Yesterday, the UK-based Sage Group said it had agreed to sell seven of its noncore products, virtually divesting itself of its North American operations. Notable divestitures in the CRM space are:
- ACT!, a contact and customer management solution for small businesses, and SalesLogix, a CRM solution aimed at the midmarket that Forrester ranked as a leader in the midmarket CRM Wave™), which were sold to to Swiftpage.
- Sage Nonprofit Solutions, a suite of solutions for fund accounting, donor and fundraising management, and grant management was sold to the Silicon-Valley based private equity firm Accel-KKR.
What does this divestiture mean?
- Sage has previously publicly identified which products are core to its business and which are not. Divesting itself of noncore — and perhaps underperforming — products allows the company to better focus existing resources in a highly competitive solution space.
- The sale to Swiftpage is natural, as Swiftpage has been a development partner of Sage’s and has already built robust integrations between product suites.The Sage products that Swiftpage acquired are complementary to its existing email and social media marketing products and will allow Swiftpage to deliver a comprehensive digital marketing solutions to its prospects. However, Swiftpage will have a to do a significant amount of work to bring a differentiated value proposition to a very competitive market.
- The Accel-KKR acquisition is also easy to rationalize. Accel-KKR brings operational best practice management to midmarket software compaies in order to turn them around and/or accelerate their growth. The equity firm already has knowledge of the CRM space via its previous acquisitions of Kana Software (a customer service soultion) and Lagan (a government CRM solution).
These sales will allow Sage to better focus on its core products, Sage CRM and Sage ERP, which are both aimed at small to midmarket companies that want integrated back- and front-office capabilities and who want a single view of customer and product data across the organization. Sage says that its road map investments will include deeper integration within its product suite and a fleshing out of its cloud and mobile strategies in order to make it more competitive.