A Sage Software Partner Stumbles, and Microsoft Makes a Play for the Rest

Citing the economy, Dallas-based MIS Group went out of business in July.

With the collapse of one of Sage Software plc's biggest partners, Microsoft is trying to take partners and market share from its U.K.-based competitor in enterprise resource planning (ERP).

Dallas-based Management Information Services Inc., or MIS Group, went out of business in July. The company had been Sage North America's "Overall Business Partner of the Year" twice, including most recently in 2008.

The MIS Group cited the current bad economy as its reason for exiting the ERP business. "As a result of the current economic crisis, the lack of available credit and market circumstances beyond our control, we unfortunately are not able to be viable as a business and continue to service our customers," Robert Muir, MIS Group's chief executive officer, said in a statement.

MIS Group sold nine Sage products in Canada, Mexico and the central and western United States from offices in Dallas, Houston, Denver and Phoenix. The decision to close came after restructuring attempts failed. The company's senior secured lender assumed control and responsibility over the assets of the company, according to the company statement.

Struggling in the ERP and customer relationship management (CRM) markets right now is a familiar experience for Microsoft's existing 10,000 Dynamics partners. According to Microsoft's most recent Securities and Exchange Commission filing, Microsoft Dynamics billings dropped 13 percent for its fourth fiscal quarter -- which ended June 30 -- and dropped 7 percent for the full year.

Nonetheless, Microsoft, with about half of Sage's global market share, released a statement that attempted to use the MIS Group failure as an opportunity to gain some share. Microsoft pegged the MIS Group's demise to questions about "Sage's ability to deliver ongoing innovation and investment in its ERP portfolio and remain competitive in this marketplace," Crispin Read, general manager at Microsoft Dynamics ERP, said in the statement.

Microsoft has been offering financial incentives to partners to switch Sage customers to Microsoft Dynamics. The program, which began in May, offers price cuts and a 25 percent rebate on the cost of the Microsoft Dynamics software.

R. "Ray" Wang, vice president and principal analyst at Forrester Research Inc., notes in his blog that Sage has one of the best models in the industry, but the company is currently working through some partner issues.

"Their partners are looking for more investment in the product; they're looking for different mixes of products," Wang says. "Sage is just having issues communicating expectations with its partners."

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.