May 17th, 2010 by Denis Pombriant, founder and managing principal, Beagle Research Group

By Denis Pombriant, founder and managing principal, Beagle Research Group

Sage Software North America convened its annual partner meeting, Insights, in Denver today. The meeting is Sage’s chance to speak directly with all of its partners and resellers about the business and its myriad product lines, to educate and to listen to their issues and concerns. It will also be the partners’ chance to receive recognition for sales performance in each of their markets.

Sage has always had a distinct business model, preferring to sell through a partner channel rather than direct — and the approach has worked well. For a company with so many enterprise resource planning (ERP) and CRM products aimed at the small-business and small-enterprise markets, it may be the only sensible approach.

This year, the third under the leadership of Susan Swenson, I expect to see many new approaches and changes to the business models that govern the relationships with partners.

[Editors’ Note: For coverage by CRM magazine and of Swenson’s keynotes at the previous two Insights events, see here (2008) and here (2009). Associate Editor Lauren McKay will have on-location coverage of this year’s event as the week unfolds.]

I don’t expect fundamental changes — the company is not about to scrap the partner model at a time when competitors are discovering it. But I expect Sage will make good on strategies enumerated in its product roadmaps by more fully embracing cloud computing and other new ideas.

[For a sneak peek at what those ideas might be, see after the jump…]

Sage had come in for criticism, for instance, for not making a faster and more emphatic push into cloud computing. But the fact of the matter is that the company can only move as fast as its partner community. The partners’ proximity to customers has reliably brought back information from the field — and the information suggested that the end customers that Sage’s partners deal with were simply not ready for cloud computing.

I have two observations here.

First, cloud computing does not carry the same urgency for ERP that it has for front-office applications. Salespeople might be on the road frequently and need the flexibility offered by the cloud, but the people in accounting are not similarly challenged.

On the other hand, cloud computing’s cost advantage — resulting in better total cost of ownership — has put it on many companies’ agendas during the recession.

As a result, this edition of Insights should have a distinct flavoring of cloud computing as the partners come to understand that the path to providing their customers with a better cost profile goes through a cloud.

The “business model change” issue is always big when a vendor has to consider moving from being a pure on-premises provider to a software-as-a-service or cloud provider. I think Sage has done its homework, and comes into the conference with a set of proposals and programs for its partners that will help them begin the transition.

Nonetheless, the details matter and we will all be reading tea leaves later today at Sue Swenson’s keynote.

Denis Pombriant, founder and managing principal of CRM market research firm and consultancy Beagle Research Group, has been writing about CRM since January 2000, and was the first analyst to specialize in on-demand computing. His 2004 white paper, “The New Garage,” laid out the blueprint for cloud computing. (His Reality Check column on cloud computing/software-as-a-service pioneer Marc Benioff appears in CRM magazine’s November 2009 special issue on

A CRM columnist, he often guest-blogs with us at, but his own blog — where this post first appeared — can be found here. His 2010 essay collection, Hello, Ladies! Dispatches from the Social CRM Frontier, is now available in print and as a PDF download. He can be reached at, or on Twitter (@denispombriant).

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