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Under the subscription plan customers will pay $110 per user/per month for the Sage 100 ERP suite (the old Sage MAS 90 and 200 applications), $130 per user/per month for Sage 300 (formerly Sage Accpac) and $160 per user/per month for Sage 500 (previously Sage MAS 500). Sage CRM can be added to each for $35 per user/per month.
Subscribers will have full access to the same premium product functionality that customers get with the traditional perpetual license, Langner said, as well as the Sage Business Care Gold Plan support. The subscription also includes access to ERP financial and operational reporting tools and the Sage Fixed Assets application.
The subscription is being offered with no minimum term requirements and the right to cancel a subscription with 120 days notice. Sage will continue to offer the traditional perpetual license option for the applications.
Sage will begin rolling out the subscription option to the channel in early April. In coming months the company will expand subscription pricing to additional mid-market products, Langner said.
As when selling Software-as-a-Service or cloud applications, VARs that sell the on-premise Sage applications under the subscription pricing won't get an up-front payment for selling a perpetual license.
For most resellers, Langner said, the recurring revenue stream eventually exceeds that up-front payment. "We haven’t had any pushback on this at all," he said. And he played up the opportunity the new option provides for partners to attract new SMB customers.
But at least one partner doesn't agree that move will benefit Sage partners or customers.
"I am a strong supporter of a fair and equitable subscription model for the Sage mid-market software products. However, this proposed subscription program only benefits Sage and is detrimental to all Sage partners both large and small," said Stephen Blythe, CEO of Blytheco LLC, one of Sage's biggest channel partners, in a comment emailed to CRN.
"Reducing the composite partner margin by over 50 percent and increasing the cost to the client 2-3X adds significant value to Sage but no value to its partners or its customers. These proposed changes will have a significant negative impact on our ability to represent and support Sage product in the long haul. Partners have to be healthy in order to provide effective support to our clients. We respectively encourage Sage to rethink their strategy and provide a fair and equitable Subscription model for benefit of their partners and their customers," he said.
Sage will require its partners to "step up a little more" – in Langner's words – to meet the requirements needed to sell software with the subscription option. Along with current certification requirements, resellers have to add at least one new customer per quarter and have a 90-percent renewal rate among subscribers. Sage also plans to add customer satisfaction requirements at some point in the future, Langner said.
Sage's goal is to sell the subscriptions as often as possible through the channel, although Langner said the company could work directly with a customer if a certified partner isn't available.
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