Narrator: This is The ERP Advisor.
Today’s episode: Legacy Software Review — Sage.
Juliette Welch: Shawn Windle is our guest today. Shawn is the founder and Managing Principal of ERP Advisors Group based in Denver, Colorado.
Shawn has over 20 years of experience in the enterprise software industry. On today's call, we will discuss the third largest ERP vendor in the world, Sage, and what the future holds for its various legacy platforms. Shawn, welcome.
Shawn Windle: Thank you, Juliette. Good to see you.
Juliette: Thanks for joining me today.
Yeah, so today we are going to continue with our series review of various legacy software platforms focusing on Sage. And as I mentioned, Sage is the third largest ERP vendor in the world. From your experience, Shawn, what can you tell us in terms of introduction to Sage’s legacy products?
Shawn: Yeah, you bet.
So Sage is, as you mentioned, one of the largest ERP vendors literally in the world, so that's a pretty big deal.
Shawn: So, it's definitely a very formidable application — or applications — provider in the market. And it is interesting to look a little bit at the history of the company and where the organization is now.
There has been a lot of change, but I was actually just in preparation for the call here and went back and said, “When did Sage — when was it founded?” And it was founded almost over 40 years ago, so, the organization's been around for a very long time.
Juliette: Oh wow.
Shawn: It started off with some gentlemen that wrote an app, and it was good. And then they wrote another, and it was great. And then they compounded the organization from there and there's been a lot of different organizations and software applications that have been purchased and point into the company over the years and we've seen some changes and you might hear MAS is an old word — M-A-S — for some of the products or Intacct is one of the products that's there now that was independent before.
So, Sage has accumulated a lot of different products that are all pretty strong. So, that's why it's important that we talk about them, but there are some changes that are happening.
As we've really focused, Juliette, this summer on talking about ERP and the impact of cloud as a disruptive technology, that it's definitely impacted Sage as well. And so, they have been working for several years on what that strategy for cloud looks like going forward.
And there are impacts to a lot of legacy clients around the world that they need to think about what that means to go to the cloud and to understand what is the right strategy for that.
So, we'll get into that more in this conversation, but just as a prelude I'm glad we're having this discussion, it's important.
Juliette: Well with that, do you have any insights you can share with us regarding Sage and their customer support or any considerations on the end-of-life of Sage legacy products?
Shawn: Yeah, and as I've said the whole summer for all of these apps is people are listening and maybe there's even some Sage resellers who may say, “Woah, you ERP advisors, you don’t know what you're talking about.” Tell us, call us, tell us what's going on. We have an amount of research that we have access to, but my experience has been so far this summer — we've gotten it pretty close with all the vendors, which has been great, but again, always open to folks out there letting us know.
Actually, even just recently, the Sage Intacct folks reached out to us to correct our view on one of the applications that they provide around — or one of the industries that they serve around nonprofit — the nonprofit organization reached out and said, “Hey, you need to know da da da da da.” And I said, “Thank you.” So again, you're listening to this podcast or you're listening to the call even right now. You can call us online. But just let us know if there's some information that we're not getting right.
Now, with that said, here's what we're observing.
The Sage 100, Sage 200, Sage 500, even Sage 300 — and there's a lot of variations of even Sage 300 — so that's the first thing is that you really need to understand is what product you’re running right now.
You may have an old version of Sage 100 that's even called MAS 90 or MAS 200 — that's what it used to be called before the MAS 90 is now called MAS 100, MAS 200 is referred to Sage 100, but also the Sage 200. It gets very confusing, so there's been so many changes over the years and it's true when we talked to clients like, “Okay, that's great that you run Sage, but what specifically do you run?”
So, as usual, you can go into the app. We're going to tell you, “Find out what you have today.” So, there's usually a help or an about or something in the product itself, or you can click in and click help and about or wherever that is in your screens — I'm even looking at some of the apps I'm running right now. I don't know where to click, but if you look within the product, it will say exactly what product you're running. And you want to know, not just Sage 100, you want to know the version of it. It could be Sage 100, and then there's usually a “V” — some kind of a version behind that. Because each of the Sage products — they do have different support schedules, and some of them are going to be ending soon.
So, we were just doing some work — the Digital Marketing Manager and I — had sent over some stuff about end-of-life for some of the products, and it's even confusing for me to take a look at it.
But here's the thing is when you have the version of your app, if you Google it — Sage 100 2019 V2, I think — I should do this as we talk. I did Sage 100 end-of-life but see that's the thing is you have to be really specific about the type of version that you're running and then just put it in end-of-life and you're probably going to go to a Sage site — it's called support.na.sage.com — I think the NA is for North America. And they do talk about, like it says, “What are the end-of-life dates for Sage 100?”
So that's really important. You want to know what's happening with your version of the Sage product that you have. Now, this is where it gets really confusing.
Again, Sage is the name of the company that has the different product lines like Sage 100, Sage 200, Sage 300 Real estate, or Sage 300 — I don't even know what it's called now, but there used to be a package called Accpac that was Sage 300 Accounting — but, like I said, I know it’s hard to keep track of it all this.
So, again, talking mostly to legacy customers that are running Sage products right now, find out what you have and that's super easy because you can go into the app and it'll say it. But then like I said, Google it and find out what's out there and go to the Sage sites as best as you can. That's the best source of information.
So, there are some products that their end-of-life is coming up. It's expensive and — we've talked about this many times this summer, Juliette, it's hard for these software companies to keep multiple versions going — you have to support this one and this version and this version and this version.
Interestingly enough, I don't know if the other products have alternative support options for old Sage products. I actually — I don't know because most of the clients that we work with usually — if they're near the end-of-life with their Sage product, they actually want more capability and functionality, so they're usually looking at other products,
Shawn: I'll wait to talk about what those other products are for Sage as we go through this discussion because there are other products that you should look at, but a lot of clients at the end-of-life with Sage 100 and they’re saying, “My business has kind of changed. I've grown. We brought in a new business line, or we have a new management team that wants better reports and I'd like to go look into the markets.” So, that conversation happens frequently.
Juliette: Well, let me ask you this, I don't know if like — this thought just came to me — do you think some of these legacy platforms would extend their end-of-life because they don't want people moving off their platform because of their needs and wants and maybe another software would provide that? Like would they keep extending their end-of-life to keep people on their platform?
Shawn: That that's a great question. And the answer is yes and no.
Look, software is about making money. I'm not saying that's a bad thing, it's actually a really good thing, but there has to be exchange with the software and the customer, and they're willing to pay for it. And does the app meet the needs? And there's basic economics to any business transaction that have to work or not work.
So, with that said, if we're on an older version of Sage, let's say Sage 100 2017 — like four or five years ago, now — so, four years ago you got onto this product, and I should look — actually, I'm just going to pop out here real quick and just say Sage 100 2020 course. I'm looking at payroll, and I would love to give you some specific information on this because you want to get this right. So, here's an example, Sage 100 2017 5.4 is a version released 2016 and was retired September 30, 2020.
Juliette: Oh boy.
Shawn: It's hard to keep up with this stuff.
This is again from support.na.sage.com. So basically, if you're running that product, you're not supported anymore, now is that the end of the world? No, because you can still use the product, but any kind of tax updates — like 1099 updates — or any kind of regulatory changes, you're not getting that. Also, if there's any security patches, just basically saying you're kind of on your own.
Now that I know there's programs that Sage has to help people and they're not going to just drop you. Nobody would do that. They're a great business for that. They want to take care of their customers.
But, if you're not going to move, that's the risk that you have. So, Juliette, I think the software vendors —they have to make the economics decisions because they write package after package every year and to support all those old packages is very expensive because you have to have an expert that knows 20 Sage 100 2017, Sage 100 2018, Sage 100 2019, da da da da. Somebody needs to know all the differences so they can support that. But that's expensive, and again, it's not just one expert, it's multiple people that have to support these things. So, after a while software company just says, “That's it, we're done. We're not supporting this anymore. You have to move up. You have to upgrade it. Come on, chop chop. You have to move.”
So, it's — there's realities there that if the economics don't make sense, they're going to draw up the support. That's the bottom line. If the economics do make sense, I know they're going to continue with the support.
Again, this is high-level that we're talking about right now. So, other apps we've talked about this summer — you look at SAP, you look at some of the Oracle E-Business Suite stuff — they have so many customers on certain versions of their product that they have to keep this support going to a certain extent. It's going to end at some point because the economics don't make sense for the software company.
My stomach kind of drops and I hate to say that to all the people listening that are Sage customers — Sage 100 2017 which isn’t supported by the way — but, there's just realities that we have to confront and we have to look at and then decide what to do.
And again, the best thing to do is definitely to talk to your Sage account managers. They will tell you what options you have. It may make sense to look into the market if you've had some changes in your business, but things change, they could come back again — once something is not supported, it's done. But, if we have a date of 2022 is when support ends — they may extend it — but you also need to know, are there a lot of customers on that product? If there are, there's a good chance they're going to continue the support, but if there aren't, and if the vendor has other products that they really want to move you to — Sage does — then they're probably going to cut it.
Juliette: Yep, that makes perfect sense. Perfect sense, yes. So, let me ask you, are you seeing — is there a sweet spot in the market for Sage today? Whether it be for certain business size or certain industry types, can you speak to that?
Shawn: I definitely can. And that sweet spot, I think, has evolved over time, too.
The prior versions of Sage 100 and 200 sort of ERP — MAS 9200 or Accpac, which was sort of an accounting international package — the MAS products were more domestic, but they certainly had more international, but Accpac was definitely bigger internationally.
There's a Sage 300 Construction which used to be called Timberline and even Sage Intacct today — we've got a package called Sage Intacct that used to be called intact — those applications are geared towards small-medium size organizations, especially the MAS Accpac which would go a little bit bigger. Those products were geared towards maybe a $10 to $20 million wholesale distributor, maybe a light manufacturer, little bit of services, kind of like a general American business, let's just call it that. Where somebody has a wholesale distribution business, and they are going to use MAS 90 or MAS 200.
If they were construction, maybe on the smaller end, under $100 million, they're going to use Timberline. Accpac, financials, projects, and that stuff, maybe a little more international-based which — a great product for that.
So, you had SMB, small medium sized business, even preparing for the call — I think they've got like 6 million customers which is crazy — that's more than QuickBooks, I think — somebody from QuickBooks or Intuit can correct that. It's a lot of customers, like tons of companies running their products, usually SMB's. That's the right way to look at it. It wasn't companies over $100 million or so — not to say that they weren't there, I know they were there — but that's who they really focused on in the past.
Now they also had a product called MAS 500 that was acquired with the MAS acquisition, it's called Sage 500 now. And that one is also end-of-life, bless it’s soul, goodbye. And it was for a bigger manufacturing company — we did several projects with it in the 90s, or no, the early 2000s/mid 2000s. So, it was for a little bit bigger manufacturer for sure.
So, that tells you — when we used to hear Sage, we would think SMB, like when I'd be talking to clients and they're like, “Yeah, we're a $15 million cosmetics company and we're mostly wholesale distribution, we don't manufacture, but we get the product and we need to value it and we need to pick pack, ship it and sales.” That’s a great opportunity for SAGE 200.
But now what's interesting is there's this huge customer base of say 5,500,000 customers minimum that are running these products that are legacy, that all need to move to the cloud. Most of them want to move to the cloud. There's going to be some that are like, “I'm not moving to the cloud.” We've talked about this for years that some people want their data on-premise, they're afraid that someone's going to get to it, da da da da da. And there's some truth. I get it. I definitely get it.
But you have this huge install base of customers, which is really the biggest value of Sage is their existing customers. And they have what appears to me — I'm sure I'm going to get yelled at for this one, and I'm willing to take it, I'm a big boy — two go-forward products with this company: Sage Intacct and Sage X3. Those are the two major products that we see when we work with Sage and when we work with resellers, those are the two products that have a ton of support, ton of road map, ton of executive support, ton of R&D, all that stuff out there.
So, imagine taking 5.5 million customers that aren't on Sage Intacct or Sage X3 yet — and I'm just totally making that number up, but even if it's four or five million, that's a ton of customers. If we can take all those customers and move into these other products, get them in the cloud, get the recurring revenue, that's a hell of a business right there. That’s billions of dollars of recurring revenue.
So, that's what I perceive is going on. There's still partners out there that that will support the legacy Sage products, but a lot of them are changing to other Sage products or they might even be picking some other products like NetSuite or like Acumatica. So, there's some changes even happening on the partner channel, too, with Sage.
So again, I'm kind of blabbering today, but I'm glad that we're able to have this discussion. Juliette, I know you don't run Sage, but I know you really care about the people that we talk to and who we sell to when we try to help that in this area in particular, folks need to understand that there are products that they can move to if they're on the Sage products within the Sage family. And there's always better discounts when you do that, by the way, so it always makes sense to flush that out. But you should know there are changes. It's just part of life.
Juliette: Well, what I've learned from speaking with various clients of ours is that — what you know, Shawn and what our team knows for all these different software platforms is invaluable, right? Like they come to us to help them because them trying to sift through all these dates and all this stuff, they're trying to run a business, and so that's where I have learned, because I am not a consultant, and I don't know all the technical aspects of it. But what I have learned through all this is how we can help our clients by providing the knowledge that you know, and you've taught our team.
Shawn: Yeah, well and that our team is gaining every day. I mean we've got Carly on the team who's doing like a gazillion selections right now. She’s at least in five.
Shawn: And so, she's talking to these vendors who used to be Sage vendors who are now supporting other products, and they even have install bases of customers that they've sold the Sage products to that they're trying to help and trying to get them to the next level.
But I do think to your point, Juliette, the one thing that we do provide over other folks is that we really want organizations to do the right thing. And sometimes the right thing — the right thing is different for everybody.
Juliette: That's right.
Shawn: It really is. Sometimes you stay on your product and there's no reason to change. Maybe you're not supported, but maybe your business is just pretty stable and to change would really disrupt a lot of things. So don’t do it.
All the way to the other extreme which is your business is growing and you've got new lines of business that you're offering and you have new people like I said earlier, new management wants more data, they want more dashboards and KPIs and artificial intelligence and digital transformation, like, woah, okay, this probably isn't the right thing to do is to stay on this older product, but I will tell you, let me give you the perfect example for what we see with Sage — and it's a client of ours right now — and they used Sage 100 for a very long time, 15 years — actually I can think of two clients who are almost the exact same, but I'll think about the one — the business went from a couple million in revenue to $40 million in revenue. So, a good size for sure. And, then they also had a really good implementation partner, somebody they really trusted, somebody who really knew their business and it was okay. It was like a normal condition.
But what happens is the business got bigger, the requirements got a little more complex, and the organization had to start hiring people because they're doing things manually. And so, you look at what's happening with the software and it's on a decline in terms of the impact to the business. So, they're like, “Oh my gosh, what do we do?” So, they went to the market, they talked to several firms, they hired us, and we came in and said, “You know you don't know what you don't know.”
You’ve been running this product for a long time, as most Sage customers have, and there are automations that are available today that weren't before and your business is complex and there are products that are built to scale with you and be more flexible so you can do the things you want to do and they're like, “Okay, cool. Show us. So, we went through a whole process. We said no, we’re not going to show you software until you understand the price and the risk that you're about to get yourself into and we need you to confirm that that's okay first.” So, we gave him the numbers and all that stuff, and in this case the owner was like, “I have to do it. I don't really want to spend the money, but I know the benefits there. We have to get it. I'm hiring new people that are banging on my head because they can't get their reports out of the system that they need. We're doing business with Amazon and SPS Commerce needs certain things, yadda yadda. And it's just getting too manual.”
So yes, good. Now go talk to vendors in the market. And of course, we go back to the incumbent partner, the partner who's been with them for a long time. And that partner isn't necessarily putting customers on Sage 100 anymore. They've got other products that they're working for. But that partner really knows the business and they trust that partner, so they're really looking to this partner to say what products they recommend and that, remembering they also hired us. They didn’t just go to the partner and say, “I'll do whatever you want to do.”
So anyway, that's another story.
So, we talked to several other vendors and basically have taken them through a process where they are like “Oh my gosh, I see how my business could be more automated. I see all the crazy things our customer service people are doing for orders, we can just flow right through the system, build in basically artificial intelligence into the applications to decide if an order that comes through the website is ready to process. If it comes through EDI. If it just comes through SSRS, can we just pass it right to the back?”
The guys and gals in the back could catch ship and it's out. That doesn't happen today for them. It’s a very manual process to actually print the paper in the front office. Somebody comes and grabs and brings it to the back office and then they stack it and then they — whatever it's reality. Especially on the old Sage products.
Well, long story short, we have this great business. That is just a fun company to work with, great people, the kinds of people you really want to help, and now they're looking at these new products. And they didn't even know this was out there. And I'm going to go out on a limb a little bit and I'm going to say that the software vendors have a responsibility to keep up with their customers. And I would say — and when I'm at a Sage conference some it'll probably tell me something different — but I would say that Sage has not kept up with their customers the way that some of their other competitors have.
Shawn: They had to make some acquisitions. The Sage Intacct acquisition — or the Intacct acquisition —was a very big deal for that organization.
X3 was a product — I believe that was built within Sage, I don't think they acquired that but I could be wrong. I'm getting X3 and AX mixed up with Microsoft because I think — anyway, so Sage is sort of in a little bit of a catch-up mode right now with the market, and with their partners.
So, it's because we've known some great Sage Partners, MAS product workers, even Accpac customers, even timberline customers over the years, they've had to shift to other products to really stay competitive, so I really hesitate to say some of this, but I also think, Juliette, what I love about our conversations is that it’s like talking to a friend. And I can't not say these things to a friend because you need to look at it. Just be aware for yourself. You can listen to me flap my jaws, but now at least you know the questions to ask of the people that you're talking to.
Juliette: That's right.
That’s why we have been doing this review series, just so everyone knows and is aware, and whether they stay or change, knowing is everything, right?
Shawn: That's exactly it.
Juliette: Well, continuing with that, and from your experience of working with various clients, what are the most important variables that you think are important to evaluate in terms of staying with Sage and upgrading or looking to completely change to a new ERP system?
Shawn: Yeah, I love that question, especially for Sage current customers. Because like I said, most Sage current customers have really good partners.
They have implementation partners that have that maybe did their initial implementation years ago, but they've gone to for support, and those folks know the business well. They know their clients’ organizations really well, which I have a lot of respect for that. So, talk to your implementation partner and see what they're offering.
I can think of one legacy Sage partner that now offers some Sage and several other applications. So, they can sort of do what we do a little bit. I mean, we're a little more independent but they can offer three or four different products, and knowing your business, this is the one we think is the best fit. So, there's a lot of value in that, being able to go to someone as an advisor.
And I think the other thing is — again, depending on your business model, when we think of X3 we think of pretty heavy manufacturing, maybe some light distribution also, but it's really built more for manufacturing, really complex manufacturing.
So, if you're a Sage customer and you're using maybe Sage 500, you know X3’s a no brainer to take a look at.
Sage Intacct is a really good, best of breed accounting system. It does have projects, professional service automation, there's recurring revenue for software companies, there's nonprofit capabilities that's really good, too, but you just need to say, “What kind of business are we and what sort of businesses or industries are supported by these products?”
You really need to understand the industries that the products — the new Sage products — support. That's really important because there are some industries that they don't. Fine.
So, I think, again, talk to implementation partners if you've had a good relationship — if you've had a bad relationship with them, then forget them.
We’ve seen that also, that some of the — frankly, some of the Sage implementation partners — they've also maybe been falling asleep a little bit at the wheel, sort of relying on their recurring revenue basis. I always feel like I'm like, “God, what do people say about us?” But our job is to share these observations in real time.
So, you do have to watch out for that from an implementation partner that maybe is like, “Oh no, you don't need to upgrade.” But I just went to support.na.sage.com, and it says that this current product is no longer supported. Well, I'll support you. Well tell me what that means. Well, if you have any problems I'll just fix things on an hourly basis, an hourly TNN basis. Well, we haven't had problems in five years, so maybe that's okay. But, maybe we've had a lot of problems and because we're pushing the app, pushing the envelope of the product, or even the implementation partners, that's when you call us and we can help out with that discussion even just to get going in the right direction.
Juliette: Well, with that, Shawn, can you provide an outlook or give us some insights on where you feel Sage is headed in the future?
Shawn: Yeah, I sort of gave you a little bit of the indicator that there aren't — well, I don't think anybody, any of the firms if I think about Microsoft or Unit4 or Oracle SAP, just in terms of quantity of existing customers, I don't think anybody has as big of customer base for ERP as SAGE. I'm talking numbers of companies, not users or whatever. I mean, it's literally numbers of customers. They have a lot of customers.
Shawn: And clients when it comes to enterprise software, they don't like to change, usually. They just don't for all the reasons we've talked about.
So, I think the real opportunity for Sage is to really crisp up that message for that, again, 5.5 million customers out there that aren't on one of their newer platforms to say, “This is how we're going to really take care of you.” And they're fine. That will set them up for another 20 years.
I think without that message — and there's great messaging out there already — but I think the more room they leave for confusion for the different publics that are out there, take the Sage 300 Real Estate application used to be formally known as — was it fka Timberline? It's like a rockstar name.
What makes sense? Sage Intacct Construction. That's something that — actually in our research here we just pulled that up that they were looking at a construction solution.
So, Sage already knows all this stuff. They've been doing it for years and years. I mean, we work with all the vendors, we don't have time to know Sage’s strategy. They do. So, they are putting products in place that have — it makes sense for a client to migrate to the newer products that are cloud-based.
So, I think making that message really clear and easy for customers to understand and having comparable if not better functionality sort of puts us out of business. And I'm okay with that because there's enough customers out there for us to help that we're totally fine. I really mean that. But I think that's where I'd like to see Sage go into the future is to get that message totally clear so that a person who owns a $25 million gun range, who's running MAS or the old MAS 100 or Sage 100 and have no idea what to do, here's your answer. It's cost effective. Here's a great implementation partner that can support you. Don't go to market and shop. Here's the data migration path that we can give you for real. Done. I'd love to see that happen.
Juliette: Right, well what we've learned, not just with this legacy review series that we've been doing, but honestly, through all of our topics and all of our clients is knowing what you need and being prepared and doing the due diligence for what is best for your company. Is that right?
Shawn: It's spot on.
And I think the only new thing that I would add to that — probably looking at my own personal life — is if software and upgrades and “what do I do?” is one of those things you know you have to do, it goes on a list — look at what to do with Sage 100. You write it down, right? And then you write down everything else and then you work on everything else except for that one item and you're like, “Okay, fine.” Then you do another to-do list later or you talk strategic goal, “We're going to upgrade” and you do everything else but you — or maybe a couple other things you don't do — but you don't do that over multiple years. We're not confronting it.
And I'm thinking of three things specifically on my list. They keep moving on and on that I need to handle right. I have a special list next to me in my office of things to handle that I don't handle so it's —we’re all humans. I get that.
But I would say in this instance especially, I do think Sage has some good support folks. You just need to give them a call. Just start the process. Just go online and is my Sage blah blah blah version supported in Google and you're not going to see my ads — I would never pay for ads like that. You might see some competitors. Go ahead and go with them, fine, but you won't see us. We want you to get the data directly from the source.
Shawn: And then you'll have a — you can call the 1-800 number whatever that number is for Sage and start talking to account managers if they're not already calling you and it's going to take a little bit of time, but look when you get to the actual facts, you kind of even know sometimes what they're going to say, and that's probably why you're putting it off. But you need to get that information, otherwise as a as an employee of an organization or the owner you have a fiduciary duty here to know what the heck is happening with this product that's running your entire business or your nonprofit or whatever it is. So, get the information. It's out there.
But, you might get to the end and be like, “Oh, I knew it.” But I do think there are paths out there that are going to make sense to go for, but just do it. Just start, that's the thing.
Juliette: That's the thing.
Well, Shawn, thank you so much for joining me today and, as always, sharing all your knowledge, I appreciate it.
Shawn: You're very welcome, Juliette, and you have like the biggest ERP mind with all this data. I love it.
Juliette: I'm learning from the best I'll tell you.
Shawn: Thank you. Thank you for caring so much about our clients, too.
Juliette: Absolutely. So, all right, I think we've come to the end of our time today.
Everyone, thank you for joining us for our webinar today. Please let us know if you have any questions. We're happy to help in any way we can throughout this series we have actually gotten a lot of good feedback and people have sent us emails with different questions and we're happy to help in any way we can. Just let us know.
Our next call is scheduled for Thursday, July 15th when we continue our legacy software review on Deltek, Epicor and IFS.
Please go to our website erpadvisorsgroup.com for more details and to register.
ERP Advisors Group is one of the country's top independent enterprise software consulting firms. Advising mid to large sized businesses on selecting and implementing business applications including ERP, CRM, HCM, business intelligence and other enterprise applications which equate to millions of dollars of software deals each year across many industries. This has been The ERP Advisor.