The big companies in the accounting software market got that way through acquiring other companies and products. The result is that the Sage problem of having a variety of applications whose names are better known than the corporate name is fairly common. Ask your friends if they have heard of QuickBooks or TurboTax? Then ask them if they know who Intuit is. Likewise, Infor, which has been very aggressive in buying other software makers, is dealing with putting the corporate moniker on packages.
Sage's M&A activity brought together some names known in the mid-market - MAS, Accpac, Platinum for Windows - and two that are much more broadly known - Peachtree and Act. It's probably Peachtree that led Pascal Houillon, CEO of Sage North America, to take action so quickly. He's only had the job since April 1, but it sounds like you can blame the fact for quick action on a visit to Peachtree's offices where the name Sage was hardly visible. And he related a visit to an American bank where, after telling a friendly staff he was CEO of Sage, he was asked if he were interested in a small business loan.
But as a videotaped interview with Blytheco CEO Steve Blythe noted during a keynote panel at Sage's Summit conference this week, the company has changed brands about every year for the last five years. Or so it seems.
Sage's first efforts to apply the English company name across all brands ran aground when it lost a suit over the name that limited its ability to use the company name on products, except in very small type. So it renamed itself Best Software, after one of the parent of products such as FAS and Abra, which it acquired in 2000. Early in 2005, it got the Sage name back on this continent after paying a lot of money to the trademark holder.
From there, the company Sage Software has been renamed Sage North America and the company name has been put in front of products throughout its line. The names are officially Sage Peachtree, Sage ERP Accpac, Sage ERP X3, Sage MAS 90 and so on. However, the standard through the world is Sage 50 and so forth through a series of numbers.
So how important is brand? We are forced to buy generic drugs, which are a lot more important to our survival than software. In grocery stores, store brands are made by manufacturers who are disposing of excess capacity. Yet, those products seem less uniform and I can't imagine many people buying, or supermarkets offering, store-brand condoms, for example. Brand is still compelling.
Sage resellers have to sell the company to reach prospects. The only name that ever gained great recognition at the mid-market level is Great Plains, a name that lives despite the fact it has been Dynamics GP for several years.
But as Intuit moves on a similar course to put the Intuit ProLine tag across its product line, you have to ask how big an issue brand has been for a company that has 95 percent retail market share in QuickBooks and dominating share with TurboTax.
So what is brand anyway? It has to suggest a certain standard of quality and trust. It differentiates products from each other: a big Mac and a Whopper have different components, even though both are hamburgers on buns with a lot of the same add-ons. It's the sauce that's principally different and the phrase "special sauce" has become the catch phrase of differentiation.
I think the Sage move will probably be less painful than many imagine since most customers rely on the resellers help make the decision. Either a product can solve a problem or it can't and either customers can afford these applications or they can't. I don't think most are going to care if it's called Accpac or Sage 500. The one area in which it may make a big difference is at retail with Peachtree, but retail is less and less of an issue with low-cost accounting software.
But brands are just names Ultimately, it is performance and product quality that make brand work. Almost anything can be made into a brand as long as the words don't have bad cultural connotations. If you went back to the early part of the PC revolution, do you think anyone would have predicted that a name as geeky as Microsoft would become one of the most powerful brands in software?