What’s the difference between Sage and an ostrich?

@Duanejackson’s excellent blog today highlights the amazing comments by the CEO of Sage about SAAS. He quotes:

“As Sage put out their results yesterday, their CEO said:

“Well, many of the people who’ve launched SaaS products in the last four/five years and that industry analysts get very excited about, even though most of them have got less than 5,000 customers, is that what those solutions are is actually desktop solutions online…..”

We shouldn’t really be surprised at this head in the sand attitude. A few years ago I had fairly detailed talks with Sage about them buying Easycounting as a way to enter the, then, nascent SAAS market. The talks were somewhat complicated by Sage executives leaving the company as soon as we had met with them but eventually we got to meet the Sage technical director.

He quickly killed the idea as he was unable to see why there should be any demand for online accounting. This forward looking attitude is no doubt healthy for the director of a FT 100 company – but, hey, Sage is an FT 100 company so what do I know.

I will leave the Sage bashing to Duane and @DAHowlett – after all they are much better at it than I. However it is interesting to speculate why Sage have such a blinkered view of the Cloud.

There is one reason, of course. One of the major characteristics of the SAAS model is that prices are based on per entity costs with no ongoing licence, upgrade and support fees – all of which Sage charge at exorbitant rates.

The current SAAS model just doesn’t work for them and until they can find a way of monetizing it and competing in the Cloud market place, they will stay away from it.

Of course, the problem with sticking your head in the sand is that you have an exposed backside….I think there will be a long queue to be the first to kick it!

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