Global business software firm Sage has been operating across Africa for many years.

But in the early to mid-2000s Sage also acquired South Africa’s Softline, resulting in the company strengthening its presence on the continent.

Despite the Sage acquisition in South Africa, though, the Softline brand remained in place until earlier this year.

Following the name change, editor of ITWeb Africa Gareth van Zyl has sat down with Sage ERP Africa managing director Jeremy Waterman to talk about developments at the company.

GARETH VAN ZYL: Earlier this year, Softline had rebranded to the name Sage. How has this been received in Africa?

JEREMY WATERMAN: I think for good reasons in South Africa, specifically, there were issues around the Sage branding, because of Sage Financial Services that had an untimely demise at that point in time. So, it felt that there could be some negativity around the name. So, for good reason, they kind of delayed that. If you think about it, it’s quite a long time: the Sage takeover of Softline was late 2003, and in fact the Sage takeover of Accpac International, which is where I came from, was in February, March 2004, which is a very similar time. So, if you think about it, it’s almost ten years; so, it was time... .Obviously from a global point of view, it’s fantastic news, particularly for my division. Because if you look at Softline as it was, VIP is a local technology company, and primarily in South Africa. And then Pastel was a local technology company, they had expanded a bit into Africa, but their brand image was from here. So, from their point of view, it didn’t really matter that much. But from our point of view, I was representing the three major products, which is Sage Accpac, and Sage ERP X3 and then Sage CRM: and all three of those are Sage’s global products, international products. So, by definition, you’re competing with the Microsoft’s, the Oracle’s, the SAP’s and you don’t want to go to the party as being a non-global brand when you’re competing with the guys that are the global brands, and I mean Sage is surprisingly big. If you define the market as an SMB market, or if you take out the tier one, Sage is the biggest player in the SMB and mid-market. So, it’s a very powerful brand to have. It was inconvenient not to have it, particularly in Africa. Because the French had been in there (Africa), and the English had been in there (Africa) with Sage 500... . and Peachtree from America had been imported and sold into places like Nigeria. Sage Pastel had gone in, Accpac was a big name, so, Sage had quite a good brand awareness in Africa.

So, it’s all good from our point of view, because now we have everybody combined and we’re starting to see some serious expansion. We’ve got the Sage office in Nairobi now, which is a reasonable size office, and then we’re pouring a fair amount of money into the Sage Lagos office. I mean we’re opening up an office of 500sqm in Lagos.

It will be interesting to see how important the global brand is when we’re in a place like Nigeria.

GARETH VAN ZYL: How does Sage’s operations in Africa differ to the West? Do you need a different mindset or approach?

JEREMY WATERMAN: Typically with the countries that we address with the products they go a tier up. So, whereas Accpac would be SMB, we think it would be more like almost a sort of mid-market (in Africa). Sage ERP X3 by definition in America would be strictly lower-mid-market. (For) us it’s mid-market, even burgeoning enterprise, because when you think about it, the IBM’s definition of an SMB is less than a 1000 computers. That’s not even mid-market: that’s SMB.

They don’t even go near enterprise. Whereas we in Africa will be talking to enterprise clients by our definition... .It’s just that African economies are not really that big. So, our enterprise is really America’s tier two, which I guess begs the question of why, if there is no tier one, why do the tier one players do so well (laughs)...

We believe the tier one is very limited, and there’s huge scope for a tier two product that hasn’t been that exploited. I mean if you can tell me what tier two products are there in the market? Worldwide there are quite a few, there’s companies like Epicor, there’s companies like obviously Oracle have got some tier two products, there’s Baan. But nothing particularly has got the impetus like an Accpac, or a Pastel or a SAP or an Oracle... Those brand names like Baan or Epicor: unless you’re in the business like I am, you’ve probably never heard of them. But they don’t have any critical mass in Africa, and that’s really where our huge advantage is -- Sage has got a massive critical mass: we’re a big company.

So, we’ve got a good company putting its weight behind a strong product in a market that typically hasn’t had that presence. And by any definition we are big, we’re currently 1,300 people. But certainly from a customer point of view, the fact that we are 1,300 people and we’re over a billion rand, we’re not insubstantial by any manner or means. We’re certainly the biggest player in that space.

And then of course in a recent development, I’ve taken over the Middle East (market) as well.

GARETH VAN ZYL: Talking about ERP, it’s a hot-topic in Africa. You’ve got partners in over 20 markets in Africa, is that correct?

JEREMY WATERMAN: Yeah, I’d say it’s somewhere around 25 or so. I mean basically we have a presence in all the non-French speaking countries. We have never really penetrated much into the French-speaking countries. Although obviously, Sage ERP X3 as a product has a presence in every country, but the French territories are run out of France and they have an export division, so has Portugal with Angola. So, we actually don’t have a single territory in Africa that is not covered by either ourselves, export or Portugal.

GARETH VAN ZYL: In terms of your operations then, which are your three biggest markets in Africa then in terms of your ERP and CRM offerings and why?

JEREMY WATERMAN: They vary, they yoyo a bit. But I would say certainly actually Nigeria is our biggest at the moment (outside of South Africa). I guess because that’s the biggest market...And I think our second biggest historically certainly is Kenya.

South Africa obviously is by far bigger. 70% of our business is in South Africa. 30% is outside (of South Africa). So, I mean it’s very significant.

GARETH VAN ZYL: Which three markets are your fastest growing in Africa?

JEREMY WATERMAN: Well, I would say Nigeria again is the fastest one that is growing... .Originally we had business partners in Nigeria and in the last year, we’ve had a dedicated person in Nigeria. So, we’ve had a presence there... and I guess that is why we’ve had the fast growth. Which is supportive of our decision to go in there.

GARETH VAN ZYL: The likes of MTN in Africa has launched a mobile ERP offering that uses SAP Business One. Could mobile become a burgeoning space for ERP software?

JEREMY WATERMAN: 

I think they’ve got some challenges. I think the whole hosting stuff has been very challenging...it will be interesting to see.

ERP is a tough space to get into. It doesn’t get any easier at the bottom or the top. Because even small companies are reasonably complex and they have very little expertise. And then big companies get more complex and have slightly more expertise...

I follow with interest. We have a mobile solution, which we host with Internet Solutions (IS), we’ve never gone really proactively public with it. It’s been more a question of choice: do you want to be on premise or in the cloud. Interesting enough, there is a very strong move in the US (towards the cloud for Sage products) -- Sage 300 (Accpac) is now being put very aggressively into the cloud. Your challenge with putting something like that into the cloud is that you’ve got the product, and then the challenge is to almost make it self-deployable...and all that provisioning stuff and then it automatically goes through to a billing cycle and then the other huge challenge is upgrades..

The challenge is to make an online thing scale. I mean any one can put up five companies, ten companies, or 20 companies. But to make this thing work you have to go 200, 300, 400 companies. Now to do that you have to have some very very smart IT, because you have to be able to notify people and you also have to make your upgrades very small so that it becomes like your windows upgrade.

GARETH VAN ZYL: So, moving an ERP system into the cloud, it’s a massive challenge then? It’s not something that can be done easily?

JEREMY WATERMAN: No, it’s hugely challenging. And it’s a complete paradigm shift. You have to start thinking completely differently.

GARETH VAN ZYL: What innovations could Sage be introducing in the coming months or even next few years?

JEREMY WATERMAN: We will be introducing hybrid cloud (offerings), along with mobility... .What we do know by this time next year is that we will have rolled out connected services to cloud and mobility and various solutions, it doesn’t have to be mobility.

GARETH VAN ZYL: What do you do in your spare time?

JEREMY WATERMAN: That’s a very simple answer: play golf (laughs). Play golf and look after families.