Sage Software – A Guide to the Product Portfolio

by

Chief Operating Officer,

By market share, SAP is the largest business applications software vendor. Oracle is number two. You probably knew that. Do you know the third largest applications vendor?

Sage, with 8% market share, is the third largest business applications software vendor. And in the SMB segment (companies with fewer than 500 employees), it's the largest. Sage is a $1 billion plus company whose software products power hundreds of thousands of organizations' mission-critical functions. However, given the evolution of this highly acquisitive company, its product portfolio and corporate background might merit some explaining. We'll give it a try.

Sage Market Share

Sage was founded by David Goldman in 1981 in Newcastle Upon Tyne, England, and first sold estimating and accounting software for the printing industry. Like its competitors, the company grew dramatically and primarily through acquisitions. Sage focused mostly on the U.K. market until it entered the North American market in 1991 via the acquisition of DacEasy accounting software. Since then, the company has acquired over 100 software systems. Some of these acquisitions have helped the company penetrate new geographic markets or narrow verticals, while some of the acquired products have been more broad.

Sage's more notable North American acquisitions are presented below:

YEARCOMPANYPRODUCTMARKETAMOUNT
1991DacEasyDacEasyMid-market accounting software$15M
1998State of the ArtMAS 90/200Mid-market accounting software$263M
1999Peachtree SoftwarePeachtreeSmall business accounting software$145M
2000Best SoftwareAbra/FASHuman Resources Management Systems (HRMS) and fixed asset accounting software$445M
2001Interact CommerceACT!, SalesLogixCustomer Relationship Management (CRM) software$260M
2003Timberline SoftwareTimberline OfficeConstruction accounting and operations$93M
2004Accpac InternationalAccpac, Simply AccountingSmall business and mid-market accounting software$110M
2006Emdeon Practice ServicesMedical Manager, IntergyPhysician practice management and Electronic Health Records (EHR) software$565M

As a result of Sage's numerous acquisitions, the company has several products targeting each industry and some products cutting across multiple industries. A quick overview of the SMB offerings in their biggest industries is presented below.
Sage Products

Of course, Sage has a number of other products that are used by small companies in a variety of industries – Peachtree, Simply Accounting, SageCRM, ACT!, SalesLogix, etc. For the scope of this article, we will focus on clarifying Sage's ERP offerings in the manufacturing and distribution software industries. MAS 90/200/500, X3, Pro, and PFW are the most prevalent, so let's take a look at each in detail.

MAS: One Size Fits Most
As can be seen in the diagram above, MAS a popular system that Sage markets to a lot of buyers. State of the Art, Inc. first developed MAS (Master Accounting Series) in the 1980's and staked its claim in the SMB market by building out a large reseller network. Many of these resellers included CPAs who used the program and even resold it to their clients. Although many CPAs stopped reselling the system as conflicts of interest occurred, this scenario proved effective in getting MAS installed in more than 70,000 locations. Sage eventually acquired State of the Art in 1998, giving the British company a strategic position in the North American SMB market.

Out of the box, MAS is a horizontal accounting and inventory management solution. Industry-specific functionality is usually found in the over 20 add-on modules that Sage offers, including HR, CRM, e-commerce, and payroll. While it is a strong fit for wholesale distributors, manufacturers will find necessary manufacturing software modules (MRP, shop floor control, etc.) available through Sage's extensive network of development and sales partners. MAS is usually adequate for light manufacturers, but manufacturers requiring more specific functionality will often look at Sage Pro, X3, or PFW.

Differences Between Sage MAS 90, MAS 200, and MAS 500
MAS 90 and MAS 200 offer essentially the same functionality; the primary difference is in how the system is delivered. MAS 90 is built on a Windows platform and is usually run on a single terminal or a small Windows network. Because of its b-tree file architecture, it is typically not used by organizations with more than 10 users.

MAS 200, however, is database-driven and later this year will be able to be deployed on an SQL Server. It also employs a client-server architecture. Because of this infrastructure, MAS 200 is more scalable and usually used by larger companies. MAS 500 is an entirely different beast from MAS 90 and 200. It was built from the ground up and does not share the same code base as the others. It is usually used by larger companies, although it can scale down to as few as 50 users (and even 2 in some cases).

The table below should help companies identify which MAS product might be best for them. This information is based on our research and is not official data from Sage.

Annual Revenue# of Employees# of UsersTechnology
MAS 90$1M to $25M10 to 100Less than 10Windows Terminal
MAS 200
$10M to $100M10 to 50010 to 250Windows Server
MAS 500
$25M to $500M+20 to 1,000+50 to 1,000+SQL

The "Hardcore" Manufacturing ERPs: X3, Pro, and PFW
While X3 and Sage Pro are smaller brands than MAS 90/200/500, they offer more robust manufacturing-specific functionality out of the box. Sage acquired X3 in 2005 from a French company called Adonix and, similar to Microsoft's marketing strategy with Navision Damgaard, began offering the system in the United States. Sage X3 supports just about any manufacturer with specific features for discrete, process, make-to-order, and engineer-to-order modes of manufacturing. The web-native application is especially well-suited for international companies that need to integrate multiple locations with multi-language and multi-currency support. It is typically used by "upper-mid" SMBs with 20 to 1,000 users.

Sage Pro is a very different product from X3. It was originally part of the Accpac family of products (consisting mainly of Accpac, Accpac Pro, and Business Vision) that Sage acquired in 2004. The biggest differentiator for Sage Pro is the fact that its source code is open to end users, allowing companies to modify the source code to fit their needs. It usually requires very little customization for small companies though and is easy to integrate with other modules for warehouse management, e-commerce, HR, and CRM. It is designed primarily for small and mid-size discrete manufacturers.

Sage PFW was initially offered as BatchMaster Platinum for Windows. It is a process-specific system with features for batch tracking, formulas, inventory control, and distribution, in addition to core accounting and job costing. It was originally developed by a company called eWorkplace Solutions in the 1980s was sold to Sage in 2002.

A quick breakdown of the different Sage ERP products is presented below.

MAS 90/200/500The most popular of Sage's ERP products
DemoHorizontal support for many different industries, not just manufacturing or distribution
Scalable from small companies to enterprises
Wide availability of add-on modules for industry-specific needs
Huge network of resellers and development partners
Sage X3Out-of-the box functionality for most modes of manufacturing
DemoGreat for global, multi-language and multi-currency companies
Highly configurable platform can operate in Windows, Linux, or Unix, with Oracle or Microsoft SQL Server databases
Web-native and easily accessed from multiple locations
Sage ProOpen source system
DemoGood for smaller companies
Typically ready to deploy without customization
Popular among discrete manufacturers
Sage PFWProcess-specific system supports both manufacturers and distributors
DemoWell-suited to small and midsize firms
Multi-language and currency support for global operations
Powerful reporting and backoffice management with built-in reports and add-on modules

So What Does the Future Hold for Sage ERP?
Buyers should expect these systems to stick around for quite some time as Sage has released product road maps that extend beyond 2012 for all four products. Based on Sage's past acquisitions, we think it's reasonable to assume that Sage will be introducing additional products to the manufacturing and distribution software industries. Sage's largest opportunity may lie in Software-as-a-Service (SaaS). While the company does offer SaaS systems for customer relationship management, light manufacturing, project management, and other functions, it does not yet offer a complete, SaaS system for complex manufacturers. Maybe we'll see one soon.

 
  • http://www.google.com/profiles/wayne.schulz wayne Schulz

    Nice summary though I think a bit inaccurate on the MAS90/200 side in terms of technology and the # of users (MAS90 easily goes above 10 – that # is an old marketing fairy tale).

    I’m impressed that you seem to have hit the original installed base numbers for MAS 90 pretty closely (at least as far as I’ve heard before).

    I think you need more work on the Accpac side of this chart though. Sage recently announced that Accpac and ERP X3 are the two global brands. Therefore I think Accpac probably deserves some consideration.

    Sage also has an Extended Enterprise Solution which combines ERP + CRM + Assets. Those probably deserve mention and consideration especially since they’re lower cost both in terms of initial purchase and ongoing maintenance.

  • http://www.dsdinc.com Doug Deane

    This is a nice snapshot of Sage’s offerings and a look back at how it evolved. I agree with all of Wayne’s comments. Although Accpac ERP’s market share in the U.S. is dwarfed by Sage’s other ERP products, it’s on the rise.

    Accpac is an excellent light manufacturing product with the addition of MISys and its architecture is more robust than the MAS products. It will shortly be released in a .net version, and it most certainly will be deployed in the cloud.

    As you noted, MAS90 got its start on the shoulders of CPA recommenders, but lost that edge when the MAS90 Client Write-Up module was discontinued. Sage is pushing ward to win back their loyalty, and I believe that they’ll be able to regain some of that lost ground.

    Nice article!

  • http://www.coatesassociates.com Doug Coates

    Fabulous article packed full of good information. This is one of the better presentations about what Sage Pro is that I’ve seen. But I am stymied as to why so little info was given about Sage Accpac, where this product is reportedly the key product that Sage will move forward with.

    • Guest Blogger

      Hi Doug,

      Thanks for your feedback. We will be updating this article with more information on Sage Accpac. I’ll send you a quick email when it’s finished. In the meantime, feel free to share any notes on Sage Accpac.

      Thanks,
      Houston

  • CRM Ninja

    Doug,

    Was this piece to be solely focused on the larger ERP offerings from Sage? I’d be curious to hear about the Act!/SageCRM/Saleslogix platforms as well as some of their other offerings (BusinessWorks, Payment Services, etc.). At least, I’d be interested in hearing your thoughts.
    I agree with the earlier post about AccPac. I’ve supported both applications and they are definitely equals. It’s just a situation where one dominates Canada and the other NA.

    Sage is a very interesting Case Study given the diversity of the applications they offer, their market share and some of the unique questions they present. I hope to see more on this subject.

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