Sage To Sell Off Two CRM Applications

The Sage Group is selling its SalesLogix CRM and Sage Act! contact management applications as the company continues its efforts to slim down its line of software products and focus on its core applications.

Sage also is selling off its Sage Nonprofit Solutions product suite, the company said Friday, and four product suites sold in Europe.

The company said the sale has an aggregate price of 93.4 million pounds (U.S. $145 million), of which 81.9 million pounds (U.S. $127 million) is payable in cash on completion. The cash proceeds will be returned to shareholders, but the company will record a loss on the deal.

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At its annual conference in August, Sage North America executives outlined a plan to focus its development efforts on a limited number of "core" applications and reduce its investment -- and possibly phase out -- a number of products.

The company has designated its ERP, accounting and payroll applications as "core," along with applications that are integrated with those software packages. Those include application suites popular with channel partners, such as Sage 100 ERP and Sage 300 ERP for midsize customers and the Sage ERP X3 suite for big companies.

The applications being sold off "were diluting our ability to invest in our core businesses," said Himanshu Palsule, Sage North America CTO and head of the company's strategy, in an interview.

"The sale of these non-core products is consistent with our strategy of focusing our business to accelerate growth and demonstrates significant progress in streamlining the portfolio, allowing regional management to focus on the considerable growth opportunities within their core markets," said Guy Berruyer, CEO of The Sage Group, the U.K.-based parent of Sage North America, in a statement.

Palsule said there are no immediate plans to sell off other Sage products.

NEXT: Increased Attention To Sage's Remaining CRM Product?

Once SalesLogix and Sage Act! are gone, Sage CRM will be the company's only CRM offering. That application is integrated with the company's ERP software and Sage's Palsule said that product "becomes even more critical" with the changes.

That's good news for solution providers like Azamba Consulting Group that resell Sage CRM.

"For Sage CRM customers, this represents a great move forward as it shows the Sage commitment to enhancing Sage CRM," said Azamba President Peter Wolf. "This transition allows everyone within Sage and the Sage channel to focus attention on Sage CRM as the core CRM solution going forward. The customers will be a direct beneficiary of this focus in the years to come.

"As a Sage CRM exclusive partner, I am encouraged by this transaction and think it helps reduce potential confusion over CRM product direction within Sage and throughout the channel. I wish my friends on the SalesLogix and Act! teams the best of luck in their future endeavors," Wolf said in an email.

Sage North America is in the process of notifying channel partners about the planned product sales, Palsule said, citing conference calls today and Monday, letters and online FAQs postings.

While many SalesLogix application sales were direct to large companies, Palsule said a number of channel partners also resell the product. And Act! had an active group of certified consultants that work with the contact management application.

The SalesLogix sale "was completely expected" given that the product was designated "non-core," said Sean Mohan, president of Strategic Sales Systems, a Maryland Heights, Mo.-based solution provider that resells SalesLogix.

"The move is good for the product. It will give it new life under a new organization that will have a commitment to the product and will be 'core' for SwiftPage," Mohan said in an email. "SwiftPage has a history of working with the Sage partners. I believe the SalesLogix Business Partners will welcome this move and quickly align themselves to work with SwiftPage."

He added that the new SalesLogix owner "has an excellent background in the CRM industry and the outbound marketing area. This can only be good for SalesLogix."

Palsule promised a "smooth transition" for partners while the sale is being concluded, but added that it's "Swiftpage's prerogative" as to what it ultimately does with the products and how it works with resellers.

Englewood, Colo.-based Swiftpage is a Sage development partner that offers a digital marketing platform for small businesses. In a statement, President and CEO H. John Oechsle said SalesLogix and Act! would complement the company's email marketing, social media marketing and contact management platform.

To finance the acquisition Swiftpage "raised significant capital" from a group of partners, including Sage itself and private equity investment firm Accel-KKR, the company said.

PUBLISHED FEB. 15, 2013