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Sage looks to cloud for silver lining

27th Dec 2012
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After a year of sluggish growth, Sage is hoping that sales from cloud computing will make up for weak markets in France and Spain and help accountancy software supplier to double its growth rate by 2015.

The FTSE-listed developer earlier this month reported a 2% increase in underlying revenue to £1.3bn.

Pre-tax profit for the year to end September was £356.3m, up 4% from 2011.

These rates of growth are a far cry from the run of double-digit growth the company experienced up to the point that cloud-based rivals began to lure away the small businesses that are key to its success.

Nevertheless, chief executive Guy Berruyer said Sage’s performance was “solid” with “good growth by the UK and Germany, offset by the impact of weaker markets in France and Spain”.

Berruyer reiterated Sage’s aim of doubling its organic growth rate by 2015 even after the rate halved in its latest annual results, the Financial Times reported.

Sage, whose software is used by more than 800,000 businesses in the UK, hopes that hybrid cloud technology developed with Microsoft, using its Azure platform, will boost growth.

Poor economic conditions in France, where growth is almost flat, and Spain, where unemployment is about 25%, have slowed sales of Sage’s business software.

However, higher sales of services, such as IT support, helped Sage report pretax profit above analyst expectations.


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By User deleted
28th Dec 2012 09:35

Slightly ironic ...

Never forget that historically Sage has had pretty awful products of their own (they may have been good in the 1980's; but today?) and only really gained market share by purchasing others in an endless buying spree. Inevitably this results in a disparate portfolio of mis-matched products that they either try to integrate into their own, kill off or run as separate products - integration ! what integration ? (compare this to Cloud api's, web services etc.)

Essentially, Sage is first and foremost an advertising company with software taking second place. Why else would they run historic software well past it's sell by date making very few serious changes to their programming model year on year simply so they could 'pass GO' and collect the annual release fees - so effectively hanging their captive customer base out to dry

Furthermore they have been doing this for years, with no future vision for the benefit of their customers, and were only forced into change because of the threat of the Cloud.

Their first entry into the SaaS market was a total disaster and interestingly they seem to have air-brushed the debacle of 'Sage Live' out of their history (try looking for Sage Live on Google); yet still retain the domain on Nominet?

Also bear in mind that Sage refused to enter the market at the beginning and this stance continued for a long time after others had implemented ASP/SaaS/Cloud based solutions - preferring instead to defer committing until others had provided the ideas/innovation and taken the risk

Whereas if they had actually engaged at the outset, critcal mass for Cloud systems could have gained momentum a great deal faster simply because of their participation - so once again not content with supplying dreadful software they actually hindrered the progress and the way forward in other areas

... and now '.. Sage looks to cloud for silver lining ..' - mmmm ....

Frankly this company does not deserve any of the benefits from the Cloud and it is rather ironic that they are now looking to this medium to bolster their sales

The real question for purchasers is - do you really want to partner with a company like Sage who didn't have the vision, ability or commitment at the outset and now wish to capitalise on others coat-tails OR should you go with other existing organisations who had confidence in their own ideas to ensure Cloud innovation came to fruition ?

Simple really

Sage = opportunism after all the hard work had been doneother providers = innovators who believed in their own ability and the future of their products

I know which one I would chose

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