Sage joins mid-market ERP quest

Sage hopes to compete in a crowded ERP market with SAP and Microsoft

Sage is continuing its quest to branch out from accounting and address broader business needs with the launch of Sage 200. The release is aimed at the mid-sized business audience that has recently become a honey-pot for a range of vendors from SAP to Microsoft via several hosted service providers.

Sage 200 is aimed at the lower end of that spectrum with a target audience of firms and departments that have up to about £50m in turnover. The release uses what was Sage MMS as its financials module and folds in a customer relationship management (CRM) capability.

Sage believes that the CRM function will help create a wave of upgrades and will serve various business processes including sales, marketing and supplier relationships.

“Over half of customers don’t just want to replace financials but also they want to add CRM capabilities,” said David Pinches, Sage head of product management.

The release will see Sage moving closer to enterprise relationship planning firms (ERP) that dominate the business applications suite space.

“If ERP represents software used across the business, we see ourselves as in that space,” he said.

Sage 200 requires SQL Server but Sage plans in future to offer alternative support for the MySQL open-source database across lines. However, a version of Sage 200 with MySQL support is not on the current roadmap that looks 18 months out.

However, experts and existing mid-market firms are sceptical about the prospects of firms moving into the area.

“Both Sage and SAP will have challenges because the mid-market is the most changeable market of all,” said John Crooks, UK managing director at ERP firm Agresso.

“Companies are being bought and sold and changing all the time. A lot of them are quite ambitious about growth prospects so they want something that works now but can easily be changed in the future. And by ‘easily’ they mean ‘cheaply’.”

Rebecca Wettemann of analyst firm Nucleus Research said, “SAP has yet to prove that it understands the needs of the midmarket and is likely to see an even stronger competitor in that space as NetSuite goes
public.”

Nigel Montgomery of AMR Research said Microsoft is growing in the mid-market because its Dynamics line links well with desktop capabilities.