Sage Partners Split On Channel Program Changes

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On the eve of Sage Software's annual customer and partner conference, channel partners are split on significant changes the company made to its channel program tier structure and margins earlier this month.

The new schedule, which took effect July 1, includes "stretch goals," or what Sage North America executives call "accelerated growth components," that reward partners for growing their sales quarter-to-quarter and selling software to new customers.

Some partners, while acknowledging the new goals are a challenge, are taking the changes in stride. But a number of solution providers, including longtime Sage North America partners, aren't happy with the new program and see the move as benefiting Sage more than its partners.

Related: Sage Offers Partners Better Deal For Subscription Application Sales

"This is not how you build -- and build upon -- the health of a channel partner program," said a longtime Sage channel partner, who spoke to CRN on the condition of not being identified out of concern for his relationship with the vendor. "It becomes a great de-motivator."

Other partners, however, are more sanguine about the program changes and their relationship with the company.

"Generally, I want to be a supportive partner," said Jeff Roth, CEO of SWK Technologies, a Livingston, N.J.-based Sage partner, in an interview. "I'm not freaked out and overreacting to what they're doing."

Sage and its channel partners have gone through some rocky times in recent years. In 2012, some partners were upset by the company's effort to rebrand some products from its disparate software line, dropping the names of some acquired products in an effort to promote the Sage name. Partners also were riled that year when Sage announced plans to sell off or discontinue some products, the latter including the Sage MAS 500 line of ERP applications.

More recently, Irvine, Calif.-based Sage angered some partners when it introduced a subscription pricing option for its products. Partners said the move undercut the profit margins they made selling perpetual licenses, and some partners began adding products from Sage competitors like NetSuite, Microsoft, Intacct, Acumatica and SugarCRM as a result. Sage later increased the margins it pays partners for annual subscription renewals to 25 percent from 20 percent.

The latest dust-up is over channel program changes the company first outlined to partners earlier this year and took effect July 1.

The new plan consolidates tier schedules and offers margin incentives for partners who grow their business quarter-to-quarter -- "accelerated growth" incentives in Sage parlance, or "stretch goals," as one partner called them. The program also redefined partner classifications into "Premier" and "Standard."

In a significant move, tier attainment is based on a partner's total product revenue, eliminating a previous, separate threshold for new license sales. The company does pay different margins for sales to existing customers and to new customers.

NEXT: Partners Say New Sales Goals Could Be Tough To Meet

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