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SAGE OUTLINES GROWTH AREAS

Sage logoSage sees payment processing and long-term healthcare as growth areas. Those aren't surprising statements, but the prominence they are given in the 2009 Sage annual report says a lot about the emphasis top management will place in these areas in fiscal 2010.
The report also talks about changes to the reseller program in a way that some VARs may not agree with. "We have enhanced our channel partner compensation structure to drive and reward growth, are leveraging detailed partner segmentation models to identify better individual partner performance and are seeking to expand the channel in key areas to ensure appropriate geographical coverage and capacity to serve future demand." Sage North America has been talking about doing a better job of getting payment services into its channel. And despite the past troubles of the healthcare division, the company is strongly committed to continuing its work to improve that operation. That probably means that the profile of the revenue of Sage North America will continue to swing away from accounting, which represented 36 percent of sales for the unit in 2009. Industry-specific products comprised 43 percent, HR and payroll, 4 percent, CRM 7 percent and payment processing, 10 percent of revenue. But this is already a different profile that the United Kingdom operations where accounting comprises 50 percent of revenue and industry-specific products only 11 percent. Since HR and payroll represented 39 percent of the U.K. totals, we can probably assume North America won't remotely approach that percentage since it has disposed of its payroll business. The industry-specific areas in the U.S. include construction, nonprofit and healthcare products. Among other elements in the annual report was the fact that the restructuring, which meant Sage had about 700 fewer jobs at the end of fiscal 2009 than it did in 2008, cost around $43.3 million in charges. The company also disclosed that the February 2009 sale of its Tax Compliance Services for about $19.6 million in cash resulted in a gain of around $5.4 million.
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