In a departure from its historical strategy, business applications vendor Sage has released a new suite of applications that are natively integrated with one another.
Sage 200 is a new offering for the mid-market (increasingly the focus of the software industry’s attention) which combines the company’s trademark financial accounting application with its customer relationship management (CRM) package, Sage CRM – thereby covering both front office and back office functionality. Modular units of additional functionality can be simply integrated with the basic application.
Sage has built its toolset through many acquisitions, and has to date refrained from trying to pile them onto a single platform. Its various products were targeted to vertical or national markets, and so it had little incentive to undergo the considerable expense of uniting them in a single code base.
But in the past two years, says David Pinches, head of Sage UK’s mid-market division, that attitude has changed. The reason, he says, is that “we were being asked for [integrated solutions] from our customers a lot more. They wanted front office functionality from us as well as our financial packages.”
Although it is yesterday’s news in enterprise circles, CRM penetration in the mid-market is still as low as 10%, says Pinches. Sage hopes to exploit its significant European accounting software market share to tap that unfulfilled potential by bundling the CRM functionality it acquired when it bought North American ERP vendor AccPac in 2003 with its financial software.
By integrating its products, using a combination of web services and home-grown integration technology, Sage has effectively promoted itself from an accounting software provider to something that resembles an ERP platform vendor. As such, it has brought itself deeper into competition with the likes of SAP, Oracle and Microsoft.
That repositioning has taken a significant redirection of its R&D expenditure to achieve. Integration technology development used to comprise just 5 to 10% of its R&D budget, says Pinches, but now it is more like 50%.
Pinches adds that the company plans to introduce business intelligence and analytics tools – the fruit of its acquisition of IntelligentApps in 2004 – to the Sage 200 suite in the near future.