Sage makes bold SME play

Listed on the London Stock Exchange, Sage has been on an acquisition trail in Australia since 2003, buying out business management software company ACCPAC, relationship management software maker ACT, accounting and taxation software firm HandiSoft, and payroll and human resource management software vendor MicrOpay.

Sage managing director Alan Osrin said the company intends to grow organically by between eight percent and 10 percent . "However, we are looking at hundreds of possible businesses for acquisition and we intend to dominate the Australian SME market within three to five years," he added.

It has a foot in the door with the takeovers, holding around 30 percent of the SME market share with turnover exceeding $1.65 billion. The company has begun a $3.5 million marketing and rebranding campaign to align its stable of Australian companies under the Sage Software Australia name.

Some analysts are sceptical of Sage's potential in an already crowded SME market with the likes of Oracle, SAP, MYOB and Microsoft, while others are more positive.

Dean McGhan, research director and principal analyst at Gartner, described Sage's strategy as "ambitious". -I think it's interesting given the fact that Oracle has come out and said they're going to war with SAP ... it spells danger [for Sage]."

Chris Chong of IDC Australia expressed optimism Sage could do well. The software market analyst said Sage has passed under many people's radar and appear to be very strong in smaller end of the SME market.

"With branding and established local presence, it could win customers.

-I think that while some of the Cisco's and Microsoft's might have more sophisticated products than something like ACCPAC, Sage will have the ability to scale and remain flexible because of the simplicity in their core modules," Chong said.

Sage has over 4.5 million customers worldwide, including 60,000 in Australia.