Marc Van der Ven, managing director at HR and CRM software vendor Sage Middle East reveals why the company is not out to match arch rival Microsoft when it comes to building a local partner network
CME: Talk us through your channel strategy in the Middle East.
We have resellers in all countries in the Middle East. Most are selling one or two of our products at least — some are specialised in CRM, others in HR or ERP. We must be close to 40 partners right now if you only take into account midmarket resellers — not those that are selling Peachtree and ACT! because there are hundreds of those across the region.
CME: 40 is quite a modest number. Does that offer adequate coverage?
: Yes, I think so. We don’t want to be a Microsoft in that respect. We believe you need to have a small community of dedicated professional partners who are profitable by themselves, can sustain good and bad months, and can take care of clients who sometimes have very complex requirements. We are looking for very loyal companies who are focused on our products and don’t do too many other things. In return they will receive a lot of attention from us.
CME: So you tend to take a quality over quantity approach?
Yes. In Kuwait, for example, we have one partner doing our original Accpac product line and one partner doing the Sage 500 product line. Because partners historically have backgrounds in these skills there is no need for us to have five partners in every city in the Middle East.
CME: Which geographic territories come under your remit?
From this office we manage the whole of the Middle East up to Turkey — where we have CRM — plus Egypt and a little bit of North Africa because there’s a lot of potential there. We have just opened up an office in Riyadh and we’ll open up additional offices in Saudi Arabia and other countries too.
CME: What’s the timescale of that?
It still might happen within this fiscal year, which is the next nine months. We will have some people in Jeddah very soon, put it that way.
CME: What about North Africa? You mentioned earlier that it is becoming an interesting market.
It’s not a territory that we were focused on, apart from Egypt. But now that Libya has opened up dramatically, there is a lot of activity going on there and that’s primarily the focus. Our partners are now branching out into Libya and once they go there they can also make the next step to Algeria and other countries. But that’s in the long term. Sage has a separate business there that is more connected to France because of the language issue. We recently found that in some of the analyst reports here in the region they are not including the Sage numbers for North Africa, which are quite significant. They are not generated from this office, but they are coming from France. If you put all that together we are probably the leading player.
CME: What’s your assessment of the competitive situation here?
This is an extremely competitive market to be in because on the one hand you have got all the serious international players and then on the other you have got every product under the sun coming from India, Egypt and other local markets. Pricing is a big issue. However, most companies understand that support and a long-term vision of the products that they are buying is the most important thing. The cost of buying the software license is a fraction of what you are really going to be giving it over time.
CME: Does Sage face any problems with software piracy?
Very little, because of the complexity of our software. Anybody can pirate the CDs but that doesn’t get you anywhere. Again, it comes down to the point that the cost of the software is only a fraction of it. Whether you get it for nothing or pay a good price for it, you are only going to get the use of it if somebody comes and implements it for you because no client could implement it for the first time themselves. They need certified consultants who will do the job.
CME: Sage has strong brand visibility in Europe due to its UK roots. How does this region compare?
Sage used to be a joint venture here and it had different objectives and different means of operating. Now that we are a combined business there is a lot that we can do still. I think in the business of accounting software, most people have a knowledge of who we are and what we are doing, but there is still potential to bring the brand further and that’s one of the things we are going to do this year, specifically in Saudi Arabia. The branding is one thing, but for us the real point is getting in front of the customer and showing them what we have.