Sage continues strategy to build up channel business

Sage continued on the more channel-friendly course laid down last year after Stephen Kelly took over as CEO, and while the strategy itself is not new, the company believes it made some major steps this year towards meeting its goals.


Alan Laing, Sage’s EVP of Partners and Alliances

CHICAGO – Sage Software remains an anomaly, in that while all its markets above small business are served by companies with strong channels, the overall percentage of business that goes through their channel is fairly low. Under current CEO Stephen Kelly, the company has been taking tangible steps to try and change that.

“We have not put through investment behind the partner program in the past,” said Alan Laing, Sage’s EVP of Partners and Alliances, who was specifically brought into the company by Kelly to beef up the channel business and make it consistent across geos.

“Our programs were different between country, and product,” he said. “Things were very diverse because Sage grew up through its acquisition strategy over the last ten years.” At one point, Sage effectively had 54 separate programs.

“Partners said that we loved them – but that we were too complex,” Laing added. “One said that he had 18 different people at Sage to talk to.”

Approximately a third of Sage’s revenues go through partners today, although that number varies wildly by geos. In the U.K., Sage’s home turf, only 17 per cent of the business goes through partners. Canada’s channel share is condsiderably larger, thanks primarily to the strong channel-focused Sage 300 business that came when Canadian-based ACCPAC was acquired. While the product has since been updated and rebranded, it remains a channel product, which is exceptionally strong in Canada thanks to that legacy.

“We want to get the total percentage of channel business up to 45 per cent,” Laing said. Longer term, there’s no reason it couldn’t go much higher than that. Everyone else in the market is up there, and we are going to do a lot more too.”

Laing outlined the steps Sage is taking to move the channel business in that direction.

Sage One, Sage Live and Sage X3, our cloud products, are global products,” Laing said. “The routes to market we are building for those are digital marketing, and we are being very ambitious in growing our partner ecosystem on those routes. We are making major investments in those routes to market through partners. We are not heavily investing in direct sales there.”

Vendor partnerships have also become critical since Laing came to Sage.

“We have taken our Microsoft relationship to new levels with our new partnership around Office 365,” he said. “We have built out our Amazon relationship, as well as Salesforce and Apple. That’s one level of our go-to- market – alliances.”

The VAR and integrator channel is also being expanded.

“We want to partner with both global and local companies,” Laing said. “A company like Data Domain is on my wish list, but they haven’t come to me yet. At the same time, we need local guys. I don’t want to just go to the global ones and upset the local guys. It’s a balancing act.”

Sage has been strongly emphasizing the No Forced Migration to the cloud message to both partners and customers since last year’s Sage Summit. At the same time, however, Sage is impressing upon partners that while they aren’t being forced to migrate customers to the cloud, the partners do still need to become cloud literate.

“Partners, we love you, and we will offer you choice – but you have to get that cloud thing,” Laing said. He said Sage has structured their incents specifically to try and motivate this behavior.

“Partners make a lot more margin on cloud than they do on on-prem – at least ten points better,” he stated.

While the new Sage Partner Program was announced late last year, much of its components still remain to be rolled out.

“Today, partners in the Sage Partner Program can buy Sage One, Sage Live and Sage X3,” Laing said. “At the same time, we have not yet released the actual tiers. We are doing this country by country because of Sage’s history. The platform depends on each country’s IT infrastructure, and while we have reduced the number, we still have 23 back ends. We will definitely launch in Canada in FY 2017.”

Laing also emphasized that when it comes to recruiting new partners, Sage is definitely open for business.

“As far as our ideal partner, we know they will be non-exclusive but would like them committed to Sage, committed to the cloud and committed to scale up and grow their business at the scale we need to grow at.”

He also stressed that Sage is in active channel recruitment mode.

“I do have goal of the number of partners I want – but I can’t tell you what it is!” he said.