When you get to a fork in the road, take it that’s what Yogi Berra once said and convoluted as it might seem, it’s wise advice. This wisdom encompassed Sage’s announcement today that it was selling off two of its front office CRM solutions, ACT! and SalesLogix to Swiftpage.
According to the press release announcing the sale, “Swiftpage provides digital marketing service solutions for micro and small businesses and, as an existing ACT! and SalesLogix partner providing integrated E-marketing services, is well positioned to advance these products. Sage remains committed to CRM via its global Sage CRM solution and will continue product investments to ensure it meets the needs of our SMB customers.” You can access the full press release here.
Good. I really mean that.
ACT! and SalesLogix have a big presence and loyal customers — more than 2.5 million for ACT! alone. But they’ve become non-core to the business. They’ll do well with a new sponsor as the press release intimated: “Swiftpage has partnered with Sage for years, and knows our products and customers well. With access to new technology and resources, it can deliver even more innovative, and integrated, products and services that help small and medium sized businesses convert prospects, retain customers and grow.”
Swiftpage is responsible for the Sage E-Marketing connected service, and Sage will maintain a 16.1% stake in the new ACT/SalesLogix operations, so the relationship will continue.
Mergers and acquisitions happen all the time in business. Sage knows this rather well as a company that has grown by acquisition. This move makes sense because it acknowledges that the market has changed since these acquisitions took place and because it enables the company to better focus on clear market realities in the CRM market.
Sage has had too many CRM solutions and the situation had become increasingly obvious over the last few years. Sage’s attempts to rationalize how the three solutions fitted into an overall market strategy, which included integration with its numerous accounting systems, was at times strained. Unlike its accounting packages, many of which address specialized markets like construction, manufacturing and real estate management, the CRM strategy was more based on company size and in the highly scalable SaaS age, that segmentation didn’t work so well. It also saddled Sage with three code sets that needed to be maintained and upgraded, an expensive proposition over time.
So with this divestiture the company gains simplicity in the form of one code set and market reach because the remaining product, Sage CRM is already SaaS based and capable of being installed in a variety of situations including cloud and on-premises, a tactic taken by all of the major software vendors except Salesforce.com.
Over the last few years, the CRM market has become inundated with new best of breed offerings that leverage social techniques like crowdsourcing and other social products like Twitter, LinkedIn and Facebook. Social techniques are proliferating in solution areas like marketing and service but also they have opened up many new niches where companies like GetSatisfaction, HubSpot and Awareness play.
But Sage had missed some of the social revolution focusing its attention instead on its Partners and SMB customer base and the front to back office business processes that they care most about. Nonetheless, as social has penetrated deeper into the front office, SMB’s have taken up the social challenge and Sage has needed an answer. With a single product and a robust API set the company will now accelerate in this critical area.
Sage’s response to market challenges in general have to go through its sales and implementation partners. It’s a diverse and competent group but each wants and needs different things and this reality drives multiple competing demands of its three CRM maintenance groups.
So, in one stroke, Sage realized some of the value in its ACT! and SalesLogix brands while enabling itself to better focus on core CRM in a way that I do not believe will be dilutive of its strengths. And as far as the partners are concerned, CRM was always a specialized offering for them; their primary focus has been ERP. While many carried a CRM product, more often when a partner found a CRM opportunity embedded in an ERP need, the partner had to bring in a CRM specialist partner. So the simplicity of one CRM product will be welcome.
So, I think this is all good for Sage. It must have been a tough decision especially because it will mean employees and likely some partners changing allegiances but that’s business. Moving forward with Sage CRM the company can unhesitatingly launch a multi-pronged on-premise, on-demand, cloud services campaign without worrying about which partners in the other product lines will be adversely affected. Let the innovation begin.
Today Sage North America announced the 25th anniversary edition of ACT!, the contact management software.
What were you doing for a living 25 years ago? That would be 1987 and I can remember vividly. I was selling software for a company whose offerings ran on DEC VAX and PDP-11 mini-computers. We had a fax machine, VT-100 terminals on everyone’s desks and we were thinking about getting a phone system. Remember those pink message slips?
The VAX was the primary development machine and it hosted all the people in the company for things like word processing and spreadsheets. My company had been founded by a smart programmer which meant the VAX was his and we just lived on it. Whenever he wanted to compile a program the lights dimmed, screens froze and we went out for coffee.
I saw an ad for ACT! in an in-flight magazine next to some ads for steaks flash frozen in the mid-west and rushed to your door. As a sales guy, the load of paper on my desk and in my briefcase was killing me. I’d experimented with keeping data in a spreadsheet but it seemed like more work than it was worth. I’d also recently taken a relational data base course and dreamed of a simple database that could track my contacts and remind me when to call them again. I’d gotten far enough to convince my SE to write something like it. I almost got fired for using precious resources in such a profligate way too. Good thing I was crushing my numbers at the time.
Ah, the good old days. I looked at the ad with longing but knew that our CEO would never let a PC into the building and ACT! ran on DOS so all I could do was look and wonder when I’d be able to get my hands on it.
Twenty-five years is a very long time in this industry and it is a testament to ACT! and Sage and Pat Sullivan who invented it that ACT! remains relevant. Sullivan got it mostly right when he built the first version and Sage continues to keep it relevant for a large and loyal customer base that needs just what ACT! delivers. Congratulations to Sage.
For a little background, remember that Sage grew by acquisition, one product and its development and marketing team at a time. By last year, Sage had become the Babel of the software industry with a mix of products, mostly ERP, with different code bases and even file systems. Notice I said file systems and not databases because some products were, and still are, running on flat files.
When a company rebrands it can either be interpreted as a positive and forceful thing or it can be seen as something else. The idea last year was to replace a product name with a unique Sage brand name containing a number like Sage 50 for instance.
Since Sage has multiple overlapping products, tongues began to wag. Would ACT! become known as Sage CRM 101, for example? We didn’t know. To many of us, the rebranding resembled chair rearrangement on the deck of the Titanic.
But fast-forward a year and things have worked out. The rebranding was not an isolated exercise and the company has asserted itself by identifying products that are core to its mission and those that are not. Non-core products, which tend to run stand-alone, are not destined for the dustbin but they are being treated differently than the core products, which can be combined in an integrated solution.
Sage has three CRM-ish products, ACT!, SalesLogix and SageCRM. ACT! is CRM-ish because it is billed as a contact manager, not specifically SFA. SalesLogix is an older CRM product built for a Windows client-server world that has received many upgrades and SageCRM is a SaaS product that can also be installed on-premise. And the winner is? Well, there are no winners and no losers. But if you want Sage’s most modern (and I didn’t say feature rich though that is a debating point) CRM you’ll want to go with SageCRM because it is the one that is “core” and will receive the lion’s share of development dollars and integration support with ERP going forward.
The old Sage approach was to sprinkle development dollars across the whole portfolio sometimes paying different brands to reinvent the wheel. That was necessary because each product had a constituency (read reseller network) brought along in the acquisition. While some resellers carry multiple products, many just focus on one or two products on which they base their business and this is key.
So all this preamble was needed to say that one of the biggest areas of re-thinking for Sage is not about any single product but about its go to market strategy and its resellers. Sage doesn’t sell direct and over time, its resellers may have gained the upper hand in driving product development and enhancement for their pet products regardless of the overall good of Sage. It’s human nature. As Sage tries to rationalize its product set and brands, it is slimming down the number of code bases it has to support while trying to bring along its partners — a non-trivial task.
Nonetheless, Sage has to deal with (and has begun the process over the last few years) a marketplace that demands social, mobile, analytic and real time solutions. And it’s core/non-core strategy is focused on freeing up the resources needed to give the partners products with the ability to compete in the years ahead.
Does everyone like this strategy? What do you think? But more importantly it’s working. During Houillon’s keynote, they showed a powerful video of customers using Sage products from the iPad driven customer meeting to the back office do-we-have-it-in-stock query, to placing the order and billing. It looked very cool and was especially impressive because the technology was focused on the SMB market with the clear message that almost any business can afford to work this way and this is how it will be done in the years ahead.
Partners that have become successful writing programs for reports or managing systems or just running cable might bristle but there aren’t many of them. Most understand there are major changes happening in the industry and the name of the game is “adapt”. Most worry about driving enough revenue from continuing operations because they are accustomed to the license and services model. I would only suggest that there is an important difference between revenue and profit and everyone would be well served to revisit that distinction.
There is a raft of new thinking about ideas like churn, monthly recurring revenue, deferred revenue and other things that are common to the subscription economy. The information is out there and I have to believe that the more progressive partners are doing everything they can to learn about it. For now it was good to see a CEO like Houillon use words like “tough love” to give the troops the idea that the path has been set and they aren’t going back.
Seems like ACT! has been around forever. Actually, it’s just 25 years and while that’s an eternity in software, kudos to Sage for keeping the technology up to date with improvements like social and mobile access. The company has released a short video commemorating the milestone.
Today’s ACT! is a far cry from the product I first used in the 1980s running on DOS. I remember reading an ad for it in an in-flight magazine and thinking, this is it! Back in the day, there was no such thing as SFA or CRM and contact managers like ACT! and Goldmine were amazing. They ran on your desktop and soon your laptop computer and they became places where everything you knew about a deal was stored. No more lists, spreadsheets, and legal pads with cryptic notes and scribbled phone numbers.
Sure, CRM would follow with even more functionality but for many organizations and individuals, a copy of ACT! and a laptop were about all you really needed (add Word, PowerPoint and Excel or if you’re a geezer like me Word Perfect, Harvard Graphics and Lotus to complete the ensemble).
ACT! has a remarkably loyal user base and over three million deployments. And while most of those deployments are for individuals, a growing cadre of businesses — tens of thousands, actually — are now using the technology to support sales workgroups.
ACT! has prospered despite all this competition because it fits a big niche that demands simplicity, economy and that keeps up with the times. So, good on you SageACT! and happy birthday.
For a long time it has been conventional wisdom that ACT! is one kicking good deal for people needing a contact manager. But over the last few years it seems the company has been playing a game of one up with the rest of the market and even challenging the SFA/CRM players over the difference between a contact manager and SFA.
ACT! has always been a price performance leader and this year’s version (2012 that is) clocks in at $239.99 which amounts to twenty bucks per month, if you could buy it that way. That compares favorably with the legion of SaaS based SFA out there, but more important than price is the functionality and that goes to the idea of one-upmanship mentioned above.
The newly announced ACT! 2012 (you can watch some informational videos here) has some valuable and not often considered capabilities like a scratch pad that lets you take notes and then use them as a todo list assigning data to a new or existing contact or just letting you work through the todo’s.
Universal search helps you find documents or other information within ACT! and filter search results by relevance and click items of interest to go to those fields or attachments.
There’s also integration with Google apps. This is a nice bi-directional integration that lets you send email from within Google Mail for instance and have it recorded as history in the ACT! application.
ACT! has been mobilized in the best sense of the word to work with Android devices, iPads and other tablets and it checks out in browsers like Chrome and Safari.
Finally — and I think most impressive for ACT! 2012 — there is something called Sage ACT! Connect which makes it easy to access your ACT! data from the road. Connect also puts your instance of ACT! 2012 in touch with a fast growing list of added services that Sage is now offering for things like marketing and lead generation.
All in all this is rather impressive. We won’t touch on the user interface and all the hours Sage spends with customers and users making sure not a mouse click is wasted. Nor will we mention the 2.8 million individuals and 59,000 companies that use ACT! in their businesses. But suffice it to say, this is not your father’s ACT!