By Sramana Mitra and guest author Siddharth Garg
Thought Leaders In Cloud Computing (TLCC) returns with an interview with Klaus-Michael Vogelberg, CTO of Sage Group Plc. Before diving in, readers new to the series may want to read more about its purpose and goals, which are set forth in Cloud Computing Trends And Opportunities
About Klaus-Michael Vogelberg
Klaus-Michael was R&D director and partner of the German KHK Software Group, acquired by Sage in 1997. In 2000, joined the Group team to assist Sage operating companies and the board on software architecture and technology strategy. Between 2004 and 2007, Klaus-Michael acted as R&D director for Sage UK and Ireland before taking up his current post of Group chief technology officer.
Sage Group Plc provides business software, services, and support to small and medium-sized businesses. Founded in 1981 in Newcastle upon Tyne in northeast England, the company has grown to become a major provider of business management software and services. It employs more than 13,400 people in a global operation that, in the year ended September 30, 2010, generated revenues of £1.435 million.
Traditionally, the company has been associated with accounting software, but over the past twenty years it has applied its experience here to other areas and now has a range of solutions to help businesses from front to back office. Functions addressed include accounting, payroll, customer relationship management (CRM), financial forecasting, payment processing, job costing, human resources, business intelligence, taxation and other products for accountants, business stationery, development platforms, e-business, and enterprise resource planning (ERP).
Sramana Mitra: Hi, Klaus-Michael. Welcome to the interview and to our TLCC series. For the benefit of readers, would you please give us a little background on Sage? In particular, where do you currently stand, where you are coming from, what is the customer base that you are catering to, and what is Sage’s business in general?
Klaus-Michael Vogelberg: We are a global business. We have grown in the main through acquisition of local market leaders and what we all had in common is that we were passionate about SMEs (small and medium enterprises), which is off course our very own cradle and background. Today, we serve 6.3 million customers’ businesses. We do that in some segments by working with about 28,000 business partners and 40,000 accountants. We take 36,000 customer calls per day in helping them to run their businesses, and we have about £1.4 billion in revenue. In North America, we serve 3.2 million SME customers through 5,000 business partners and 20,000 accountants.
The majority of our customers have fewer than 25 employees, and that is very important because it influences a great deal how we think and what approach we take; our approach is quite different from many other vendors in the market.
One of those differentiators is that we are much decentralized and we take a very local approach. To illustrate, a plumber might be doing similar thing in all countries, and maybe you as a customer or we as a customer may all think that the plumber charges us too much. But actually, the way he goes about his business is considerably different; the way he has to deal with local legislation and so forth is different. So, we think one of the best things to serve that community is business unit or business entity which is very close to that customer base. Hence, quite deliberately, ours rather is a centralized approach.
On the other hand, there are certain things that everyone operating within Sage Group has in common. There is a very strong focus on a trusted brand and passion for customer experience and customer support. So, we don’t see ourselves merely as software or as a technology provider to the SME community, but actually as a partner to help them make their business life easier.
Within Sage, I am responsible for technology strategy and technology adoption as a member of the executive committee. My background is in developing products, originally for the German and Swiss markets. I was a partner of an SME accounting software company, KHK Software Group, which we started in the early 1980s, which later became a leading business in Germany. In the late 1990s [it became a part] of Sage. My professional background is in accounting and software development.
SM: Sage is present in different regions, and you have put these together in part with many different acquisitions that have also been in different regions or countries. How many countries are you in?
KMV: Roughly 24 or 25. We have pretty large footprints in the U.S., Canada, France, the UK, Ireland, Spain, and Germany. We have big operations in South Africa and smaller operations in countries such as Portugal. We have big operations in Poland as well. So, we have pretty strong foothold in those markets, but unfortunately not in all markets yet. For instance, we don’t yet have a strong foothold in India or in China.