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When Vendors Enter New Territory

Some are making ill advised moves.
May | 29 | 2009


May | 29 | 2009


Brian Sommer’s post on Sage’s recent mid-market entry (X3) intrigued me. By way of background, Sage has historically focused on small to medium sized companies. From Wikipedia:

The Sage Group is engaged in the development, distribution and support of business management software and related products and services for medium-sized and smaller businesses.

Disclosure: I am a former Sage value added reseller (VAR). I can tell you from firsthand experience that international implementations of X3 could prove problematic, especially from the get-go. Since just about every Sage VAR is region-specific (last time I checked), there isn’t the same degree of routine coordination among its partners that exists among Lawson partners, just to name one example.

To be sure, Sage’s autonomous and regional VAR model has certainly provided significant benefits to clients during implementations at “single site” organizations. These include:

  • Fewer “on loan” consultants has meant both lower rates to clients as well as a more stable, knowledgeable consultant base
  • Reduced travel costs
  • Ultimately, a greater percentage of successful implementations (although this is admittedly an educated guess on my part).

Upping the Ante

X3 changes things. As Brian suggests, initial coordination among Sage partners could open a Pandora’s box. I’d argue that this is especially true for larger, more complex organizations implementing in multiple countries (X3’s target audience). The scope of these projects is quite a bit more complicated and, as a result, the failure rates are much higher.

Since Sage relies on local VARs to sell and implement its products, the company should attempt to forge some type of partnership among its vendors to facilitate successful X3 implementations. Clients whose implementations suffer from a lack of coordination among multiple VARs will serve as anything but a case study for future X3 engagements. I can imagine Tier 2 vendors making that very point during the sales cycle.

In the end, system failures will ultimately slow X3’s market penetration, regardless of the quality of its product or architecture.

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