Sage launches X3 v.6

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Sage launched X3 v.6 on Wednesday in Paris. It is the first time I recall Sage putting on a big show for one of its products. For those that don’t know, X3 is the 2005 acquired French Adonix ERP product that has since been developed under the Sage brand. It is aimed at the mid-tier (as we would define in Europe) and has something around 33% of the French market. Sage is hoping that its combination of (relative) simplicity, ease of use and combination of on-premise and web services will be attractive to a market that has been under served. It is also hoping that its SAFE platform will attract developers looking to build vertical market solutions.

I should have been excited but came away with more questions than answers. The mid-market is crying out for someone to enter with solutions that emulate the process centric solutions offered by the large vendors, is industry specific yet takes advantage of cloud economics to position products and services at modest cost. We are starting to see vendors get more adventurous in this segment but it is still early days. Epicor, SAP, Salesforce.com (with FinancialForce.com) and Intuit are all starting to look the part. X3 ticks some of the boxes but has several major challenges:

• Its heritage is in France. While it has ambitions to break out and become a dominant player, I wasn’t convinced that its go to market strategy holds up. The company was way too timid in its statements about adding resellers (it only has 150 globally for this product) arguing that it wants quality people who ‘get it’ and refusing to say anything about ambitions to add numbers. I understand that – but with Sage’s marketing muscle they can do a lot to help attract resellers. Given the US – where it has to make a big impact to be considered credible globally – has been disgruntled about other offerings I was surprised it is being less than aggressive.
• They’ve included NetVibes as the ‘drag and drop’ portal environment. That’s great stuff and the pre-recorded demo showed some VERY user friendly ways to dive into data and access processes. NetVibes is well known – in France – and has some reputation in the US. But what about Google? The only answer I got was that Google is ‘interesting.’ That’s odd because Sage has a relationship with Google for search. Google IS a global brand, something Sage could leverage in a mutually beneficial manner.
• There was nary a nod towards software as a service (SaaS) or cloud although the solution does take advantage of web based services like RSS for the portal and does have technology that allows some deployment into hosted environments. The company was coy about taking the cloud route arguing time and again that it is about offering customer choice. That’s a backstop argument typical of mature vendors that struggle to figure out how to transform their business model to the cloud. My more radical colleagues will say it is a poor excuse. I undertsand the dilemma faced by Sage, I just don’t understand why the company should be so coy.
• The company made a big deal out of its relationship with Logica as lead but not exclusive implementation partner, its relationships with Microsoft and Oracle for database. If Sage is to get this to global status then it needs someone like a Deloitte. When asked about open source such as MySQL, there were mumbled responses. Open source databases are perfectly capable of running 50-100 person instances. MySQL is part of the ‘stack’ of infrastructure services that can form the bedrock for a cloud offering. So again, why the coyness?

In its defense, Sage says that it is far from clear how and when customers will go to SaaS. It’s a fair point but one I don’t find overly compelling. Instead I see a lot of FUD around the topic which serves to perpetuate the position of incumbents like Sage. While it is understandable they will defend their turf, it doesn’t make sense to do so without providing some future direction. This is the point at which the discussion became interesting. (see next blog post.)

In the meantime I welcome X3 v.6. We need more competition in the mid-market and this will be a valuable addition. We just need Sage to be more aggressive in its marketing.

Disclosure: Sage covered most of my travel expenses.

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