Sage’s hidden SaaS Accounting Gem

If you’re an international company  planning a US launch of a product, the UK is often used as a testing ground.

But what to do when the UK is your main market?

Sage released a dire web-based (and I use the term loosely) accounting system called Sage Live in January this year which was pulled within in a month of launch due to security issues with it that were flagged up on this blog.

Sage own a South African company called Softline which in turn own a company called Pastel. Pastel have a wide range of accounting products for the South African market and I’m told by the accountants we work with that they’re actually quite good.

In May this year, Pastel launched “Pastel MyBusiness Online“. They’re still working on improving the product and haven’t pushed the marketing boat out in any big way just yet. The design of the site shows traces of coloured abstract shapes Sage are using worldwide in their branding. If you have 10 minutes to spare, you can watch this video presentation from the launch:

I’ve not taken a thorough look at the software (I’ll leave that to Ben Kepes), but from what I can see it appears they’ve written it from the ground up specifically for the web. It has a nice uncluttered  interface and is available on a monthly subscription of around £12 per month (14o SA Rand).

In terms of functionality it seems pretty limited, especially in comparison to the many features in KashFlow, but it does cover the basics.

I’ve written on this blog before that Sage can’t do SaaS in-house because a) it’s not in their DNA – desktop programming skills and mentality don’t transfer to the web and b) it cannibalizes their existing business model. My proposed solution was for them to have a separate company set up specifically for developing SaaS. Fund it well but leave them alone.

It seems Sage already have that in Pastel.

So the only question remaining – why aren’t Sage taking Pastel MyBusiness Online and pushing it to the UK market? It looks like a half-decent product, true multi-tenanted Software as a Service and not the half-baked approach they’re using for SaaS CRM.

I suspect the answer is simple. In a company the size of Sage the left hand sometimes doesn’t know what the right-hand is doing. Perhaps Sage aren’t even aware that they already own a capable SaaS development team and an apparently respectable attempt at SaaS accounting.