Sage Adds Subscription Pricing Option To ERP App Lineup

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Sage North America is launching a subscription licensing model for its on-premise ERP and CRM applications in a move to attract new customers, especially SMBs, and offer existing customers a new pricing option.

The vendor also is changing the prices it charges for traditional perpetual licenses for its Sage 100, 300 and 500 ERP products effective April 2, resulting in price increases for at least some of the products.

The subscription plan and price changes are the latest in a series of moves by Sage North America to shake up its business. The vendor is in the midst of an effort to rebrand some of its ERP applications and other products, moving away from older names such as MAS 90 and Accpac to names that emphasize the Sage name.

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The new strategies follow a number of management changes at the company, including the promotion of Pascal Houillon, who previously ran Sage's operation in France, to CEO of Sage North America last year. He replaced Sue Swenson who retired.

Some resellers have questioned the wisdom of the re-branding effort, saying the old product names still have cachet in the marketplace and the name changes could create confusion among customers.

Sage is now setting the starting price at $1,495 for the Sage 100 ERP suite (previously the Sage MAS 90 and 200 applications), $1,695 for Sage 300 (formerly Sage Accpac) and $2,595 for Sage 500 (previously Sage MAS 500).

A Sage spokesperson said the price changes are designed to simplify the company's portfolio have been "rationalized" to make it easier for partners and customers to select ERP products that meet their needs.

The new subscription pricing will help partners attract new customers and develop recurring revenue streams, said Joe Langner, executive vice president for midmarket and CRM solutions at Sage North America, in an interview. "It provides a lower barrier to entry to get customers," Langner said, "and our partners end up making more money under the subscription model."

Sage will pay partners 35 percent of the value of a subscription contract's first year and 20 percent of each renewal year.

Langner said the new subscription pricing will help "transform Sage from being a software product company… to being a solutions provider for the midmarket customer."

As with the rebranding plan, Sage hopes the new subscription option will encourage channel partners to resell a broader range of the company's products. "A lot of our partners are often focused on one specific solution," Langner said.

NEXT: More Rigorous Partner Requirements For Subscription Option

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