Best rebrands as Sage, launches hosted CRM service

Five years after it bought midmarket business applications vendor Best Software, U.K. software maker The Sage Group is finally bringing Best in line with its corporate branding and changing Best's name to Sage Software -- just as the newly renamed vendor revamps its portfolio to compete more aggressively.

At its user conference last week, Sage Software launched SageCRM.com, a rebranded version of the Accpac accounting and sales software Sage bought in late 2003 from Computer Associates. The new SageCRM.com service takes the company into the hosted CRM (customer relationship management) market currently dominated by Salesforce.com.

The move completes a repositioning Sage Software began last year, when it drafted a strategy to address all ends of the CRM market among small and midsize businesses. Cobbled together through acquisitions, Sage's portfolio includes the Act contact management software popular with individuals and very small businesses, as well as SalesLogix, a full-featured CRM system aimed at larger organizations with up to several hundred employees.

Sage is positioning Sage CRM (formerly Accpac) in the middle of that range, pitching it toward companies ready to move beyond contact management but not ready yet for the expense and complexity of a SalesLogix deployment. The software is available in a traditional on-premise version priced at $595 per user, or as a hosted service for $69 per user, per month.

Sage is the latest CRM vendor to jump into the hosted-service market in the wake of Salesforce.com, which cannonballed into the market in 2001, ringing up sales of $176 million last year. Sage is still in good financial shape -- its North American operations brought in profit of £62.3 million ($113.8 million) last year on revenue of £287 million -- but, like many CRM vendors, it has struggled to grow. Revenue from SalesLogix dropped from £20.3 million in 2003 to £17.9 million in 2004.

Vendors know they ignore Salesforce.com at their own risk, so Sage is aggressively targeting Salesforce.com's base market of smaller, price-sensitive customers. SageCRM.com comes with a "rent-to-buy" option: Sage will apply up to half a year's worth of subscription fees toward the licensing price of its on-premise software, either Sage CRM or SalesLogix, for customers that choose to migrate from the hosted service.

Sage would also like to take a few trophy scalps: It's offering its reseller partners 100% of the first-year contract value on the first customer they can convert from Salesforce.com to SageCRM.com.

The partner channel is where analysts say Sage could find its competitive advantage. Salesforce.com does almost all of its sales directly -- an anomaly in the midmarket applications business, where customers frequently rely on local systems integrators. On the other hand, Sage has a network of 3,500 active channel partners, several hundred of which are already certified on SageCRM.

"Everyone wants the SalesLogix channel," says Yankee Group analyst Sheryl Kingstone.

The IDG News Service is a Network World affiliate.