Sage Offers Channel Commitment, Reassurances After MIS Group Failure5:36 PM EST Mon. Jul. 27, 2009
Sage is taking steps to reassure its partners and customers in the wake of the collapse of the software vendor's largest VAR and efforts by competitors Microsoft and NetSuite to recruit Sage resellers.
Sage partners are being sent a letter today reiterating the company's commitment to the channel and emphasizing the company's strengths, including its finances ($2.55 billion in sales in fiscal 2008), its customer base of 5.8 million users and its high ranking by industry-analyst firms as a market leader.
"We've got a diverse partner channel and I think we're weathering this quite well," said Paul Johnson, executive vice president of sales, in an interview Monday.
The Sage ecosystem was rocked earlier this month when Dallas-based MIS Group, apparently deep in debt and experiencing cash-flow problems, closed its doors with little warning. MIS Group's failure raised questions about the financial health of Sage's channel community and, last week, sparked efforts by Sage competitors Microsoft and NetSuite to recruit Sage resellers. Microsoft, in particular, played hardball by making a pitch to Sage customers and partners "concerned with the stability of the Sage Software Inc. channel."
"In recent days, several of our competitors have used the business closure of one of our large partners to try and stir fear in the marketplace about the stability of the Sage partner channel," said the letter from Johnson to Sage's 5,000 North American partners, a copy of which was provided to Channelweb.com. "As a Sage partner, you know as well as I do that our partner community is diverse, vibrant and strong."
The letter also outlines new programs Sage is offering its channel partners, including a series of Webcasts that provide resellers with education about competitive strategies. The first of those Webcasts last week was oversubscribed with more than 200 solution providers participating.
Given such efforts, Johnson said he wasn't worried about Sage solution providers defecting to Microsoft, NetSuite or other vendors. He argued that the vendor is more responsive to its channel partners -- noting, for example, that his cell phone number is on his business card. "They're not going to get that kind of attention from Microsoft," he said.
"But we will always have competitive pressure," acknowledged Tom Miller, a former Microsoft manager who was named vice president of channel management for Sage North America last month. He vowed to continue developing programs to help make channel partners effective.
The letter also said that Sage partners "have gone to great lengths to work with us to support" MIS Group's customers left in the lurch when the solution provider shut down.
MIS Group had between 2,000 and 3,000 customers, many in Texas but with at least one in every U.S. state, Johnson said in the interview. About one-third of those customers have already begun working with other channel partners and Sage is working to pair the remaining customers with solution providers based on such criteria as the Sage software used by the customer, geography and the customer's vertical industry, according to Johnson.
The executive also said that some former MIS Group executives, including those from companies MIS Group acquired, are starting up their own companies and working with MIS Group customers. But Johnson declined to provide names.
Johnson, in the interview, also provided more insight into what happened at MIS Group. The company was highly leveraged, having made a number of acquisitions, and was operating a capital-intensive business that included hardware, software and services. Sage had been aware for some time that MIS Group was struggling and had been working with the company to help with its cash flow problems. But MIS Group shut down on Monday, July 6, and Johnson said Sage only became aware of its plans the evening before.