Sage Buys Intacct

Sage Buys Intacct

By Denis Pombriant

Jul 26, 2017 10:21 AM PT

Sage’s Tuesday announcement of its agreement to buy Intacct prompts a multilayered look at the evolution of the cloud enterprise resource planning space. Both companies are partners with Salesforce and have products based on the Salesforce platform. Each is a member of the AppExchange, and both are situated in the broad cloud ERP space, which has been receiving a lot of attention lately as the market seems to be moving en masse, albeit glacially, to the cloud.

Sage, a large supplier to small and mid-sized businesses, offers distinct accounting solutions for some rather specialized markets, such as construction, real estate and manufacturing. The company grew by acquisition over two decades and accumulated a stable of applications that didn’t communicate very well, if at all.

At one point, it offered three CRM products for growing businesses, but those businesses found it hard to migrate as they grew because the data structures were very different. Some even used flat files — perhaps there was one cloud offering. As the company grew its footprint, it also constructed a kind of Tower of Babel. Without a cloud architecture, Sage became less relevant even to the partners that never expected to work in the cloud.

Its business model kept the company from becoming more of a force in the SMB market, because it sold through the indirect channel. Channel partners were thought to be conservative and unwilling to accept changes that could have consolidated the code bases. As a result, the company was a balkanized collection of small fiefdoms, each with a maintenance and development staff, and the totality was hard to manage and fund.

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