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Sage Encourages Upgrades with End of Life
With the release of Line 50 Version 12 scheduled for mid August, accountants and Sage Business Partners will be aware that Sage recently announced the intention, with effect from 31st July 2005, to remove all support for versions 4 – 7 from the Line 50 range of products. For accountants offering an 'outsourced accounts department' or 'virtual finance director' type of service to clients, this is a great opportunity to introduce them to the benefits of Online<>50.
With the holiday season fast approaching, Online<>50 offers business owners and managers multi-location 24 hour access to their accounts data. Any business looking to enable flexible working will find this an ideal solution. Given the additional benefits of remote telephone support, a secure scaleable and robust IT infrastructure, a technical help desk for support, a common application and all future upgrades included as standard, you will no doubt appreciate that the time and efficiency gains from using Online<>50 will far outweigh the cost. See our upgrade Conversion Challenge, below ...
Upgrade Conversion Challenge
Sage are encouraging users to upgrade their accounting software in advance of the release of Line 50 version 12 expected in mid-August (see also the article above). Users whose Line 50 software is approaching 'End Of Life,' and who are faced with an upgrade, should consider the benefits of Online<>50.
Not only will they benefit from simultaneous multi-location access, and enjoy the benefit of having their accountant closer to their business, but they can now choose which Line 50 version to upgrade to: Accountant, Accountant Plus, and Financial Controller are all available now. Online<>50 currently hosts versions 8 to 11 and the service allows users to select any of the currently hosted versions. Although upgrades are included in the cost of the service, users are not forced to upgrade to the latest release. They choose when to upgrade, and for users who prefer to wait for the first service pack to be released before installing an upgrade this is of great benefit! Analysis of our user base after the release of version 11 showed that 20% of users chose an earlier version than the most current when coming onto our platform.
Although a move to the Online<>50 service will cost more than a straight forward in-house upgrade, there are other benefits, to both accountants and their clients, that could far outweigh any cost differential.
Sadly we are unable to offer discounts for upgrades, such as those that Sage is currently offering on upgrades to users of versions 4 to 7, as they do not apply to the online licenses. However, as an incentive to Online<>50 business partners to promote Online<>50 as a beneficial alternative to in-house upgrades, we are offering a 6 bottle case of Bollinger to the Business Partner who adds the most client users over the period June 2005 through August 2005.
Online<>50 Pricing in the News
In our April Newsletter we announced that we have new terms for the licensing of the Sage Line 50 range of products on the Online<>50 platform. We also wrote individually to our clients advising them of the implications of the changes. Feedback has confirmed that there is some confusion with regard to the new model, due in part to unclear presentation of information and to a significantly more complex structure than we had previously. Unfortunately some of this misunderstanding has been communicated to the accounting press resulting in one instance in a very public discussion of the changes to our agreement with Sage by parties without a full appreciation of all the facts.
Our aim here is to set out the facts and to clarify some misconceptions about the recent changes.
Most of the issues relate to an increase in the price of the service. While in most instances the price of the service on a monthly basis has increased, this is easily explained and justified.
Product vs Service
When comparing ownership of software to the ASP model, it is important to compare like for like. It is entirely reasonable that the cost of the same software should be the same independent of the channel of delivery. With the new pricing model the cost of the Sage application software is clearly and separately identified allowing this comparison to be made. With a hosted service, such as Online<>50, there are clearly additional costs for the hosting, support and other services that are provided - and benefits arising from these services too. It is not reasonable to expect that a software only solution would cost the same as a managed service as they represent totally different propositions.
Our original contract with Sage gave us exceptional terms for licensing Line 50 Financial Controller online. The Sage licence terms were not charged monthly, as you would expect for an ASP offering, but annually with our only monthly charges being for hosting and other relevant software licences. So, while we believe that Sage have acted within their rights to introduce an adjustment to the pricing of their software for the ASP model, we believe it reasonable to expect the Sage ASP software licence to be comparable to the cost of software ownership. While the new licence terms are indeed broadly comparable with the cost of offline product, we believe that a number of assumptions underpinning the new price level are incorrect, and that a further (downward) adjustment may be required to bring them to parity.
Added Value
As outlined in our April newsletter, and despite the changes to pricing, there are a number of advantages to the new model. Not least, the removal of the ‘block of 10’ companies in favour of ‘unlimited companies’ for bureau users, with client access being provided as required. In general, the added flexibility and range of products available is being well received. The benefits of the service and the added value that it facilitates still outweigh the cost, but there are always exceptions to the rule. We are currently developing applications and partnerships that will address the particular concerns that have been raised so that our clients will have applications to suit a broader range of requirements and budgets. Please direct any enquiries to the sales desk or talk to your Account Manager.
SMEs are Ready for Hosted Services
In a recent survey carried out for, among others, Microsoft, around 44 percent of small businesses say they are ready to pay for hosted services. The survey focussed primarily on communications offerings and concluded that the widespread take-up of broadband has made the application service provider (ASP) model viable today.
The survey suggests that the most likely customers for the ASP business model are small businesses specialising in professional services such as law and consulting. This confirms our belief that the real value of the Online<>50 proposition is as an enabling platform for the outsourcing of 'non-core' functions to external experts, such as accountants.
Microsoft is known to have been looking at online delivery of software for a number of years, and the success of a number of ASP companies is being closely tracked by the software giant.
Rob Lambden, Online<>50 Managing Director, comments: "We are not surprised to see that the interest in hosted software is increasing further. Our own user growth continues to be strong, and our continued presence in the market is proving to former sceptics that the online delivery of software makes sense commercially, technically, and socio-economically."
This survey is clearly very good news for the growing number of practices using the Online<>50 service as a platform for delivering outsourced accounting solutions. Not only do small businesses want the ASP option, they expect it.
