How will Sage's pricing changes affect you?

Posted by B/P News & Notes on January 23, 2018 at 4:36 PM

How will Sage’s pricing changes affect you?Sage changed their software’s pricing structure in 2017 with the introduction of Sage 100c – a Subscription-based version of Sage 100. Now, in 2018, Sage has created a strategy that attempts to motivate Perpetually-licensed Sage 100 customers to move to the new Subscription-based 100c. This applies to customers who own, rather than rent, the software and who have a current Sage Business Care Plan. It’s important that Sage customers educate themselves about what all of this means and how it will affect their Sage 100 solution over the next two years. This post is an effort to help with that education.

First things first: Sage 100c is not a cloud-based solution...even though it will soon be called Sage 100 Cloud. Whether you have Sage 100 or Sage 100c, both software options reside on a server you own or designate.

Second, do not be alarmed. You do have options regarding Sage's pricing changes, but it is important to understand what is coming over the next two years as it relates to these choices and the new Subscription Pricing model. Ultimately, each Sage customer will likely be contacted by Sage directly, and their messaging might sound confusing, pushy, and as though you have no choice but to move to the new pricing model. In these instances, we recommend that customers tell Sage they are working directly with their reseller to understand the migration options. To that end, here is the critical information we think you need to know:

Your company may fall into one of three categories, depending on your 2018 Sage Business Care Plan Renewal Anniversary date:

  1. January-February: Accounts with plan dates in these two months are eligible for Parity Pricing, meaning that they can migrate to Sage 100c for the same price as their Perpetually Licensed renewal. This applies for Easy Pay customers who pay monthly, as well.
  2. March-April: The only available promotion for accounts within this timeframe applies to Easy Pay (monthly payments). Sage will offer the price match, but it must be processed prior to the renewal month.
  3. May-December: Renewals within this timeframe qualify for $0 migration and the Easy Pay pricing match.

What does it mean?
Sage has put together each of these options to motivate you to migrate to the ‘C’ line (Sage 100c) at no penalty, and in some cases at a reduced annual cost. This new pricing is subscription-based, and payment is made at annual or monthly intervals. Continued use of the software is bundled together with your Sage Business Care Plan with Silver or Gold Support in a new, single-subscription cost.

What is the difference between Sage 100c and the Sage 100 software you’re using today?
Not much. Sage has added a new user interface and made available a number of ‘Connected Services’ that add functionality from third party providers. Yet it’s essentially the same software with the same functionality. While there are additional features in the 2018 version of 100c, they are primarily the same features that would be available in the Perpetually Licensed model you are on today if you were to upgrade your software to version 2018. Sage 100c does have third-party integrations that allow you to test various functions (such as Accounts Payable Entry and Payment Automation), but for the most part those third-party integrations are still a separate purchase from Sage 100c.

What is the risk of moving to Sage 100c?
Mainly, it involves use of the software if, for any reason, your company elects to stop paying the monthly or annual subscription fee. If non-payment occurs, your software will switch to a ‘Read-Only’ mode that will not allow you to enter any new data into the software after 21 days from the non-payment month or year.

What if you do nothing? Is there a catch?
First and most importantly: If you do nothing, your software will continue to operate as it does today; regardless of your version.

The catch is that, if you do nothing, you can expect a 20% price increase in your annual Perpetual Licensed Sage Business Care Plan in 2019. For example, if you pay $2,500 annually for your Sage Business Care Plan in 2018, you will pay $3,000 for the exact same plan in 2019. In addition, you can expect a 20% increase every year until you move to the Subscription Pricing model. Sage, like all software companies, wants to move their customers to a predictable Subscription Pricing model. The recurring revenue creates less financial volatility for the software publisher.

As a Trusted Advisor in the business technology space, we’re here to help you weigh your options as your company makes the decision of whether to stay on the Perpetually-licensed Sage 100 or move to the Subscription-based Sage 100c. Please feel free to reach out to us with your questions.

Topics: Sage 100c

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