its latest annual report, Sage’s subscription revenues grew 11% to £1.24bn, with 70% of group revenue now coming from subscriptions, up from 65% last year and 56% the previous year (although it’s worth noting that not all Sage’s subscription products are officially ‘cloud’ offerings).

The group recently came in for criticism for switching off access to a number of versions of its older desktop products purchased under a perpetual licence model – a move that Sage claims will keep customers safe following a security update rather than as a result of strategy change.

Intacct expansion

On day one of its Transform conference, Sage announced increased investment in its cloud-native mid-market product Sage Intacct. Bought in 2017 for £650m, Intacct has played a major part in Sage’s subscription ambitions, adding 22% recurring revenue growth to the wider business and delivering more than 2,000 new customers in North America alone last year. 

Intacct will also benefit from a series of product enhancements and market expansions, including opening up its manufacturing solution to North America, offering packages for the construction and real estate sectors (currently only available in North America), and automating inventory transactions with barcoding and mobile capture. Sage Intacct will also launch in France later this year.

Sage goes green

One carbon-neutral rabbit pulled out of the hat at the event was the announcement that Sage had acquired carbon accounting solution Spherics, in a move intended to help small businesses cut carbon emissions.

According to its site, Bristol-based Spherics automates the process of calculating emissions by “ingesting data from a customer’s accounting software and matching transactions to emission factors to create an initial estimate of their carbon footprint”.

The software is designed to then assist small businesses by applying carbon emission factors to procurement categories (such as travel, accommodation and electricity) and estimating the associated carbon footprint of a transaction.

At the Transform event, Hare pointed to research done by the vendor to justify the move. 

“Small businesses want to do the right thing about carbon emissions but fewer than 10–15% are recording it,” said Hare. “We’re looking for ways to make it easier to capture that information, and the easiest way is to do it through the tech they’re already using.”

While standards for carbon emissions reporting do not currently exist – and are unlikely to apply to smaller businesses when they do arrive – Hare points to the fact that SMEs were likely to have to confront the issue as part of supply chain reporting processes when dealing with larger entities. Hare added that Sage is also working with various governments to advocate for standardisation when it comes to carbon reporting. 

Microsoft integrations

Another move announced at Sage Transform was a deepening of the developer’s partnership with Microsoft. Customers of Sage Intacct or HR product Sage People can submit and approve accounting and people processes directly through Teams rather than in the respective applications, reducing the need to flick between the solutions.

Examples of the process in action include using the Sage Intacct app for Microsoft Teams to submit and approve expense claims or invoices or using the Sage HR app to apply for or review leave applications.

Sage has also committed to hosting Sage Intacct and continental Europe solution Sage Active on Microsoft Azure, the cloud computing service operated by Microsoft for application management from 2023. Microsoft customers will be able to access Sage solutions directly from the Azure cloud.

Hare brushed aside concerns about overlap between Sage products and those offered by Microsoft such as Dynamics 365. He told a press conference that Sage’s intention is to be a “multi-cloud product”, enabling customers to access functionality in the place they want to have, whether that’s in the product or over Teams, Slack etc. “We want to remove friction and create more value for our customers,” said Hare.

Replies (2)

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By Philysis
13th Oct 2022 21:32

All about acquisition on tech, nowt about partnerships with customers and end users aka the accountancy service providers, rip sage your strategy is wrong

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By TB93
14th Oct 2022 10:19

It's a shame their cloud based software is awful to use.

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