I’ve got some bad news for you, sunshine

For those not in the know, the title of this post was taken from “In the Flesh” – a song on Pink Floyd’s The Wall album. The Wall resonates heavily with themes of abandonment and isolation and relates the story of a protagonist who steadily builds up a wall to hide behind in response to the negative pressures in his life.

[Here's a link to the video for those interested: WARNING FOR LANGUAGE AND THEMES THAT MAY BE OFFENSIVE TO SOME. Please don't click if you are one of those folks that get offended at such things. In fact, no one should click on it. I'm asking you not to.]

I think the themes are appropriate as the next few articles are going to focus on the Sage Transformation journey.

What exactly is the “Sage Transformation” journey?

From what I can tell (and please understand that the following is just my opinion and is not endorsed, confirmed, approved or in any other way agreed upon by anyone at Sage), at its core, the Sage Transformation journey is a plan designed to help Sage respond to the rapidly changing landscape of software publishing.

It includes many different elements including re-branding, introduction of subscription pricing, re-organization efforts, direct sales, closer interaction with end user customers, improved cross-selling, connected services and many more. We’ll cover some of these topics in the coming days but for now, let’s keep our focus on the big picture.

To me, the big picture boils down to this: Sage isn’t going to lie down and fade away as the world changes around them.

They are taking steps to be more pro-active to ensure their survival and prosperity in the coming years.

That appeals to the competitive side of my nature. To me, Sage has always been rather conservative and slow-moving in responding to things.

For good, bad or ugly, they have shown that they are willing to move … and move fast.

Realize that I recommend CRM solutions for a living (Sage CRM naturally ), so to me this makes a lot of sense. Long standing organizations and even entire industries are slowly being marginalized as the efficiency and effectiveness of business over the Internet keeps changing the economic landscape. (For more on this, click here.)

If you aren’t responding … and responding fast, you are limiting your future.

The challenge for Sage is two-fold:

1. Sage has historically been a (mostly) pure channel sales and service driven organization.

2. Sage has historically grown through acquisition of products and their channel representatives.

This history of growth has resulted in a channel that – like most things in life – falls prey to the Pareto Principle. Simply put, this principle states that 20% of the channel accounts for 80% of the sales. Flipping that around, 80% of the channel accounts for very few sales.

If we really want to be harsh, we can assume Sturgeon’s Law is in effect. Sturgeon’s Law says that 90% of anything is crap.

So – what does an organization like Sage do to reconcile the existing channel with the desire to move aggressively to assert control over their fate?

The answer is complicated.

There are reasons that publishers have traditionally used channels and most of those reasons have to do with the fundamental economics of software publishing and the sales process.

Here’s the bad news, sunshine: the Internet has dramatically changed both the economics and the sales process.

We live in an era where customers can – and routinely do – gather their own research from vendors – white papers, case studies, videos, comparison sites, pricing matrixes, web sites, self-running demonstrations, you name it.

Does it still make sense for a channel partner to get the sale for a customer that signs up, swipes their credit card and starts using the application immediately? Probably not.

The part that is still in question is that last bit.

There aren’t too many businesses just yet that can start using an ERP or CRM system without some assistance.

Knowing this, Sage needs to move carefully to ensure that the channel remains mostly intact as they move forward.  Without the channel partners and the certified consultants available, the infrastructure collapses.

Imagine if every Toyota dealer disappeared over night. Or switched allegiances to Honda.

It wouldn’t be long before Toyota owners and future potential Toyota owners began to experience frustration and look elsewhere for their next car.

Bottom line: it’s a balancing act as we all move into the future.

What’s going to be important for both Sage and the channel partners?

Sage needs to communicate their needs more clearly and directly. Up to date, they have been communicating their message through a series of policy changes and strategic and tactical changes.

I don’t think that’s enough. And I don’t think that’s fair, reasonable or right with respect to the current channel partners.

There are thousands of partners – whether in the 80% or the 20% is irrelevant for this point – that have been loyal, dedicated Sage partners for decades. They deserve the truth and they deserve to be treated like the intelligent, loyal group of individuals that they are.

They may not appreciate the message – particularly the 80% – but they will understand it and it will end the unproductive what if games.

The most important point here (to me): they all deserve to be told the hard, cold facts and not to be slowly marginalized as Sage makes the necessary moves to re-invent itself.

I’m not suggesting that is the goal of Sage but it’s easy to see why many partners feel this way. So … let’s fix that please, Sage?

Now then … what’s important for the channel partners?

Partners need to realize what is going on here. It’s not an “us vs them” issue at hand.

I look around at the Sage channel policies and commissions and I compare them to other software vendors and guess what? The grass isn’t greener in the other pastures.

All the software publishers are making similar moves and setting similar policies (or even more demanding policies) for partners to continue receiving margins.

I would suggest that you sit down for a long weekend and evaluate where you are, where our industry is and where you want to be in three years. Five years. Ten years.

And then? Move forward. Execute. Create your future.

Re-ignite that entrepreneurial spirit that you had when you started your practice. Get hungry again.

Just as Sage has woken up and is moving, you have to do the same. If you don’t, you will be left behind, run over, marginalized, etc.

And if you haven’t taken the opportunity yet – take a look at the vehicles that are in place to help us transform our businesses:

• Sage Fast Track for Marketing is having a new enrollment period. I cannot recommend this enough for those in the channel that want to stay competitive. I will be writing more about that in the next few days.
• Sage Firm of the Future program has some upcoming classes. I promise you that if you attend one of these sessions and apply the principles, you will receive 3 – 5 times the attendance fees back within the first twelve months.
• 90 Minds / OASIS is a group of resellers that form a loose collaboration to share technical, marketing, sales, competitive information to improve the individual members’ situations and help ensure the customer satisfaction. Request to join today! (ignore the fact that it seems to be MAS 90 only)
• The LinkedIn Sage Partners group is an essential element for active partners to collaborate with like-minded individuals and share the good, bad and ugly. You may not like social networking. I “get it” but too bad. Unless you are checking out and retiring in the next year or two, you are putting yourself at a disadvantage by not joining this group.

In closing, unlike the protagonist in The Wall, I would suggest you have a much more positive path in front of you.

The future is what you make of it unless you sit back and let others define it for you.

Sage isn’t sitting back. What are you going to do?