Accountants on Sage's reseller network ‘priced out’ with upgrade

Accountants who pay for membership to resell Sage products fear they will lose custom due to the software company’s price hike for the latest release of Sage 50.

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Accountants who pay for membership to resell Sage products fear they will lose custom due to the software company’s price hike for the latest release of Sage 50.

Sage is in the process of conducting a large marketing campaign in the direct sales department, encouraging customers to switch to a subscription model before the prices rise for the software upgrade.

The vendor is changing from license fees to a subscription-based pricing model. From August, customers who wish to purchase a one-off license fee will face an increased charge.

Members of Sage’s network of business sellers, the Business Partner community, pay a yearly fee to supply their customers with Sage software and training.

Accountants who are part of this network have expressed concern that the current marketing campaign could lose them business, as the vendor can easily price them out with unmatchable, cheaper deals to get customers onto the subscription model, therefore cutting out the middle man.

However, Sage has denied that this is the case, saying that the resellers still have an opportunity to provide services that “add value”.

Last week, resellers received an email from Sage to tell them of the price changes to upgrades.

It read:  “Good afternoon, Please find below a price list so you may contact those who you may still have dealings with. They will have the opportunity to get the Sage 50 accounts 2014 and 2015 version as well.”

Upgrades

RRP net

Your price net

Price From August 1st RRP

Your Price From August 1st

Accounts

£315.00

£252.00

£536

£428.80

Accounts Plus

£455.00

£364.00

£819

£655.20

Accounts Professional

£600.00

£480.00

£1,140

£912

License fees have increased from around £300 plus VAT to an advertised £641 plus VAT for the new release.

The same account on a subscription basis will cost from £25 per month, or £75 per month for Sage 50 Professional.

“None of this is any surprise, but it is now abundantly clear that Sage have had no scruples about competing with their own Business Partners” said one re-seller on the Accountingweb Sage discussion group last week.

The accountant said that after calling customers, he discovered that the majority had switched to paying Sage directly for its upgrades.

“The remaining 20 or so have have been sold SageCover Extra directly by Sage within the past year, even where we originally sold them Sage and have kept their versions appropriately up-to-date in line with real-world needs. As annual upgrades are included in Extra there's obviously no software sales business there for us anymore.”

Sage denied that it was contacting customers directly and from within its business sellers’ network to offer the subscription model.

When asked if the new pricing would affect Sage’s Business Partner community, a spokesperson for the vendor said: “No. The fact that we are heading towards a subscription model is no surprise for anyone that follows the company. It’s where we’ve always said we are heading, and the transformation of Sage 50 Accounts is the first major milestone in that direction.”

Sage said that the move to subscription should allow its Business Partner community to “focus on adding value” to customers.

“The feedback from partners at the roadshow event has generally been positive, acknowledging why we have made the move and recognising the opportunity it presents,” it said.

Update on 14.08.14:

Sage has now officially launched Sage 50 as a ‘milestone’ cloud offering. It claims that its subscription pricing and more intuitive user interface now makes it “even more accessible” for businesses.

The upgraded sys0tem includes Sage Drive, a service that allows users to store accounts data in the cloud.

It also includes Android and iOS apps, to allow users to access the service via mobile devices.

Customers can buy the software with a perpetual one-off license fee, or on subscription from £25 a month.

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