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ENTERPRISE RESOURCE PLANNING SOFTWARE INDUSTRY BUZZ  


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ERP SOFTWARE INDUSTRY BUZZ

crmSage On The ERP Channel Defensive

Facing a combination of value added reseller (VAR) company failures and partner defections, UK-based Sage has found itself implementing a defensive strategy designed to keep its VAR channel from further eroding. While several Sage VAR's have failed to weather the difficult economic climate, the Sage business partner channel was shocked when earlier this month top VAR MIS Group in Dallas, Texas, seemingly deep in debt and negative cash-flow, closed its doors with little warning.

According to Sage, the MIS Group was highly leveraged, had made a number of acquisitions and was operating a capital-intensive business that included software and hardware. Sage indicated it had been aware for some time that MIS Group was struggling and had been working with the partner to help with its cash flow problems. However, the MIS Group ceased operations on Monday, July 6, and Sage indicated it became informed only the evening before.

The business failures of MIS Group and other Sage VARs have raised questions about the financial health of Sage's business partner channel and sparked competition from rivals Microsoft and on-demand ERP software provider NetSuite. Microsoft has implemented VAR recruiting campaigns for those existing Sage VARs who are according to Microsoft "concerned with the stability of the Sage Software Inc. channel." NetSuite's recruiting campaign is focused on getting the Sage VARs out of the stagnant on-premise accounting and ERP software market place and into the high growth accounting software as a service (SaaS) market.

Today Sage responded by sending a letter to all VARs and business partners. Written by Paul Johnson, Executive Vice President of Sales, the letter acknowledges some of the turmoil. "In recent days, several of our competitors have used the business closure of one of our large partners to try and stir fear in the marketplace about the stability of the Sage partner channel ... As a Sage partner, you know as well as I do that our partner community is diverse, vibrant and strong."

As for the aftermath of the MIS Group, the partner had between 2,000 and 3,000 customers, most in Texas but also other clients in every US state and several countries abroad. According to Johnson, about one-third of those clients have already begun transitioning to other VARs and Sage is working to pair the remaining clients with other solution providers.

trackback Trackback: http://www.erp.asia/sagevars.asp
tags Tags: Sage
posted Posted: Sage
author By: Editor
date Date: July 27, 2009
comments Comments: email comments to buzz<at>erp.asia
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