This week Sage Group announced that it has agreed to acquire Intacct Corporation – a 19-year-old cloud ERP vendor – for about $850 million.  This is the largest acquisition Sage has ever made and their third acquisition this year.

What prompted Sage to make this move?

Sage has been lagging behind the competition in moving to the cloud and generating a recurring revenue stream – which Wall Street loves.  Sage has also had difficulty in gaining mid-market cloud installs.  Analysist have said this acquisition was a necessary, but expensive way to address these issues.

Before the acquisition, Sage had three cloud products that are the focus of Sage’s new “Cloud First” policy:  Sage One (for very small businesses), Sage Live (for growing, but still small businesses), and Sage X3 (for larger enterprises).  Sage Intacct (as it will be called assuming the deal is finalized) will try to fit in-between Sage Live and Sage X3 and provide some needed North American cloud clients that Sage is desperately trying to add.  Intacct is primarily for US GAAP accounting, which could be an issue for companies with multinational needs.

Impact on Intacct

Acquisitions always create uncertainty, as the recent NetSuite acquisition showed, and this purchase is no different.  Certainly, Sage wasn’t just paying for Intacct’s customers, but also their technology and people as well.  But $850 million is a big price tag and Sage will have to find some efficiencies to keep shareholders happy.  Anyone familiar with Sage will know that they don’t have the best reputation for investing in technology.  Will the ability and desire to innovate Sage Intacct be diminished?  Will the pressure to increase dividends and show a return on this investment take precedence over innovation?  If you are considering a new ERP package are you willing to take that risk with Sage Intacct?

Impact on Sage 100 (MAS 90)

This acquisition by Sage has been big news this week and I have combed through dozens of articles discussing the details of the transaction and the impact it will have on Sage’s product strategy.  There have been plenty of mentions of Sage One, Sage Live and Sage X3.  But, I haven’t seen any mentions of Sage 100 (formerly known as MAS 90).

Are you still using Sage 100?  If so, why?

The product has been around for decades and has plenty of accounting functions – that can’t be denied.  As a former reseller of Sage 100 I know what it can do.  I also know what it can’t do.  The technology has always been behind the competition, even other legacy ERP packages like Dynamics SL.   It was my experience as a partner of Sage that improving the technology was secondary to getting new clients.  Sage continues to provide a roadmap for the Sage 100 product and is still updating modules to the “new business” framework – something they started around 2005, but you must wonder where does Sage 100 fit in the priorities now that Sage Intacct is in the family.

How does Sage 100 fit into the “Cloud First” priority?  How many accounting packages can Sage support?  How long does Sage want to support Sage 100?  How many partners have stopped supporting Sage 100 and moved to a different package and how would that impact you?

Acumatica

I was one of those partners that dropped Sage 100 and added Acumatica.  It wasn’t an easy decision, but in the long run, it looks like the right one.  Acumatica has recently announced a Sage 100 migration tool.  Acumatica is built on the latest technology and continues to innovate and Acumatica is a true global product.  Now seems like the perfect time to review Acumatica if you are looking for a new ERP package or if you are still using Sage 100.