Bob Scott reporting in his weekly Insight column.
Sage this week introduced its new partner programs with presentations to its resellers. The company said it is creating a Global Partner Program for Sage One, Live, Impact and X3 and for all ISVs. And overall, the company said it is simplifying its offering by moving both accounting software and construction and real estate resellers to plans that span products, with all Sage revenue applying to tiers. Details on the global program, described as part of the transition to cloud products, are planned for discussion next week. Overall, the updated North American Partner Program for existing resellers aims at helping move to subscription pricing. Discussions were led by chief revenue officer Rich Spring. Sage will now provide the highest margins for new customer sales, although there are no longer separate margin plans for installed base and new customer sales. First-year margins are the same for license and subscription sales but there are inscription margins after the first year for subscription sales by Premier resellers, those at the Platinum, Diamond, Gold and Silver tier levels. Margins range from a base of 29 percent for Silver resellers with that tier receiving 35 percent for new customers to a base of 48 percent for Diamond VARs, who can move up to 58 percent on new sales. The real pressure is on the lower tiers. Silver dealers need to buy $30,000 in product a year, but they have a goal of $17,500 in new customer revenue, 30percent growth. The percentages for goals for growth drops as follows: Gold, 25 percent, Platinum, 20 percent; Diamond, 15 percent. As to pressuring smaller dealers, one VAR said, “I can’t say I blame Sage. The small partners are probably 80 percent of administrative cost and headaches.”