TechnologyAccounting SoftwareSage to focus on industry-specific packages

Sage to focus on industry-specific packages

More industry-specific packages and customers replacing software will be the twin engines of growth for accounting software giant Sage, according to its chief executive Paul Walker.

Link: Sage continues acquisitions

Sage plans to offer more industry-specific software, and will also build small amounts of industry-specific software into its mainstream products. ‘We are building on that in all of our markets,’ Walker said.

‘The mid-market – 50-500 employees – isn’t a horizontal market at all, it’s a set of vertical markets,’ he said in an exclusive interview with VNU News Centre.

‘With a large customer base of three million we think that providing more industry-specific functionality is right for customers and part of the growth strategy.’

Sage is also developing an integrated platform that will enable customers to share information across Sage software applications, such as accounting, payroll, cash flow and salesforce automation software.

It will replace the need for each software application to be separately linked to the next by providing a central integration point.

The integrated platform is in an advanced stage of development and is expected to be available towards the end of 2003.

Walker also said the replacement market – where companies decide it is time to replace their software rather than upgrade to the latest versions – will be increasingly important.

‘In a good economic climate there’s a replacement market where companies will replace their software every four or five years. At the moment it’s out to six or seven years.

‘That market will be an important part of our growth because we have a strong entry and mid-market position and know our customers. We are in a strong position to make sure that when they replace software it is with our next product up the scale.’

He added the company wants to remain strong in the entry-level market: ‘In the 0-25 employees market we get 180,000 customers each year who are buying software for the first time. Our position is that we will continue to do well in the entry level.’

And Walker feels that despite the dire current state of the industry the future could be rosy: ‘In an upturn where the renewal market is more active you could see could see software companies like Sage move back into double digit organic growth,’ he said.

There has also been some debate about whether Sage will remain in the FTSE 100, but Walker isn’t concerned. ‘It isn’t something that occupies too much of my time,’ he said.

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