Enterprise Accounting Software

Stephen Kelly seeks to "awake the sleeping giant" of Sage

Crouched on the South side of the Tyne, like a high-gloss sleeping lion, the Sage Gateshead is a powerful symbol for the North East. It offers live music, local festivals, and lessons for children. And situated opposite Newcastle town centre, in disadvantaged Gateshead, aims to provide amenities to a deprived community.

Yet the odd thing is, although Sage is a huge employer in the region and something of a local legend, its reputation does not spread much further. And in many minds it barely exists beyond some dull, niche bookkeeping exams. Now Stephen Kelly, who arrived as the new CEO 10 months ago, is determined to change this.

With a very intense blue gaze, controlled gesticulation, and educated accent – with the g’s neatly lopped off the ends of his ‘ings’ ­– he conveys enthusiasm, intelligence and an awful lot of drive. And his track record for taking on taking the worst projects, and turning them round, is extremely impressive. This includes building Chordiant over nine years, growing Micro Focus revenues from £140m ($218m) to £450m ($700) and perhaps most astonishing of all, delivering on the UK government’s digital strategy.

Now it is Sage’s turn to receive the treatment: “It is a bit cheesy,” Kelly tells us at the recent Sage Summit in New Orleans “but we’re Britain’s best kept secret”.

“We’re awakening a sleeping giant and the way we do that is lift up our eyes in terms of what we’re proud of – like in the UK 54% of all companies pay their people using Sage. I was blown away by that. It is almost like we’re just very nice – and I love the humility – but we under-punch our weight.”

“We should never be brash,” he adds “but we should be bold, and we should be the champions of small businesses… because they need us.”

Kelly puts himself firmly at the centre of this PR and marketing strategy in every way. During the keynote address on the first day of this year’s very high profile summit he talks about how his father ran a small business and how he was heavily involved in it from the age of 12.

“It was a case of being surrounded by business owners from a very young age and learning the importance of putting the customer front and centre at all times,” he tells us.

“People should look at Sage and say: ‘we want to be the next Sage’,” he explains. “So that gives us a responsibility to be more successful. [It means] we need to take responsibility in terms of UK technology and to be more successful globally.”

It is a powerful message: Sage the former Northern small business – and big under-represented Newcastle success story ­– saviour of small businesses around the world. And it really does hit the zeitgeist in an age where entrepreneurialism is almost the new rock and roll.

“What is important to the North East and that powerhouse is not just STEM skills but also arts and creativity,” says Kelly in a different context but reinforcing the wider point. If a business can get to the heart of a community, it can nurture all the new talent emerging in its slipstream. That might be music, art, drama, or entrepreneurialism but whatever it is, and whoever the big Carnegie-esque patron is, they will both do well from the relationship. 

The big picture marketing push is likely to include more events like the summit and critically more social media. Kelly himself clearly loves the social side of things, is very active on Twitter, and when on stage invites attendees to take selfies with him. The extensive evidence of this can be found via the hash tag #SageSummit

“In the six months up to December for the whole company we had 30million social impressions,” he says, while the company generated twice that volume through half of day one of the summit. “We’ve landed!”

This big idea seems like a good one. His senior staff almost worship him and the stray journalists I encounter who have dealt with him through his successive different roles are very impressed. But the problem Sage faces is geographically disparate products and a collection of small business users, many of whom are resistant to change and frightened of ‘new-fangled’ ideas like the cloud.

To counter this, the company is not doing any compulsory on-boarding of its cloud services but has launched new cloud versions of existing Sage products to make evolution as easy as possible. These are aimed at businesses of a variety of different sizes, with packages for tiny startups with under 10 employees, paying around $10 a month, through to more comprehensive solutions for larger organisations with (at present the largest has) 27,000 employees.

“For the cloud at the moment revenue is probably not the critical indicator,” says Kelly. “It is subscriber numbers - we’re seeing a lot of momentum.” And while in the past Sage has also promoted growth via a number of acquisitions – this has been partly to blame for the geographically varied portfolio – Kelly says there will be “a lot of focus on organic growth”. Although he adds: “where it accelerates our strategy we would always look at acquisitions”.

“We’re not happy to stand still,” concludes Kelly “we always want to do more. Sage will become the global market leader in the movement of money (accounting, payroll and payments) for SMEs and will be recognised as their champion.”

This much is clear, the drive and dynamism are immediately apparent. Yet one core issue that the powers-that-be appeared to have in appointing Kelly is the fact he might leave too quickly. He has form on this at Micro Focus and the UK government. And so, on top of an annual salary of £790,000 ($1.2m), he’ll receive a stock allocation worth £987,500 ($1.5m) over a six-year vesting period [PDF of PR release].

This seems to offers a definite timeframe on delivery, and so while the company has come a long way in 10 months under Kelly’s stewardship, it will be intriguing to see just how big he makes it over the next five years. Perhaps the most obvious move is a music venue in London. Who knows maybe by 2020, Sage will be a household name like 02?


Read more about the Sage Summit:

Sage Summit: Accounting software buzz sweeps New Orleans

8 quirky things from Sage’s high profile summit speakers


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