Life as a vendor must be pretty complicated at times. Not only do you have to design and manufacture a product but then you have to find a sales channel for it, ship it, market it, create demand and, hopefully, make a profit. Oh, and you have to support it after it’s sold.
Obviously it’s not too complicated otherwise no one would bother to do it. Having a third party channel to handle sales and distribution (possibly marketing, demand creation and support as well) can ease some of the pressure but it also brings its own complexity.
For instance, according to a story on MicroScope, Sage had evolved to the point where it had 54 separate partner programmes worldwide. Unsurprisingly, Sage decided it needed to do something about this state of affairs, reducing the number down to a single global programme in October last year.
My immediate reaction on reading the report was to wonder how on earth Sage had managed to get to the point where it had 54 separate partner programmes and why it had waited so long to do something about it.
One of the big issues for an acquisitive company like Sage is that as well as buying companies, it has also acquired their partner programmes and sales channels. It can take a long time to amalgamate and consolidate all those different programmes, especially if the company is actively acquiring at a rate of knots. Just when do you have the time to stop and consolidate?
At the same time, from a channel partner’s perspective, especially one coming from an acquired company, there’s likely to be a lengthy process required in deciding whether to take on more of Sage’s portfolio or to opt to switch to a different vendor. Some might be very happy to have access to a wider range of products while others, especially those who may have chosen a particular vendor because it wasn’t Sage, would be cautious about what they should do next.
To make things even more convoluted, Sage might well attach a much greater value to the partners that are equivocal about it than to those eager to join the fold. So there’s a lot of time and effort required to try and get the right partners on board while, at the same time, enthusing some of its existing partners to take on the acquired product.
Alan Laing, Sage EVP, partners & alliances, described the consolidation as providing “one infrastructure, one set of assets, one set of benefits so you can focus on taking your customers on a journey to help grow your business”. Which is fair enough, until the next acquisition, the one after that and the one after that.
Still, by consolidating from 54 down to one last year, Sage has escaped the prospect of offering 57 varieties of partner programmes at some point in the future.
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