Sage buying Pegasus could limit buyers' options

Sage's £27 million-valued conditional proposal to buy rival accounts software vendor Pegasus could force users down a cul-de-sac, observers said today.

Friday's announcement that Sage had made a "conditional proposal" of 425 pence per Pegasus share, has sparked fears that users could be left with no genuine alternative to the Newcastle-upon-Tyne-based software vendor.

"Sage with Pegasus would be so dominant in the UK," said John Ces, senior anlayst at market researcher Romtec. "There are only a few modular accounting software publishers in the mid-range sector and Sage and Pegasus dominate. If you're using a Pegasus product there aren't many places to go."

Ces said the move was all about market share. "Sage competes with Pegasus's Opera and Senior at the mid-range with Sovereign. I can't see a benefit apart from putting another person out of the competition."

He added that Pegasus products would likely be orphaned in the event of a purchase. Maintaining both companies' product lines would be "a bit like Microsoft buying Intuit and keeping Money. I'd be surprised if they kept the Pegasus products; it would be very confusing for customers and the products are too similar."

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All