Sage's rapid ascent in the global cloud services market is being engineered right here in the North East

Three years in to trading, Tom Keighley finds out more about the success of Sage One

Working at Sage One, at Great Park, Sean Myers, left and Mike Goodwin
Working at Sage One, at Great Park, Sean Myers, left and Mike Goodwin

Cloud services now dominate talk in the technology sector and in 2014 the market for them reached an estimated $158bn.

In the North East an office of 100 of the brightest minds in software development are hard at work leading Sage’s charge into the marketplace.

Just three years into its existing Sage One, the software giant’s cloud-based accounts solution, is making waves in the small business market. In the 12 months to March this year, subscriptions to Sage’s sexiest product to date trebled to 33,000 worldwide.

“What works in desktop software doesn’t necessarily work in the cloud,” explained Sage One content and social media specialist Paul Lancaster.

“Of course, Sage has always been a major international player, but it didn’t traditionally attract regional micro and small businesses. We recognised entrepreneurs don’t want to spend time on accounts and payroll – they wanted to spend time doing the exciting things associated with growing a business. Sage One launched in 2011 with the aim to bring Sage closer to start-ups.”

The division’s rapid growth has been fuelled by customers new to Sage, owner-managers who were hungry for a slick accounts solution they can access on their smartphone or tablet, while on the move.

Of the 100-strong Sage One workforce, based out of the FTSE100 firm’s Great North Park headquarters, 80 are developers – constantly evolving the product. The product is pieced together using agile development – a method which involves constant iterative building and reworking of its functions – while it is live and being used by subscribers.

Written in ‘Ruby on Rails’ one of the newest web development frameworks which uses the Ruby programming language, Sage One has been built totally from the ground up – in response to Sage’s engagement with the start-ups and small businesses.

 

Paul added: “The people we have at Sage One really are the best of the best. The agile approach means we’re constantly tweaking and evolving the product while customers are using it. It means we need top people to find the solutions which keep the product running while we’re re-engineering it.”

From Newcastle the developers are creating a global platform which must cater for the intricacies of many local layers of legislation, and currency differences.

It means Sage One must constantly respond and update to accommodate detailed changes in legislation and practice across hundreds of countries.

The whole approach to selling Sage One is very different from that of its desktop-based older siblings. Young, hip entrepreneurs are important to Sage One’s marketing activities which plays on the sexy part of business.

Paul explained: “The marketing for Sage One has been fantastic to work on because we’re experimenting so much. A lot of it has been about content, and adding value for customers or potential customers. That means using Sage’s deep knowledge of business to offer advice and inspiration.

“Our strapline has been ‘you can start and grow your business with Sage One’ – and it’s very true.

“We’ve done a lot to immerse ourselves in the start-up landscape, particularly in the North East with sponsorship of Campus North. That’s personally been fantastic for me – being involved in such an exciting culture and being able to use Sage’s years of expertise to grow businesses. It’s not that common to be able to get experts from an established firm like Sage into mentoring and support roles with young entrepreneurs.

“We think its really important to be part of the business eco-system.”

Elsewhere Sage One has sponsored Gateshead’s Thinking Digital Conference – the bleeding edge take on technology which brings top international thinkers to the North East, and more recently MADE festival in Sheffield – the yearly entrepreneurial smorgasboard of ideas.

Sage, at the Great Park, Gosforth
Sage, at the Great Park, Gosforth
 

The activity is part of a strategy to attract customers at an early stage in their business’s lifecycle so they grow and continue to subscribe to Sage products. Paul explained: “Sage One is about more than just being a software product. It’s about the all-round service and our enthusiasm for small business. The team is built with people who really want to help grow small firms, on their own doorstep, and further afield.

“If we can make accounting and payroll an easy, efficient process for businesses – they can concentrate on the creative requirements that make starting and growing a business so interesting.”

It is estimated that over one third of FTSE100 companies use Sage products. But where does Sage One, with its fast access, easy-to-use interface, leave the legions of loyal accountants?

Paul added: “Accountants have responded really well to it. Because Sage One allows the business owner to get involved and take care of many basics, it frees up the accountant to offer more advanced services.

“Accountants that we work with say they have been able to extend their business consultancy and strategy advice to clients – which is great because that stuff really helps early-stage business to accelerate their growth – and make it sustainable.”

And the Newcastle Sage One team are not working in isolation. Earlier this year the team were awarded the grand title of Google Apps Premier Technology Partner – one of only a select group across the world.

The status comes in recognition of Sage One’s work to integrate its functions in the popular Google Apps for Business suite, and also sets the stage of further work with the technology giant. It means functions like invoicing are automatically backed up to Google Drive.

Paul added: “We’ve been working directly with the Mountain View headquarters, and for a Newcastle outfit to be working at that level is tremendous. It’s really testament to the skills we have and are developing here in the North East. Achievements like this are not only good for us a business but also have the power to put our region on the map.

“It also helps us grow our influence to attract the very best developers to Sage One.”

Sage, at the Great Park, Gosforth
Sage, at the Great Park, Gosforth
 

Sage UK and Ireland chief executive Brendan Flattery is similarly keen on fostering the firm’s place in the North East tech community.

He said: “The North is home to a wide talent pool of skilled business people and entrepreneurs and we are proud to be part of the community here. We’re a company with heritage and experience but that doesn’t mean we’re standing still.

“This heritage helps us to understand our customers. We were once a start-up, founded by an entrepreneur who had a business problem to solve. And he did this through developing innovative technology to automate estimating and accounting for his print business.

“He realised other businesses could benefit from this innovation. So Sage was born. And we have thrived on developing innovative technology to help customers solve business problems, become more efficient and support their future success.

“Cloud and mobility are key to helping us to deliver simple, collaborative and user-centric software and services for our customers. We’re doing great things with online software like Sage One for start-ups and SMEs and Sage 200 Online for growing businesses.

“We are also working with some fantastic companies across the North East, the UK and globally for example Google , Amazon and Yahoo to name a few.”

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