Net@Work: Last Of The Sage Loyalists Joins Netsuite

News circulated on January 29, 2015 that Net@Work – ranked #10 on the Accounting Today 2014 VAR 100 with $34.50 million revenues – has taken on Netsuite.

Founded in 1996, Net@Work has 5,500 clients and around 160 employees in 14 offices across the U.S. and Canada. An expert in technology infrastructure, Net@Work has also built successful practices across all areas of business, including accounting/ERP, CRM, manufacturing/distribution, HRMS, ecommerce, Microsoft SharePoint, and enterprise/ document management representing partners such as Sage Software, Abila, Microsoft, Magento, Dell, HP, Citrix and VMware.

Net@Work will promote, implement and support NetSuite to its customers and a growing new prospect base that are increasingly interested in moving to cloud-based ERP and business management solutions from on-premise software. The consultancy will also leverage its vertical industry domain knowledge to build SuiteApps using NetSuite’s SuiteCloud development platform to meet their clients vertical needs.

In my view Sage will be able to show good results in North America for the next few years mainly by margin/tier “gymnastics” and price increases.  The problem may start to appear in the longer term (3-5 years) as partners are fully ramped up to deliver competitive solutions both to new users and existing customers.

Partner defections should be a serious concern for Sage.
For those wondering why defections such as this are such a bad thing?

  • Most Sage mid-market sales are to installed base or those  who’ve used Sage before.
  • As Sage partners pick up competitors they will potentially  market these competing products as an alternative upgrade against Sage and into their loyal installed Sage base
  • Local partners “own” the “last mile” relationship with customers. Especially large complex organizations who require lots of on-site assistance.
  • As Sage partners market to new users – they may market competitive solutions in a first position
  •  If only one or two partners were doing this – the problem is not terrible. Not good but not terrible.
  •  Now that major Sage partners are actively taking on competitors – the situation is terrible for Sage

This is, in my opinion, the beginning of a very tough time in the mid-market for Sage North America.  

There won’t be an immediate impact but that huge sucking sound you hear in 3-5 years could be customers being ushered out of Sage and into a competitor’s arms.

Wayne Schulz is a consultant who writes about the ERP industry and technology related news.