Sage hits back at ‘bleaters’

Chief operating officer Paul Stobart this week told Accountancy Age the company had complained to European competition authorities as it was concerned Microsoft may put many traditional companies out of business.

Rival companies including ACCPAC and Pegasus, have recently suggested Sage was merely worried about Microsoft, and was being ‘hypocritical’ for registering a complaint against the near £1bn deal due to its failed attempt to acquire Pegasus several years ago.

However, Stobart said all companies should be aware of the dangers of Microsoft ‘bundling Navision products and squeezing down prices and creating a playing field in which nobody else can compete in’.

He said: ‘Some of our competitors have been missing the point. The smaller players in our market should be terrified by Microsoft’s aims.

‘As we have seen in the US since Microsoft acquired Great Plains, it has concentrated on bundling GP products with Explorer and squeezing out the small players. Post Navision, the UK market should watch out.

We are not worried by Microsoft’s arrival in our space. We welcome all competition as long as it is fair.

‘They (Microsoft) will struggle in the accountancy sector as they don’t understand the market like we and our traditional rivals do. Accountants are not likely to make switches on a whim.’

Over the last few weeks, Sage lawyers and managers including Stobart, have carried out a whistlestop tour, including reporting to the Danish and UK competition authorities and the EU.

The EU has since stated it was aware of real risks of anti-competitive issues, which could not be ignored. However, it added it would not be investigating the deal, a decision welcomed by Microsoft, but described as ‘bizarre’ by Sage.

The Newcastle-based company said it was disappointed by the decision but claimed a moral victory by raising awareness of the dangers to traditional companies.

‘The EU said it will monitor Microsoft’s activities. If anyone starts losing deals because of Microsoft bundling, they should report this to the authorities immediately,’ warned Stobart.

However, an official Microsoft statement said: ‘Navision and Microsoft are looking forward to competing based on the merits of our combined expertise to bring great products and services to market that meet the needs of small and midmarket customers around the world.

‘The business applications segment for small and mid-sized companies has great potential growth opportunity for many companies.

‘Microsoft’s investment in this space will help create new opportunity for software and IT services to bring high value offerings to customers and for our partners to deliver additional products and solutions to these small and midmarket customers.’

Stobart added that the current technology-based relationship between Sage and Microsoft has to change, and hinted at Sage moving away from its existing arrangements with Microsoft.

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