Earlier this week, Channelweb.com reported on Sage's response to questions about the health of its channel programs and partners following the sudden shutdown of MIS Group, the vendor's largest reseller, due to financial problems.
The disruptions caused by MIS Group's actions spurred some of Sage's competitors in the application arena, including Microsoft and NetSuite, to launch efforts to recruit Sage's channel partners, further adding to the perception of a partner ecosystem in turmoil.
The linchpin of Sage's communications with its resellers was a letter from Paul Johnson, executive vice president of sales, outlining the strengths of the company and its "diverse, vibrant and strong" partner community. We thought it would be valuable to provide our readers with the complete text of the letter, which was sent to all Sage partners in North America under the heading "Sage Partner Community Update."
Dear Sage Partner:
First and foremost, I want to thank you on behalf of the entire Sage organization for being a valued business partner. We recognize and appreciate the commitment to our business that you make everyday. These challenging times have brought out the best in the Sage partner channel and for that we are immensely grateful.
In recent days, several of our competitors have used the business closure of one of our large partners to try to stir fear in the marketplace about the stability of the Sage partner channel. As a Sage partner, you know as well as I do that our partner community is diverse, vibrant and strong. As the market leader, we have seen these competitive actions in the past and expect we will see them many times in the future. We will be responding to the media directly in the coming days, but I wanted to first reach out to you with useful information that can help you respond to our customers. This update is part of a measured approach that builds on the programs we are delivering to help you be successful in this increasingly competitive market.
One of those programs kicked off last week when nearly 200 of you participated in the first in a series of Sage Partner Advantage Webcasts that focused on competitive strategies. The session was oversubscribed with many more of you wanting to attend. As we promised, you can view the recording of this event, along with additional related educational materials. These documents will also be available on the Sage Partner Advantage Portal later this week. We will be delivering significantly more Sage Partner Advantage Webcasts over the coming weeks and months, and I am confident that our education programs, which have been the cornerstone of our award-winning partner strategy for years, will continue to serve you well.
In the short term, it is important to keep in mind the basic facts that I know many of you are already well aware of and use in your sales and service processes today. I encourage you to be in touch with your customers to assure them of your commitment to their on-going success, and I offer you these points to consider:
Sage is a global company whose revenue in the last fiscal year was $2.55 billion with EBITA earnings of $590 million. Sage has 5.8 million customers worldwide using our business management applications to run their operations. Sage has a large, loyal, and growing customer base " we added 371,000 new customers globally in FY08 (Sept. 2008), 124,000 in North America. Sage is focused on customer success: more than 40% of our people work in technical support, service, or training roles for customers and partners.
Our market strength:
Sage is recognized by top industry analysts as a market leader. IDC ranks Sage number one for financial and ERP applications serving companies with under 1000 employees. (IDC Worldwide ERP Vendor Analysis, Dec. 2008). AMR's Global Enterprise Applications Market Sizing report (July 2009), places Sage number three worldwide for vendors/products serving customers of all sizes. They rank SAP number one followed by Oracle, Sage, Infor, and then Microsoft. This fact is impressive considering the larger vendors are focused on the Enterprise market. Gartner Dataquest ranks Sage the North America leader for lower mid-market ERP (for companies with 100-499 employees). They rank Sage number one followed by Infor, Microsoft, SAP, and Oracle. (Gartner Dataquest Insight: ERP Suite Leaders, Trends and Characteristics in the North American SMB Market, 2008. Oct. 2008).
Our products and services:
Sage's portfolio offers the broadest range of business applications for SMBs on the market, from core accounting and ERP to CRM, HRMS, and the special needs of manufacturers, distributors, construction, healthcare, nonprofit, and real-estate organizations. These applications solve the needs of businesses ranging from small to medium to enterprises around the globe.
Our products consistently receive top-ranking in industry reviews such as those for Sage MAS 90 and 200 ERP and Sage Accpac in CPA Technology Advisor. Our products are among the top ranked among users: 28% chose Sage solutions as their mid-range accounting preference in the 2009 CPA Technology Advisor Reader's Choice Awards.
Our products support a wide range of technologies, designed to provide customers the lowest TCO and the best fit for their business. We offer choice because we know every customer is different. For example, we offer both hosted and on-premise ERP and CRM. Our products support a range of databases and operating systems and can be used locally within a niche industry or globally. Our applications can be purchased as standalone modules or bundled into a tightly integrated suite.
A strong and diverse channel:
The closing of a reseller organization isn't unprecedented. Many vendors have experienced it in their partner channel from time to time. You should be aware that, while MIS was a large organization, the financial impact on Sage is not material to the overall business. Through collaboration with our strong and diverse network of both large and small business partners, Sage is responding responsibly to ensure the continuing success of our affected customers.
Many of our business partners have gone to great lengths to work with us to support these customers. The process, while difficult under the time constraints, has been extremely gratifying. Customers have expressed their thanks to us for the quick and proactive response to their needs. Again, I would like to thank our entire channel community for their professionalism and diligence.
You are part of a tightly knit Sage network where every partner and every customer makes a difference. It is what has made us successful together for years and it is what will continue to make us successful. The Sage business partner community is strong, vibrant, and dedicated to serving customers. Let's focus our efforts there, on the vision we share, which is excellence in serving our customers.
Again, please use this as an opportunity to reach out to your customers to ensure their satisfaction, and please continue to provide direct and candid feedback to me and other Sage executives. By doing this, we will continue to strengthen an already strong Sage partner community.
In closing, I want to thank you again for your support and commitment to Sage and to our mutual customers. I look forward to continuing a long and successful relationship with you.
Paul Johnson, Executive Vice President Sales, Sage Business Solutions, Sage North America