Sage Takes Safe Approach to Launching Payment Administrative Portal

On Monday May 14, Sage North America introduced its administrative portal for the Sage Exchange payments platform. Late last week, we were briefed on the portal, the platform, and Sage’s strategy by Greg Hammermaster, President of Sage Payment Solutions.

Here’s Sage’s intro to the announcement: “Accessible through the web and mobile devices, Sage Exchange enables small and midsized businesses (SMBs) to view, manage, and connect their payments environment, and gives SMBs consolidated reporting access to their mobile, point-of-sale (POS), e-commerce, and back office merchant account(s) to help them streamline the back office and manage the payments environment. In the future, Sage Exchange will also provide SMBs with an array of connected services, such as international money transfers and business prepaid cards.” The entire announcement and more info on the platform and portal can be found at http://www.sagepayments.com/ http://www.sagepayments.com/">www.sagepayments.com.

Here’s our take: It’s a solid, integrative Cloud-based platform and portal that delivers necessary payment process integration and management capabilities and functionalities increasingly required by, and beneficial to businesses of all types and sizes. Sage’s core customer and target base is SMBs, with the emphasis on “M”s, hence their initial focus on marketing to SMBs as per the announcement above.

Sage also has a history of focusing first on its installed base of technologies, offerings, and customers, giving them a very careful, almost incremental go-to-market approach. While some industry watchers view this approach by Sage as somewhat slow and even unresponsive, what we see is a provider that’s typically less quick off the mark, but which tends toward a fast follower. Sage typically manages a series of carefully thought out steps with established customers and technologies before launching into a full jog – very different than the do-it-now, full-sprint approach that has been used by almost every other ISV/solution provider out there, especially when it comes to Cloud-related offerings.

We’re beginning to see a similar pattern of behavior from more and more IT providers, especially when it comes to Cloud-based offerings. When it comes to business apps and processes especially, there’s less and less helter-skelter, throw-it-out-there approach being pursued. The stuff has to work, especially as Cloud/SaaS apps get “closer to the money” within businesses.

Sage’s approach, is, well, a “sage” approach. It is solid and repeatable, which helps to minimize potentially costly mistakes. It also, however, can lead to focusing too much on what makes current customers and Sage comfortable. Sage has a solid and loyal customer footprint, and a potentially huge SMB target audience. But frankly, it also has tremendous opportunity with smaller-large enterprises ($750 million - $2.5 billion in revenue), as well as divisions within larger enterprises, especially those that sell to and buy from Sage’s established SMB customer base.

We think that adoption trends in payment processing and integration will lead to a blurring of Sage’s traditional SMB market presence, along with an increased rate of entry by competitive providers. By its nature, payment process integration reaches well beyond single enterprises; it brings in a potentially broad range of financial institutions in multiple markets, and across the full range of small, to medium to large enterprises (the network effect).