Sage heads for the clouds - again

(By Philip Carnelley, 17 Sep 09, 08:15) Sage has unveiled a new attempt at providing a Cloud product. Sage’s problems with its previous attempt to enter the software as a service (SaaS) market with Sage Live have been widely documented (it was withdrawn just a month after launch). But as we commented at the time, (Currencies hit Sage net debt) Sage’s country-by-country approach to its products makes developing an entire SaaS model a huge task. So this time it is taking a rather different approach by piloting a Cloud version of its Saleslogix CRM offering, hosted on Amazon’s EC2 platform. General availability is slated for ‘early 2010.’ It’s not a new, rewritten multi-tenanted version; and so people will argue that this is not SaaS – it’s just the same old product on a different server. But if it works, will customers care? Well, they just might. They are certain to be told it's not SaaS by Salesforce.com, amongst others.

And here's the rub - in avoiding the problem of converting its myriad accounting products to SaaS, Sage has instead ended up going head to head on CRM with the most successful SaaS vendor on the planet. SalesLogix has a long track record but even so this will be tough competition. Also, Sage will not benefit from the SaaS virtues of a single image, common to all customers, so it may be creating something of a support headache for itself. We have already commented that SaaS has the potential to depress margins if not handled carefully. After its earlier SaaS product problems, not to mention Sage’s spat with Kashflow, the company will be under intense scrutiny with this move – we’ll certainly be watching it closely.