Sage offers flexible, integrated and scalable solutions for organizations ranging from start-ups to scale-ups, to mid-sized and larger enterprises. Keith Fenner, Vice President Sage Enterprise Africa and Middle East discusses the company’s cloud first focus and partner enablement
Discuss the cloud focus at Sage
It is definitely cloud first strategy for us. Having said that, wholesale transition to cloud is not a possibility and our customers aren’t interested in that anyway. We are focused in three market segments on three cloud products. The enterprise product will always be available as on premise version as well as a multi-tenancy cloud product. Then there is the enterprise cloud which would be the private cloud product for customers who have their own development environments, test environments.
The interesting thing Our R&D roadmap for Sage X3 delivers to cloud first in iterative updates. Every week, every 2 weeks, every month, the cloud is being updated as you can imagine; it is elastic R&D. Every 6 months to 12 months, we collect all of those updates and create an on-premises patch. So this is an instance of cloud first focus.
While our focus is the cloud for the future, we know that our customers are going to move to the cloud at their own pace. Which is why we still offer on-premises options, in the enterprise space.
What is the feedback from customers on cloud adoption?
Every customer conversation we are having in the region now involves cloud, whether they are transacting cloud or not. They typically are keen to know about Sage’s cloud strategy, when they could take cloud on, whether they can come off cloud if they don’t like it and what is our strategy towards data in the region with legislative requirements. Our strategy is to deliver to the UAE and Saudi data centers for now which covers large part of the region. In short, our cloud is strategy is quite focused and we are offering a choice that other vendors aren’t. However, at the moment, most transactions are still with on-premises editions.
How will the cloud delivery model unfold and how does the channel benefit?
We have an agreement with a provider that runs the datacenter in UAE and Saudi Arabia and are in process of authentication and certification of the data centers. Within the cloud model, the contract is between us and the customer. We have worked towards the model wherein Sage is the contractor where it is our responsibility for the data center, obviously on a back to back agreement. As our business model is via the channel, we are protecting the partner who still has the margins and does the services. While it does take some consulting time off for the partners with the software being preloaded on the cloud, we hand it to the partners for all further services.
How has the public cloud model worked until now for Sage in the region? What options do you offer to customers?
Prior to now, customers in the region have had the choice of running our X3 cloud from Amazon AWS. But there have concerns about need for data to reside in local data centers with reference to local legislative requirements in some countries. We have to be vigilant on that and deliver solution to address the challenges. There have also been issues of latency in some countries as well.
If customers are comfortable of running the solution in the public cloud, they can do it. We also offer the private cloud options for customers who want customization and then there is the local hosting option to round off.
How are you enabling partners in the cloud Business?
We have been explaining to partners the importance of moving to a cloud based services model from the traditional way of Business. We have our ways of enabling partners towards the cloud model. All partners, technically, can sell both cloud and on premises options. However, there is a difference in just flaunting a cloud logo and in being actively involved in driving the digital transformation towards the cloud in the market place. We are committed to this education towards helping them make this transformation. We have some great business incentives to encourage the transition. And I would reiterate the point that we are a channel focused company and in the cloud model, while we are the contractor, the channel is the services element behind the contract.
Discuss the customer preference for private cloud deployment?
Customers running for critical environments tend to prefer private cloud options. For ERP covering big sites with a lot of integrations and significant customization, where our customers are stepping out of Sage X3 best practice processes and are building their own best practices or changing them a bit, they probably have a large IT team and will want to control their upgrade path, have a sandbox up in the cloud, have their test and development services etc. That is a different world altogether and they are quite comfortable with the private cloud which offer them better security, backup as well as DR options etc.
How do you see yourself across the different customer segments? What is the emphasis on the enterprise part?
We have three distinct segments for our products- start-up, scale-up and enterprise. Sage 50 which is Peachtree is for start-ups. We have four versions which are Sage 50 US, Sage 50 UK, Sage 50 Canada and Sage 50 Middle East. The strategy is to get every customer in the region to get on to the Sage-Middle East version which does transactions upto 3 decimal places. That is a process which will take time as it involves a huge number of customers. The change would be the introduction of the cloud based start-up product Sage One in the region when we do it. We have some work ahead of that including Arabisation and we would like to hit the road to the market hard when we have it ready and look at offering a difference.
In the scale up segment, Sage 300 is growing in the region, has a lot of partners transacting. The cloud version is Sage live. In fact, for long, the scale up and the start-up segments have been the traditional strongholds for Sage and we have been regarded as a mid-market player.
The focus now with the roadshows we have been doing is to build up the brand in the enterprise segment. We want to become regarded as an enterprise player along with the names that have been traditionally considered as enterprise players. Our brand awareness needs to be enhanced on the enterprise side but having said that, we have been closing some great enterprise deals in the region. In Africa, we are pretty strong on the enterprise and we will look to replicate that here.
Discuss outlook for growth and the partner focus?
We grew our business globally by 74% last year and partners are a key part of our growth focus. In the cloud model, while Sage is the contractor ultimately, in services the channel is involved. While we don’t have a post sales team but we do run a quality team that will check the integrity and sign off the project milestones, which gives the assurance to customers. We have some very larger partners that are making sizeable investments in growing the business. We have around 25 consultants that are responsible for consultation, implementation, BPR, change management etc.