No time out for Sage with Take Five buy
1 April 2005 | 0
Sage’s advance on the Irish accounts software market continues: In December the company finalised a deal to buy 100 per cent of GFK Technology Ltd., the developer and author of the Take Five accounting, retail and payroll software.
GFK and Sage Ireland are to work together on a series of marketing initiatives to promote the Take Five range. The combined number of customers is estimated to be upwards of 35,000. Sage Ireland managing director Liam Mullaney said that Take Five offered brand recognition, a reseller network and customer base. ‘GFK was of interest from our point of view because the particular niche they were in — the SME market — is our space,’ he said, adding that the buy was an opportunistic one. ‘It wasn’t a case where Sage were actively seeking them out.’ GFK had been on the market for some time, he added, and the sale process was concluded in less than two months. The price of the deal has not been disclosed.
Mullaney said that the deal would help Sage gain additional coverage in the channel, as there was a very small overlap with its own reseller base. ‘We believe we’ve got some of the best resellers in the country now. There is an opportunity for the Sage resellers to promote Take Five and vice versa,’ he told ComputerScope. ‘This end of the market typically isn’t about price, it’s about matching the solution to the business need. By offering a choice of Sage Line 50, Line 100 and Take Five, it puts the reseller in a position where they shouldn’t lose that business.’
It is not clear whether this deal marks the end of consolidation in the local accounts software market: Sage alone has bought a number of Irish companies in this sector over the past three years. The question mark is what happens if — or more likely when — Microsoft decides to get into the accounts market.
Existing players in the accounts software market are likely to feel some pressure in the near future as a result, but Mullaney denied that Sage’s latest acquisition was an attempt to brace the company for imminent competition. ‘Even if Microsoft weren’t coming into this space, we’d still be doing this; it’s neither an offensive move nor a defensive move. We want to grow the business,’ he said, pointing out that SAP is also entering the SME market with its BusinessOne product.
Mullaney claimed his motivation was formed by other considerations than outside competition. ‘My logic is, we want to give jobs to Irish people and make the company a substantial part of the Sage group worldwide. We’re not finished acquiring; we’re constantly looking to expand our customer base and product portfolio. I don’t see us just sticking with accounting software. Anything that helps to solve a business problem, be it in a vertical business sector, is of interest to us.’
Meanwhile Karl O’Leary of Quantum now reckons that his company is now the second biggest supplier of accounts software in the Irish market. The company distributes the Pegasus brand of software and according to O’Leary, it had been roughly neck and neck with GFK prior to its takeover by Sage. ‘It puts us in a stronger position because there are a smaller number of competitors out there. It means we’re not competing with a number of brands,’ said O’Leary.
He said his own company’s focus would be on keeping hold of its current customer base and targeting new customers. ‘There is a potential opportunity to visit Take Five sites looking to upgrade or migrate from their old software,’ he pointed out. O’Leary also spoke of the potential shakeup in the market if Microsoft decides to get involved, but he said that Quantum had no plans to acquire any competitors. ‘We wouldn’t rule it out, but it’s not something we’re pursuing actively.’