For the past 15 months, Joe Langner has been the executive vice president of mid-market solutions for Sage North America. He comes with an extensive management background which includes strategic planning, operational excellence, and profitable growth. In this interview he discusses mobile and social applications and Sage’s current position on the market regarding those applications.
Sramana Mitra: Hi, Joe, and welcome to the series. It would be helpful to give our readers some context about Sage. Then we will dive in to specific topics.
Joe Langner: We are the leading global supplier of business management software for small and mid-sized businesses. We are 30 years old and we are headquartered in the UK, with offices in Northern America, Latin America, Europe, Africa, the Middle East, Asia, and Oceania. We are publicly traded on the London Stock Exchange, our annual revenue is approximately two billion dollars, and we have more than six million customers whom we serve. We are focused on three segments of small business: the entry level, which consists of zero to 20 employees. Those work virtually in many cases. Then we focus on the SMB market, which consist of 10 to 100 employees. Finally there is the mid-market, which is really a lucrative market to focus on, and that has up to 500 employees.
There are of course always exceptions that consist of larger customers, but when we think about the businesses that we build products for, it is usually the customers that are in that small business arena: entrepreneurs, small companies, or smaller large companies in the mid-market that have departments with their own specific needs.
SM: What is your product portfolio?
JL: The portfolio consists of ERP software for financial and enterprise resource planning. Brand names for those include Sage One for entrepreneurial businesses, Sage 50 – either the U.S. or Canadian edition – which is for small companies with around 10 to 50 employees. Then we also have a variety of other ERPs: Sage 100, Sage 300, and Sage ERP x3. Those are all different solutions designed for higher levels of complexity in business practices. We are also focused specifically on nonprofit companies and the construction and real estate industries. We have ERP software and then we have the ancillary solutions, which also support the enterprise: human resources, sales automation, CRM, automated payments, credit card systems like ACH, which facilitate payment capabilities, and time management tools. Let’s summarize: We have the core solution in the ERP and accounting department. Then we have human resources, payments, sales and marketing, all being able to leverage benefit from an enterprise-wide solution.
SM: Are these cloud-based solutions?
JL: We offer variety. As the world is new to cloud, the entry level, Sage one. It is subscription based. You log on to a website and use the application. At the higher end our Sage EPR x3 is deployable on a cloud environment, where people can log in through a browser, or they have it on site and decide how they like to distribute it. The SMB market, where we have millions of customers, is primarily on-premise. But in the last year we have looked into extending that application through the cloud, which we call connected services. This might involve a website to do a project or manage a specific application, but have it read the data that is on premise. Another idea is a tablet device with applications for people to work, that communicates with the on premise ERP system.
SM: How do you position yourself against Salesforce.com or Zoho, for example?
JL: If you look at individual point solutions – Sage 50 might compete with Quickbooks, or one of our CRM applications might compete with Salesforce.com – what we found to be competitive is not necessarily under one-off applications, but addressing the friction that occurs between the different departments of the organizations. Microsoft back office systems or Salesforce systems may serve well for individual department needs, but there is still a lot of friction which hasn’t been addressed. How does the field sales agent know if the item to sell is in the warehouse? How do I make a sale and collect payment at point of service and have it flow back to the accounting department? How do I send a quote to a customer and make sure that the tax is correct on the quote?