Sage Group

The company has 6.3 million customers and 13,400 employees worldwide. The company operates in more than 24 countries, including the UK, Europe, North America, South Africa, Australia, India and China.

Performance indicators

2017: Revenue growth by 19.2% to £1.7 billion

In 2017, the revenue of the Sage Group amounted to 1.7 billion pounds, which is 19.2% more than a year earlier. Annual profit increased from 300 to 345 million pounds.

Sage continues to move to the subscription software distribution model, trying to push new customers to purchase cloud products. In 2014, the subscription model brought the company 22%, and in 2017 the indicator increased to 37%. Sage cloud solutions were used in 52 countries, and the number of relevant contracts increased to 600 thousand.

Sage Group Financial Performance

Revenue from recurring revenues rose to 78% of the total. The vendor's recurring cloud revenue (Sage Business Cloud products) exceeded £300 million, an increase of 80% compared to 2016. Moreover, back in 2014, the company was not actually in the cloud market, the press release said.

Sage receives most of its revenues in Central and Southern Europe - about £580 million in 2017, which is 18% more than in 2016. In North America, turnover jumped 21% and reached £492 million. In the northern European market, sales increased by 10% to 368 million pounds.

It also follows from the financial report that in 2017 the company entered into a record contract (worth more than 300 thousand pounds) in relation to the Sage People product. Through the company's software solutions, combined customers in 2017 conducted cashless settlements in the amount of £3 trillion, which Sage associates with the developed capabilities of cloud products in terms of integration and automation.

On April 13, 2018, Sage had its strongest quotation collapse in the previous 25 years - by 20%. This happened after the company lowered its revenue forecast for 2018.^[1]

Business in Russia

2010: Entering the Russian market

At the end of 2010, the localization of Sage ERP X3 for the Russian market was completed. The interests of the company as an exclusive partner are represented here by Energy Consulting. Details.

2013:7 customers over two years

In June 2013, Christophe Letellier, head of the European office of Sage, shared with TAdviser the first results of work in the Russian market of ERP systems.

According to him, sales here are still developing at a rather slow, but hopeful pace. In two years, seven companies became users of the Sage ERP X3 system in Russia: two companies in 2012 and five in 2013. The company does not disclose the names of its first customers, noting only that they work in two segments - discrete production and logistics, and the scale of the largest implementation is 28 users. "One of the clients is engaged in the production of filters for energy," adds top manager Sage.

So far, the low sales volumes of its ERP system in the Russian market in the company are associated with several factors. First, entering a market as large as Russia takes time to become recognizable and accepted. Secondly, the sales cycle in this segment itself is from 6 to 9 months, so in the first nine months of work you can not wait for them, says top manager Sage. In addition, Russian customers have a significant difference from Western European ones, which the company revealed in the process of work, says Christoph Letelier.

"When entering new markets in Western Europe, local customers usually take into account the experience of customers who have implemented a similar system in other countries. In Russia, customers want to see examples of Russian implementations. But when you start working in the market from scratch, such cases are difficult to provide, "he explains. "Now that we have examples of local implementations, it should drive faster sales growth in the future."

Russian market Christoph Letelier calls "difficult, with demanding by customers. " The main customers here, as well as around the world, the company sees a business with a staff of up to 1000 people with a turnover of 10 million euros. At the approval stage on the Russian market, the company sees the main niche of its product, primarily in companies engaged in high-tech production. The average scale of Sage ERP X3 implementations worldwide is about 20 users.

Speaking about competition in the Russian market, Christoph Letelier notes that it is difficult to compete with local players everywhere - both with SAP in Germany and Oracle in North America - so it is important to find something that differs from competitors.

"One of the advantages of the Sage ERP X3 is a strong production module. Sage ERP X3 allows you to manage capacity planning for work centers, automatically schedule operations, automatically replace work centers, and keep records on an unlimited number of models. The system knows how to work with machines: distribute tasks to them in electronic format, read information from them, "says Mark Samoilovich, head of Sage at Energy Consulting.

Energy Consulting, which also localized the system, remains Sage's only partner in developing Sage ERP X3 sales in Russia. According to Christoph Letelier, his company has not yet decided to open an office in Russia and at the current sales level does not yet need new partners.

The most successful markets for the company as of 2013 are the North American market, where Sage has been growing at a rate of more than 40% per year, as well as Africa, where the company's business has been growing at a rate of more than 50% over the past five years, says top manager Sage.

History

Sage was founded in 1981, and in 1989 the company's shares began to be traded on the London Stock Exchange.

2021: Purchase of 83% Brightpearl for $299 million

On December 20, 2021, the British Sage Group announced the acquisition of 83% of Brightpearl for $299 million and thereby brought to 100% its stake in this developer of the ERP system for retailers. It is planned to close the deal in January 2022. More details here.

2013: Sage prepares to storm global market

In February 2013, Sage Group, the largest software company in the UK, one of the top ten global developers of enterprise applications, intensified in the market for medium-sized business solutions. For these purposes, the Sage structure has a special unit, headed by Christophe Letellier, who until recently was the head of the Sage ERP X3 direction .

Obviously, this is another strategic step for Sage to strengthen its position in the global corporate software market . Active changes in the company's business began with the arrival of a new CEO Guy Berruyer a few years ago.

Sage achieved its current position in 30 years of work in the market, implementing a fairly consistent and unique regional expansion. Its strategy was to acquire software developers for medium and small businesses in different countries of the world, mainly occupying 1st or 2nd places in local markets.

After the purchase, Sage left behind a certain share of regional assets of independence in the development of products, rightly believing that local features are critical for small and medium-sized companies. For its part, Sage brought experience in building partner channels, development and marketing, which ultimately led to success.

For example, in 2012, Sage made three acquisitions in Brazil at once (Fohlmatic, EBS and Cenize), which overnight helped it take a strong position in the Brazilian business application market. In a similar way, Sage has established itself in the software markets for medium and small businesses (SMBs) of different countries on most continents.

In addition, Sage was engaged in the purchase of software products intended for medium-sized companies, especially noteworthy in this regard are the acquisitions of SalesLogix (USA) and ERP X3 (France). The last product was the first truly international solution of the company. When Berrier went on a promotion to the post of Sage CEO, he and his team relied on a global presence: global solutions are more viable, even if they are intended for SMBs, and global marketing also plays a crucial role, they believe.

Thus, in particular, the SaaS Sage One solution, originally developed for small British companies, became available in the United States and Europe in the form of localized services, but based on a single platform. There are other signs of Sage business globalization. So, in South Africa, for a long time, the local Sage division continued to operate under the historical name Softline (at one time the company of the same name was acquired here), but recently rebranding was carried out and it was named Sage.

In addition, Sage announced the creation of a technology council, which, in addition to the main top managers of the company, including the CEO, technical director and marketing director, included technology directors of the well-known companies in the IT market Electronic Arts, AOL and Expedia. According to PAC analysts, this indicates Sage's significant efforts in working on its own product line.

2012: Movement to Eastern Europe

In 2012, Sage intensified in the Eastern European market: with the help of partners from Deveho, the vendor intends to significantly advance the Sage ERP X3 in the middle price segment, however, according to analysts, the struggle for the local market will not be easy.

In January 2012, the Sage Group and the consulting company Deveho signed a partnership agreement, according to which the latter will localize the Sage ERP X3. Deveho Consulting joined the Global Partner Program, which allowed Sage to enter the markets of four countries in the second quarter of 2012: Romania, Slovakia, Hungary and the Czech Republic. Following Sage ERP X3 was introduced in Russia.

In the context of the negative trend recorded by analysts for the ERP of the Romanian market from 2008 to the present, the announcement of the entry of the Sage ERP X3 into the local market was quite unexpected.

Deveho has set itself the goal of becoming a key integrator of Sage ERP in the middle price segment of the market throughout Eastern Europe, with the company considering Romania as the most promising market in the region.

After localizing the system, both language and legislative and tax, Deveho and Sage will have to face quite serious competition in the person of both global ERP suppliers (SAP, Oracle and Microsoft) and smaller international and local developers.

According to PAC estimates, the Romanian market for ERP systems for medium and small businesses is 15 million euros. However, in the next few years, Deveho plans to officially open local offices in Bratislava (Slovakia), then in Budapest (Hungary) and Prague (Czech Republic). In addition, Deveho already has the implementation of Sage ERP X3 in the markets of these countries and the company has already begun to localize the system for all of them.

If Deveho's strategy justifies itself, Sage, originally a British company, will have much more motivation to invest in the Eastern European market, while in this region Sage's position is strongest only in Poland, where a rather extensive product portfolio of this vendor is already represented.

According to PAC experts, while most vendors in the ERP systems for small companies rely on the provision of cloud services, Sage prefers to develop a traditional software delivery model, which is quite risky.

The Sage ERP X3 system is positioned as a system for medium and large enterprises, with a number of employees from 50 to 2500 people who need to automate not only local, but also international operations. At this time, the number of customers of the system is 3.3 thousand, the number of users - 165 thousand in 50 countries of the world.

Sage's partner in Russia and the CIS countries is the Energy Consulting Group of Companies (according to Expert RA, Energy Consulting is one of the TOP-10 largest audit and consulting groups in Russia).