Sage Software Snarfs Up Intuit MasterBuilder Business

Sage Software, following in its own footsteps, is buying Intuit's MasterBuilder business.

Sage CEO Ron Verni announced the deal—but no details—during his kick-off keynote of Sage Software's Insights 2006 partner conference.

MasterBuilder is software for managing the business behind construction projects and it competed with Sage's own Timberline brand, Verni acknowledged.

"MasterBuilder has over 6,000 customers, it was pre-eminent in its segment and, quite frankly, was giving us a hard time. So, like we always do, we decided to buy it," Verni told nearly 3,000 attendees at Gaylord Opryland in Nashville.

"There had been a gap in the market between Peachtree by Sage at entry level and Sage Timberline. This fills that," Verni noted.

Verni also stressed a few critical commitments the company will continue to push. Last year Sage rebranded itself, relinquishing its old Best Software titles that had been used in North America, and consolidated the company's multiple ERP, accounting and CRM brands under a global Sage label.

Now all the component products from Act and Peachtree to Saleslogix and MAS 90, carry Sage prefixes. Many of these products came to Sage via acquisition.

Overall the company has a market cap of something like $7 or $8 billion and leads the overall business software category in small- and medium-sized businesses, Verni noted.

Sage remains committed to a partner-centric model and the SMB market that model best services.

In an offhand reference to unnamed enterprise software vendors who are trying to penetrate this market, Verni said: "There are people who come down from the top because they suddenly realize there are only 500 companies in the Fortune 500."

"SMBs are the growth engine, but [these vendors are] conflicted because they have direct sales. Last year, NetSuite stood up and said it would be a partner company and is now taking a different tack. Other competitors have 20,000 partners so if you're in a deal, there may be 50 or 100 other people vying for it," he added. This was likely a reference to Microsoft which has been criticized by some for over-distributing its products and letting margins erode.

NetSuite, which has painted itself as a partner-friendly option in hosted-ERP, is feeling some partner angst of late.

Indeed, over the past few years, enterprise giants Oracle, PeopleSoft, Siebel (now all one and the same) and SAP have all attempted to move down market to SMBs with mixed results.

Verni also promised 16 new product launches at the show including Peachtree by Sage Quantum edition, a package that would fill a gap between low-end Peachtree accounting and low-end ERP packages.

"We have to keep customers from going to the competition. It's hard to leap from Peachtree to MAS 500 or Accpac. This is a place to go while they're transitioning. It will let them expand their business and then move on," Verni said.

Verni also said Sage has acquired Contractor Anywhere, a developer of accounting and project management software for builders and service contractors.

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