Sage moving ERP apps to Microsoft's Azure cloud

Customer demand for SaaS (software as a service) made this inevitable, analyst says

Following an ongoing industry trend, Sage Group is moving a number of its ERP (enterprise resource planning) software products to Microsoft's Azure cloud service, the company announced Thursday.

Initially, Azure ERP offerings from Sage will include the Sage 200 application in the U.K., and Sage Murano in Spain. "It has the potential to be worldwide, however at this stage it is in mutually agreed target markets with the initial focus of development in Europe," a spokesperson said.

The products are under development now, with pilot implementations scheduled "in the coming months" and a general release next year, Sage said. Sage plans to integrate the applications with Office 365.

Sage 200 and Murano on Azure will "be capable of handling thousands of customer instances and the interaction of tens of thousands of users," Sage said. Customers will benefit from the usual SaaS (software as a service) features such as subscription pricing and low upfront costs, according to Sage.

The announcement reflects another instance of "co-opetition" in the tech industry, as Sage 200 incorporates Microsoft technologies and Microsoft's own Dynamics ERP software competes with Sage for small and medium-size businesses, and is also going to be available on Azure over time.

Sage's North America division is also targeting Azure, with plans to deliver a service later this month, according to spokeswoman Melody Chalaban. Further details weren't made available. Other services are planned for down the road, Chalaban added. The timing of those plans reflects the decentralized nature of Sage Group's corporate structure.

In many markets, Sage will go up against ERP companies such as NetSuite and Workday, both of which were built from day one in the cloud, although the latter vendor is aiming at large enterprise customers of late.

Every ERP vendor is being forced to define a SaaS strategy of some sort due to sheer customer interest, according to Forrester Research analyst China Martens.

"Sage has been debating various directions to take -- partner, acquire, try to package up its own development platform -- and, with a wide portfolio of products, will likely adopt several different strategies," Martens said via email.

"For instance, the vendor has gone down the hosted ERP route for its SMB Accpac ERP and is looking at a cloud offering for its upper mid-market ERP X3," Martens added. "We'd expect Sage to partner with a number of [platform as a service] players determined by the architecture of its various ERP products."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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