After beating Sage 50 and Quickbooks Pro to the top business software industry award with our rapidly growing online accounting software I said that someone at Sage needs to grow some cojones and make a move into the software-as-a-service market. Well, it seems they’ve been quietly working away on their new web-based accounting package for the past 18 months and will be launching it to the public in January 2009.

After a hectic day I managed to get down to Olympia for the last hour or so of the Business Startup Exhibition. Just before I left I went over to the Sage stand to take a look at their latest marketing materials.

On a laptop tucked away in a quite corner I spied a program running in a web browser with the title “SageLive Beta”. I got chatting to the guy demonstrating it (without saying who I am). He confirmed it’s their newest product, in development for 18 months and due for release in January. Until now they’ve tried to keep it under wraps. I commented that it seemed to be a new approach for Sage to develop a product from scratch rather than acquire an existing company. They were obviously very proud of what they’d achieved and rightly so.

It’s totally different to anything I’ve ever seen from them before. It’s all in AJAX (posting to a Sage 50 database as the backend) and has a very nice interface. If it wasn’t for the Sage name in the top right-corner you’d be forgiven for mistaking it for the work of a cutting-edge Israeli start up.

I asked how it compared to other online accounting software, the first words out of his mouth were “Like KashFlow?”. I tried to hide my grin and asked if they saw KashFlow as their main competitor for the new product to which he said yes. I though it best to come clean so I said “Good to hear!” and handed over my business card.

I found out the guy I was talking to was Duncan Hawes, Development Manager for Sage Live. Duncan said he’s been meaning to come and talk to me but had been told by his higher-ups that he wasn’t allowed to as there were “issues” between our two companies. I’ve no idea what that’s about. The only direct contact I’ve ever had with them was a fairly friendly email exchange with one of their lawyers (if such a thing is possible). It was nothing like the less than amicable exchange we had with MYOB at the start of the year.

Duncan and his marketing colleague, Michael Barber, also confessed to being regular readers of this blog and to having opened KashFlow accounts under pseudonyms to keep an eye on us. All very flattering. “Enough of the ego-trip”, I hear you shouting, “Just tell us what you know.”

As I said above, it’s been in development for 18 months with a January ’09 launch planned. It’s been developed in-house in the UK. It’s going to cost £10 per month per user with free support provided via a live web chat system. They don’t have an API yet but they “are planning to”.

Apparently there is also a Blackberry optimised interface so you can log in on the move.

There seems to be some neat integration with Google Apps and GMail. As you’d expect there is integration with Sage-owned payment processor ProTX as well as PayPal. I wonder if they’ll knock us off our perch as the only accounting software in the world that has Certified Integration status with PayPal.

It all sounds good, right? Duncan and his team have certainly put a lot of effort into it an they should be proud of what they’ve achieved. But unfortunately it soon betrays itself as a typical Sage product.

I had a bit of a play with it (I asked if I could be a beta tester but they declined) and generally felt it was a vast improvement on anything else I’ve seen from them. One of the first things I try with a new accounting product is to create an invoice. I couldn’t quickly work out how to with SageLive –  it’s definitely lacking the intuitiveness of KashFlow and other web-based apps. It suffers from the same problem as all of Sages products – it’s obviously designed by people that have never run a small business. It looks really good and it sounds really good, but a scratch of the surface shows it simply doesn’t deliver the goods.

So, does it worry me? It’s priced very aggressively and Sage have the marketing budget and channels to really push it. Duncan assured me the whole board are fully behind the product, so I’m sure we’ll hear lots more about it.

But there are the usual problems with Sage software as mentioned above. Plus there is a lot of anti-Sage sentiment out there from small business owners (who have wasted time and money on unsuitable software) and accountants (who see Sage as a bit of a bully). All things considered, I think it can only be a good thing for us at KashFlow and the emerging SaaS industry as a whole. It shows that Sage accept that there is unsuppressable demand from business owners for web-based accounting software. Every penny they spend on marketing their new baby will help to raise the profile of all SaaS offerings. Maybe we should ask them to get involved with Cloud Computing Day on 12th Dec!

Something Duncan said really illustrated the way the industry is going as well as the arrogance that is natural at an industry leading company. I told him that in January we’d be releasing a quick way to migrate data from Sage’s product range to KashFlow. He said “It seems all the other products have a migration path from us to them, but we’ve never been asked to provide migration from their products to ours”. It was said as if it was something to be proud of. To me it just shows what direction all the punters are headed in.

UPDATE: Sage took Sage Live offline on 28th Jan ’09 due to security issues I found and posted here on 21st Jan.

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