23 January 2003 Sage Group, the supplier of accounting software to small and medium-sized businesses (SMBs), plans to offer applications targeted at specific vertical industries.
According to business development director Nigel Hudson, Sage plans to acquire specialist software companies during 2003 in order to a build a range of software for its customers in the manufacturing and construction sectors.
“The manufacturing and construction industries are two sectors where our accounting products already have a strong position,” said Hudson. “We’re taking a proactive strategy and have researched the views of customers in these sectors. They told us that they would be keen to buy this kind of application from us, especially when it can be integrated with other Sage products.”
Sage will also market these products to customers that have not previously bought software from the company, he added.
Sage has proved itself adept at acquiring and integrating software companies – its international expansion has been based on buying up established local accounting and payroll software companies in new regions, such as US-based Peachtree Software in 1999.
In March 2001, Sage broadened its horizontal coverage when it purchased Interact, a provider of contact management package Act! and sales force automation software vendor Saleslogix.
However, the only vertical market for which Sage has released tailored software products so far is the professional accountancy sector, where it offers a range of taxation software, practice management software and accounts production software.
Sage’s move into the manufacturing and construction sectors could throw it into competition not only against small, incumbent specialists in that niche, but also a range of high-end software companies that offer industry-specific applications and are now focussing on the SMB market. These include Oracle, PeopleSoft and SAP.
In addition, Microsoft can offer manufacturing, order and inventory management and project management software to small and medium-sized manufacturing and construction businesses through its Microsoft Business Solutions division.