Last week, Sage launched X3 v.6, its mid-market ERP solution. For those that are unfamiliar with X3, it is the acquired Adonix solution that has since been re-engineered and re-branded.
Sage is hoping that it can break out of its French country speaking enclave with a solution that addresses the needs of mid-market companies requiring a product that is readily customizable, easy to use and which can benefit from some web services. It has for instance partnered with NetVibes to offer a drag and drop portal style dashboard that allows drilling directly into X3 data. I would have been more impressed if the company had partnered with Google for iGoogle but that, apparently, is not on the agenda, despite the two companies have a pre-existing relationship.
What is truly surprising is that Sage claims it doesn't see much traction or interest for cloud based solutions, but hedging the discussion with references to 'customer choice.' It is surprising to me because I see demand almost daily. In a recent report Saugateck Research, said: "When fifty percent of any market indicates this level of near-term interest, consideration, and planning, the time for waiting is clearly over, and the time for software vendor action – including transitioning to SaaS / Cloud-based solutions and business models – has arrived. Our research suggests that at least 35 percent of traditional ISVs have begun transitioning to SaaS – with more than half already generating SaaS revenues / profits. By YE2014, 70 percent or more of traditional ISVs will offer Cloud-based Business solutions."
per Saugatech Research
Seeing finance and accounting tip over the 50% barrier Saugatech references is interesting because finance has traditionally been a bastion of technology conservatism. Assuming the research is correct then I can envisage a significant take up in SaaS/cloud solutions.
In the video above, Emmanuel Obadia, Sage SVP X3 and ERP talks about provisioning for users, RIA and mashups. The implication is the company is making ready for the cloud 'should it take off' but there is as yet no sign the company is likely to take advantage of cloud economics for its customers.
My take: Vendors like Sage are battling with acquired legacy code. They want to eek out as much revenue as possible from existing solutions but cannot convince themselves the world has changed enough for them to make the SaaS leap. In a later conversation with Paul Walker, Sage's CEO, he said the company has committed R&D to the topic. If that's the case then much of it is invisible. Even then I doubt whether we're talking significant sums given Sage's R&D spend as a percentage of revenue hovers around 10%, much of which is dedicated to back filling existing applications. The company has promised it will open the kimono on what it is doing around SaaS but that's for the future. In the meantime, I see X3 v.6 as an opportunity missed. They could have been far more aggressive in their commitment to cloud computing but chose to partially side step the issue with an argument that is not overly convincing. Using the 'customer choice' argument is fair enough if you are seeing those choices being made. I don't. As I said to Mr Walker, it is the vendor's job to offer innovation to its customers. Cloud economics falls into that category.
Disclosure: Sage covered most of my T&E to the launch event