Accounting software giant Sage has notified users that it plans to withdraw Sage 50 Forecasting and Sage 50 Job Costing as separate products with effect from 1 October.
An email notified users of the changes this week, but urged them to buy now (with a 40% discount) if they were thinking about getting them, as they would continue to be supported until September 2016 (with a valid support contract).
They would “of course be functional long after that date, providing operating systems and the Sage database structures are not radically changed” Sage added.
Sage 50 Forecasting will not disappear totally. While not available as a standalone product, it will still be available as part of the Finance and Business Packages until further notice.
But the implications for Sage’s product strategy are unclear, and clarifications are being sought from the company.
But the switch in product strategy for these specialist editions may indicate that low end cloud computing alternatives are beginning to eat into the company’s ability to extend the Sage 50 range into more sophisticated areas demanded by mid-size companies.
The new approach will disappoint those who want to do more sophisticated forecasting and budgeting work with Sage data, particularly since the company has quietly pensioned off its popular Winforecast tool. But the number of those specialist users is probably fairly low. With the need to focus on profitability to satisfy its City investors, Sage keeps a tight focus on profitability, which suggests that not enough people are buying these specialist Sage 50 tools.
Update: Sage clarification, 23 Sept - Jonathan Cowan, head of commercial management for Sage Start-up and Small Business (SSB) division, told AccountingWEB the decison to drop the two applications was “a strategic choice”. He explained that the decision was part of a wider plan: “We have a group strategy of focusing on the core. We are investing in products and technologies that we think our customers need and the market requires of us. We are looking at opportunities where we’re going to grow our business.”
That core strategy is to “be number one in accounts and payroll” and Sage has communicated that message clearly, Cowan continued. “We believe we can be best in world in those two things. We can’t be all things to all men, so we are going to focus our attention and resources and investment on things that are congruent with the core strategy to be number one in core accounts and payroll.”
To illustrate the strategic choices that have already been made, Cowan pointed out that ACT! was sold a couple of years ago because it “wasn’t part of that core story - we won’t be number one in CRM”. The same applied to job costing.
Sage has been open about both its strategic objectives and what it will be doing with Sage 50 Job Costing and Financial Forecasting. “We’re going to support them until the end of 2016 and are giving customers plenty of notice about our intent,” he said.
“We will stop selling for new orders from 1 October 2014 and withdraw technical support at the end of 2016.”
Some Sage customers acquired the programs as part of the Sage 50 Finance and Business packages, that bundle together different Sage services and programs. Although they have been notified of the end of the products’ lifecycles, they can continue using them. “They don’t require a legislative update and can can continue to be used, but we will be withdrawing technical support,” Cowan said. The Finance and Business bundles will be amended over time, with new components being added to take the place of the forecasting and job costing modules.
AccountingWEB also asked how this product announcement related to the future product strategy for Sage 50 Accounts itself. See the comment below for his response.
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AccountingWEB’s Editor at large has been with the site since 1999, rising from news editor to editor in chief, global editor and head of insight. As a roving editor, he continues to investigate the profession's use of technology around the world. He devotes his spare time to technology history and an oddball collection of stringed instruments...