Securing Strategic Software

Sage Software lives and dies by its channel: 45 percent of its revenue is driven by its network of solution providers, which includes some 6,000 partners. To keep them happy, the company is experimenting with innovative support programs, a move that helped Sage secure the top spot in the VARBusiness Annual Report Card category Business Software/Strategic.

With a total score of 70, Sage dusted rivals Microsoft (66) and Business Objects (61) in a category that includes analytical software as well as accounting, financial and CRM applications. Microsoft edged out Sage in the product innovation subcategory by 72 to 71, but Sage dominated both rivals in the support and partnership subcategories, which it won by 7 and 6 points, respectively.

"We're in a business where we sell the majority of our products almost exclusively through the channel. If we want to be successful, our partners have to be successful," said Taylor Macdonald, Sage's chief channel and strategy officer.

Macdonald is an ex-reseller himself, a perspective that guides his stewardship of Sage's channel program. Before joining Sage in 1998, Macdonald headed Macdonald Consulting Group in Atlanta, a top partner to both Sage and rival Great Plains (now part of Microsoft).

Partners say Sage distinguishes itself in its attentiveness to their needs. Diana Laughner, founder and president of Capitol Computer Systems in New Cumberland, Pa., began working with Sage in the late '80s, not long after it launched its flagship Act! contact- management software. Two decades of heavy growth and acquisition later, Sage continues to give even small partners the personal attention they need: "I still feel like there's somebody out there who is going to listen to my concerns," said Laughner, who runs a five-person firm. "Sage has done a good job in keeping the big-business atmosphere to a reasonable level."

While blazing its own M&A trail, Sage has also had to adjust around consolidation in its channel. Sage's biggest partners are now bigger than they've ever been before, and that necessitates new strategies for aiding them, Macdonald said. This year, Sage has rolled out an array of new programs aimed at bringing the benefits of its scale to its partner community.

A program introduced several years ago called the "100/100" initiative offers 100 partners each year $10,000 grants toward the cost of recruiting and training a new salesperson. This year Sage added a "time-share recruiting" initiative that enlists several recruiting firms to offer flat-fee services to Sage partners looking to expand their staff rosters. Sage has also created sales and marketing training programs featuring business gurus like Mahan Khalsa and John Jantsch.

"We realized that larger partners require expert outside advice," Macdonald said.

"We joke that we're working on our Sage Ph.D.," quipped Tony Chiodo, principal of Axis International in Chicago. Chiodo attended his first Sage sales academy two years ago and has since returned for several more classes, with one of his firm's salesmen in tow. He considers the training directly responsible for a "dramatic increase" in his firm's sales quality and quantity.

"It's not just 'lecture, lecture, lecture, come home and forget it all.' They really work hard on getting you to adopt the things taught so that they become a way of life," Chiodo said. "The clients we're tracking are much longer term, better-fit clients, and we're becoming more entrenched in their organizations."

Sage's new BenefitProtect program helps resellers control health-care costs and offer benefits packages comparable to those of larger organizations. Lloyd Smith, president of Mind Over Machines in Austin, Texas, appreciates such unorthodox channel offerings. "They're a very good organization to work with," Smith said.