Sage has finally launched an online version of Line 50. It will only be available for members of the Accountants Club for the time being. Paul Stobart, CEO Sage UK said:
“We are targeting this for accountants in practice. Over 200 firms expressed strong interest.”
Functionally, there is no difference between this and the on-premise version. David Terrar had this to say:
I’m delighted to hear Sage corroborating the concept of shared access to accounting systems, and the kind of benefits it can bring to collaboration between the SME/SMB customer and his/her accountant advisor. However, I’m completely under whelmed by the announcement. I’m prepared to listen, but it looks like it fits perfectly in to Phil Wainewright’s definition of SoSaaS – Same old Software, as a Service.
I’m inclined to agree with David’s assessment but I understand why Sage has taken this route. There’s a lot of Line 50 in the market and engineering an entirely new version when end user functionality is not changing represents a risk. However, this version has its own problems.
Paul was keen to stress this is not meant to be a SaaS offering, largely because it is run over Citrix rather than over the Internet. Even so, some will perceive it as a validation of the SaaS market.
Sage has taken the unusual step of directly controlling the hosting environment from data centres in Atlanta and Dublin. I’m not convinced this is the correct strategy because outsourcing would provide Sage with better opportunities for cost control. To counter this, Paul says the company wanted control over its environment as a comfort factor for customers and as a competitive advantage factor.
SLA uptime us pegged at 99%. This equates to unscheduled downtime of 3.65 days per annum. That’s not particularly ambitious.
Prior to speaking with Paul, I solicited opinions among regular readers and commenters. (Thanks people.) The main issue was price. This is how it works:
It is sold with a choice of three, five or 10 named users. Additional users can be purchased for £10 per month
It is single-company licence so the Accountant buys it for one client at a time.
For example,
For £75 – three people, whether from the accountant or client side can use the software at the same time.
For £95 – 5 people can use the software at the same time (three + two users @£10).
In my opinion, this is unlikely to work. The vast majority of Line 50 customers are single users so adding in the accountant only adds one more user. How will professionals justify the additional seat cost? Similarly, I can envisage many firms wising up to this and asking for an unlimited seat price at their end. They will wonder why they’re being asked to pay for access to each and every customer they have in their portfolios. It should come as no surprise that while Sage is anticipating break even in year one, it is not making any specific forecast on take up. whther it will be replacement or incremental business.
The API will be made available through the Sage developer programme but again, I can see developers thinking twice before committing development to the product until they see how it performs in the market place.
Another problem is technology choice. Paul is on record as saying he wants to get away from Microsoft technology, eventually taking tall Sage products to open standards. At present, that’s not possible because of the Microsoft infrastructure requirements for Citrix operations.
I struggle to square Sage’s technology decisions with what I know about the market and what Paul has said about trying to move away from reliance on Microsoft. I could understand if the company pointed to definitive research indicating demand expressed in the way it is going to market. But it doesn’t. I can only guess that past development investments were committed to Citrix and so rather than scrap, they continued. I believe that’s a tactical error. Similarly, the pricing model does not reflect market trends. One interpretation is they’ve pretty much doubled the price but added an extra user.
The company has an unquestioned dominant position and management is absolutely entitled to pursue strategy it believes is in the best interests of stake holders. My sense is they’ve missed a real opportunity and handed competitors a way to attack their market. The only way they can make this offering stick is to market the heck out of it which invariably sucks oxygen from the R&D machine. I’m not alone. Earlier this evening I met with a group of 30+ technologists and business advisors. Not one of them understands the rationale behind this offering in a world that is increasingly turning to services of one kind or another.
As an aside, Paul said the company is developing an entry level SaaS solution. I see this as a direct response to Winweb’s recent success. Paul would like to see this in the marketplace within 12 months though he quipped: “Having said that, no doubt we’ll end up late.”
UPDATE: plenty of debate going on over at AccountingWeb
Technorati Tags: SaaS, Sage, Sage Line 50, Twinfield, Winweb
