Sage on roadmap to modernize mid-market ERP offering

Last week, In Sage’s Mid-Market European Analyst event the company unveiled its 2015-2017 Business Plan. For us, the highlight of the event revolved around Sage’s ambitions with its flagship mid-market product ERP X3.

Sage has decided to take Sage ERP X3 in two main directions of development:

1. Push the next iteration of its on-premise solution, called ‘version 7’ and

2. De-couple Line of Business functionality for its mid-market portfolio and move it into the cloud with a new product called ‘Sage X3 Online’.

With “version 7”, Sage promises some profound chances in the Safge ERP X3 product, which has undergone a complete re-architecture to make it relevant for today’s mid-market requirements. In addition, Sage is building a ‘cloud middleware’ layer so that ERP can be deployed in cloud environments more efficiently. Although Sage ERP X3 will be offered for on-premise and for cloud deployments, Sage maintains only one code base.

Version 7 is part of Sage’s efforts to transform its disparate application portfolio and give its legacy installed customers a single product roadmap. Much of Sage’s mid-market portfolio derives from a multitude of acquisitions, which led to fairly high fragmentation within its offering. Version 7 was designed to address migration challenges by enabling customers to upgrade to the new release irrespective of the legacy systems they have been using.

Many mid-market vendors are emphasizing their work around user experience, and one of the aims of Sage’s ERP X3 2017 development strategy is to build a user centric product. It is heartening to see traditional ERP vendors so concerned to please their business users with meaningful and visually-appealing interfaces. For many years the focus used to be on building functionality in a “does the job” approach.

Mobility, control (identify and access management) and intelligence (analytics capabilities) are other enhanced features promised by Version 7.

Sage claims that with Version 7 it has already managed to win back customers lost with Version 6, in part thanks to Version 7’s usability, where business users can customize the look & feel and functionality visualizations.

Nonetheless, while Version 7 is more of a conventional product, entailing rather traditional delivery models and channel instruments, the really big news for Sage ERP X3 is the development of its cloud-based version.

Sage ERP X3 Online is already available through an early adopter program since September, while general availability is scheduled for June 2015 in North America. In Europe, Sage ERP X3 Online is to come later in 2015, in line with the cloud interest and adoption on the other side of the Atlantic. First markets to test the product will be the ones with the highest propensity for adoption: the Netherlands, UK and Scandinavia.

Sage ERP X3 Online is a product targeting enterprises with 50-250 employees that are in a position to transition from a small accounting solution towards more powerful financial management systems. The product will be managed by Sage on top of AWS. While it is designed to operate as a multi-tenant platform (eg infrastructure, middleware), the application functionality for ERP X3 Online will be single tenant.

It is with ERP X3 Online that Sage is testing the waters of cloud. There are various challenges Sage will have to deal with as it enters this market, such as the prospect of channel disintermediation and new services partner tactics, potential cannibalization with traditional ERP X3 customers, pricing models and more automated release cycles.

Sage ERP X3 Online represents a cautious approach to cloud, but at the same time it is a sound one, as the company can draw significant experience from this project that would help it later to move the core mid-market ERP X3 product to cloud.

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