Now that I've had a day to decompress, I try to make sense of what I learned about the present and future of SalesLogix, SageCRM, and ACT.
Jim Foster, executive vice-president of Sage's mid-market software unit, opened a keynote that was way longer than it needed to be (I'm guessing it wasn't very rehearsed, particularly not live by the three presenters all at once.)
Foster led off with a meandering anecdote to explain why he was delivering the keynote at all. He told a tale of a friend who for the past 7 years has been unavailable for golf or lunch because of the neverending pressures of his job, since "buffalo chips roll downhill." As the story went on with the same refrain and constant, crushing disappointment, I swear that I thought Foster was going to tell us that his friend finally made a lunch date with him, then dropped dead of a massive coronary, his life having been reduced to nothing but the soulless service of a ruthless, merciless captalist machine and that in his grief he decided there was nothing else he could do but deliver a keynote speech. (Fortunately for Jim and his friend, that wasn't the case—he simply had to give the speech because unit GM Jon Van Duyne resigned last month and Foster learned that "buffalo chips actually roll uphill.")
To hear him tell it, SalesLogix's numbers are good. More resellers closed more deals for more seats than before, and he claims the company has even nabbed over 20 Siebel replacements. Much of his presentation, however, focused on the re-relaunched SageCRM product. I looked up my notes from Insights 2004 and noticed that the company boasted that it could win 70% of deals against Salesforce.com with ACCPAC CRM. In reality, they're still trying to hit that mark, and the company acknowledged that it took more time and energy to build up a proper on-demand business model than they had originally anticipated. (Anybody who watched Interact.com crash and burn under pre-Sage management could have told them that...) In particular, Sage built a new data center to handle the load of what it expects will be a big market availing itself of free trials and a highly aggressive $1000 package that provides 5 users with a year's worth of service.
Don't mistake this relaunch for any sort of capitulation out of the packaged software market for Sage. In fact, one of the new wrinkles this year is that instead of simply promoting that SageCRM/ACCPAC CRM can be delivered as either a hosted or an on-premise product, Sage is now aggressively encouraging the transition by offering "rent to own" credits of 50% of the first-year hosting fee if companies decide to buy the server and bring the application in-house. In effect, Sage is counting on companies taking a look at the constant payment stream of the on-demand application and deciding to take a relatively painless bailout to bring it in-house. I'm intrigued to see how that plays out.
When Anthony Wooten, vice president of product management for SalesLogix took over, I had the sinking feeling I was going to see the silly 3-tiered cube the company's been using for a year to explain the SalesLogix/SageCRM/ACT positioning. I was, unfortunately, right. We will soon need extradimensional sensory organs to pick up all the axes Sage tries to label on that diagram. Even if I'd taken a picture of it, I wouldn't show it to you.
Fortunately, he eventually moved on to present the product roadmaps for SalesLogix and SageCRM. SalesLogix should benefit from a new dashboard and better marketing capabilities by year's end (version 6.5), with next year's 7.0 release finally eliminating the stand-alone customer support client. The company also says it is relaunching its web client with four to five times better performance in the new "Tarantula" architecture. SageCRM will also get better reporting and marketing, with a self-service Web client expected in the V7 release down the road.
Bob Neeser, the head of midmarket CRM sales, took over as the keynote was already just about overtime and quickly made his pitch to the resellers in attendance. Much of the thrust was on massive commissions for SageCRM in general, and in particular deals that take away Salesforce.com market share. He did slip in one interesting comment which was a strong reminder that I was at a reseller event, not some stilted media/analyst seminar. Neeser brought up a figure expressing that Sage/ACCPAC CRM in particular tended to have a one-to-one ratio of service revenue to license revenue. But he was quick to point out that Sage expects that ratio to increase.
...for those of you missing the impact of that statement, keep in mind that for years now, the heavy thinkers in the industry have been calling for (and, generally, getting) a reduction in the services/license ratio, reflecting competitive pressures as well as the presence of more and more out-of-the-box functionality. Particularly since, as an on-demand solution, it has to work "out of the box," or rather when the first user browses to the system, Sage was understandably concerned that its resellers might not be very aggressive in getting the word out to the marketplace (true to their 100% indirect sales model, they're bringing a channel partner into every SageCRM deal.) So for Neeser to directly call for an increase in services revenue... well, let's just say it's not the sort of thing I expect CRM execs to say.
I teased Bob about that at the press/analyst lunch, particularly since he was sitting next to me. He explained that what he meant what that he expects SageCRM will be flexible yet powerful enough to encourage clients to work with partners to achieve a very tight fit with their business. And he does have a good point, and I'm not a communist—I know full well that everyone in the business wants more services revenue, they haven't been giving it away so that they can get into heaven. But, still. I'm so accustomed to CRM developer execs trying so hard to tell me exactly what they think I want them to say that the net effect was charmingly unguarded.
Foster and Neeser did a lot of talking about how they wanted to make their partners better CRM sellers, but virtually nothing about making them better CRM consultants. Foster answered that later when he pointed out that Sage is launching sales consultancy training in September.
I've mentioned that much of Insights 2005 felt and sounded like Insights 2004. (Right down to the change of venue... it was the same resort chain in a different state, so even though the themes and the names were different, the layout was exactly the same!)
One notable exception to the sameness was the ACT crowd, who last year had a vibrant subculture (their show badges even had a unique ACT insignia, different than all of the other product lines) and a lot of beaming smiles on their faces. This year... not so much. I wrote up exactly why in CRM Magazine last year, check it out if you missed it.
The bottom line is that ACT got retooled for the .Net architecture Sage decided to embrace after buying Timberline (more on this in Part 3 of my Insights coverage) and in so doing it became a bit of a sacrificial lamb for the company and for the nascent field of packaged .Net applications in general. The abysmal startup times are largely attributable to the cost of starting up the .Net virtual machine—something that's been holding back many Java applications from widespread marketability for a long time as well. Of course, that doesn't explain why they took away various chunks of functionality...
In the face of this adversity, somebody must have told Joe Bergara, Sage's contact manager business GM, "If you think the crowd's going to be upset with you, open your keynote with a story about your little kid. That'll disarm the rabble."
So he did.
"Tell them your kid thinks you work really hard," this advisor likely went on to say.
So he did that too.
Once the preliminary disarmament was out of the way, Bergara went on to talk about a new partner advisory board for ACT, made some remarks about new R&D processes, and some upcoming milestones. Most notably, ACT Premium for Web launches next month, with ACT 2006 going into beta in July. One interesting tangible positive is that to quiet the add-on developers (some of the harshest critics of last year's release), Sage is cutting in half the cost of its add-on partner program. Although many of the functional elements that were once addressed by plugins are either in the product or on the roadmap, they seem serious about trying to keep the flow of outside innovation coming. A set of marketing initiatives with Visa/Mastercard and the Small Business Administration will get ACT products out in front of more users, but it's never seemed to me that market awareness was one of the product's problems. Time will tell...
Sage is looking for a new CRM boss, with Jon Van Duyne having departed to take over the US operations of CAS, a CPG marketing/CRM solution for CPG businesses. Now that there's no point waiting around anymore for the oft-open position of general manager of PeopleSoft's CRM business, I floated my name to Sage PR, but nothing came of it. Sniff.
I tease Sage about the name, and about aspiring to increase services-to-licenses revenue, but the fact is that it takes a certain amount of guts and laudable transparency to invite (and, indeed, underwrite!) me to sit in on something that isn't just a manufactured-for-the-press event.
In Part 3, I attempt to explain Sage's repeated insistence that it is working on cross-platform and "freedom of choice", while they migrate their products deliberately and meticulously tighter around Microsoft's technology stacks. Stay tuned...
None of the companies mentioned in this article have been clients of CRMuse LLC or Jason Compton for at least the past six months. Sage Software is underwriting the travel expenses for this journey.