There has been lots of “activity” at Sage over the past few months, suggesting that the company is, in their own phrasing, undergoing a “transformation” of sorts. What that might bode for the future of “the product formerly known as Peachtree” (soon to be Sage 50 2013 – U.S. Edition; quite a mouthful!) has been the subject of much speculation among the community of Peachtree Certified Consultants (of which TriStar is one).

In attempting to “read the tea leaves” we have observed the following:

1. The Peachtree product line has been “re-branded” from its 30+ year name to a more corporate brand name (Sage 50)
2. Rumors initially circulated that, effective with 2013 release, the product would only be available via subscription. This position was rather quickly reversed. For now, only new licensees are required to purchase via subscription, not  existing licensees.
3. A very strong and concerted effort has been launched by various Sage “Inside Sales” reps to sell Peachtree BusinessCare “subscriptions” masquerading as 2012 upgrade licenses, in advance of the 2013 release. In more than a few instances those sales calls have been made, to customers officially registered to reseller accounts (allegedly a no-no at Sage), with the “misinformation” that subscriptions will become the only way to upgrade existing licenses.
4. A “pricing du jour” approach to selling upgrade licenses has been rolled out by Sage, with various “limited time special pricing” offers for 2012 upgrade licenses being circulated a few times per month, in an apparently concerted effort to move as many currently licensed users as possible to the 2012 edition prior to the release of the 2013 edition.
5. A significant (>10% in some instances) price increase, for both new and upgrade licenses, has been put in place for the 2013 edition of the product, which will release in mid-May.
6. The “Inside Partner Advocate” staff at Sage (the individuals who serve as liaison between Sage and its reseller/consultant community) has been reduced from 3 people to 2, leaving those two individuals to provide liaison services for 250+ resellers/consultants across the U.S. We have lost our most critical Sage relationship as a result of this reduction.

We can infer from all of these observations that Sage is attempting to distance itself from whatever “cachet” the Peachtree brand has delivered over its many years in existence.  Apparently the company is now firmly on the path toward an “integrated services” sales model. This will likely result in the end of “perpetual product licensing” sales, in favor of an “annual software subscription” sales model, bundled with 800 number phone support and various ancillary “services” (for which extra charges will apply in most instances, as an “upsell”).

Reading these tea leaves, we predict that by the time of the next product release (following the 2013 edition):

1. The Sage 50 product will only be available via subscription, for both new and existing customers
2. Customers not on the “current” version (by then Sage 50 2013) of the product will be expected to pay a premium to upgrade their existing licenses (this has recently been introduced as a policy with other Sage products)

In this new business model, it seems to us, there is clearly no need for a reseller/certified consultant channel. That makes our future with “the product formerly known as Peachtree” somewhat cloudy. License sales will – very likely – no longer be part of our business model, nor will annual Quantum subscription renewals. All of these orders will need to be placed directly with Sage.

We of course do not intend to fade away as a result of this “transformation”, or abandon our software support  or technology advisory role with our clients. Our knowledge of Peachtree will not suddenly disappear if we are no longer able to sell licenses to our clients. We recognize that many clients prefer a face-to-face relationship with a local consultant provider, who understands their business as much as the software supporting that business, and who can place the software in the larger context of the technology deployed at your company.

It does suggest, however, that our overall business model at TriStar, and the suite of products for which we offer support, may need to be modified to conform to this “new reality”. We are hard at work on this task at present, looking for the right combination of product support and general software and technology advice that will be of the greatest value to our clients.

If you have thoughts as to how we might be of value to your business as you navigate the tricky currents of emerging technology, I encourage you to share them with us so that we can move forward together and continue delivering valuable services to our client base.