In this blog piece, Executive Director Anthony Short gets down in the weeds to understand how an accountancy software giant is refining its sales model.
I apologise in advance for the title of this piece (a woeful attempt at festive click-bait) particularly as this is a fairly serious topic for those that have been affected.
Just over a week ago, I received an email from Paul Hagen of Active Distribution, who was interested to know if any other members had been in touch in regard to issues with Sage software.
Now the first thing to note is that this wasn’t some kind of ongoing technical support issue, but rather a fundamental shift in the go-to-market approach from Sage. Paul explained that a number of years ago he invested in a ‘perpetual product licence’ that effectively meant he had access to his chosen Sage solution on an ongoing basis, with no additional required cost.
It wasn’t that long ago that this was the normal route to software provision, and as long as the user was happy with the performance of the software purchased then there was no real need to invest again until further features were required.
However, this situation has now changed, as Sage has made the decision to move its customers onto a monthly payment model with a recurring fee based on whatever level/feature set is required. Fair enough you might say, except that in the T&Cs of its perpetual licence solution the minimum expected lifespan of the product was 15 years – and as far as Active Distribution is concerned they are a long way off that time scale. And if that wasn’t enough the new monthly rate means that by the time that 15 year point is reached, Paul will have had to supplement his initial investment at least ten-fold.
For many software solutions this has been the direction of travel for a while, I mean how many of us now have Office 365 subscriptions to basically get access to Excel? However, what has incensed Paul so much is that Sage have been employing fairly robust tactics to force the pace of transition. Every time you sign in to Sage the software does a little online security handshake with the mothership just to confirm licence details, etc before letting the User have access to their data. The security protocols for Perpetual Licence customers have now been deemed obsolete and removed, and the only way to update these protocols is (you guessed it) to upgrade to the latest version of the software, only available as part of a monthly subscription. Failure to do so means you are locked out from your data.
After talking this through with Paul I was a little surprised that this hadn’t made a bigger splash. There has been some reporting of it, you can read an article penned by The Register here and there are some quite fruity forum discussions out there, but generally not what I would call a Tsunami. I can only imagine there are quite a few disgruntled Sage PL holders doing whatever it is that FDs and Bookkeepers do when they get really miffed.
I have contacted the Federation of Small Businesses to see if this has been something that has registered with their members, and indeed whether they have a position on it. It certainly seems to be firmly an SME level issue, so it will be interesting to get their take on it.
As I said at the beginning, Paul got in touch because he wanted to ascertain if this was a problem for others in the MI sector (and whether we could pool our experiences). So if this (not so) festive story resonates please get in touch. There probably isn’t much that can be done, but it would be good to know if (and how) Sage are providing some support as part of this rather abrupt change of direction.
