Sage Off-Plan Customer Reinstatement
Blog by Doug Deane
Sage Off-Plan Customer Reinstatement
DSD was pleased to see Sage’s new promotion for encouraging customers to get back onto an active maintenance plan. This program runs through September 30th and some really interesting aspects that we’ve never seen before. The most interesting of those involves Sage’s offer of a new system license at a substantial discount from the suggested price, if a customer’s software version is 3 or more versions older than the current version. Any such reinstatements will be processed in a completely different manner than a “conventional” reinstatement.
How it Works
Off-Plan customers will now be categorized into two segments. Customers whose last shipped product is generally no more than two versions behind the current version (N-2) will be Segment 1 customers, and customers whose last shipped product is three versions (or more) behind the current version (N-3 +) will be defined as Segment 2 customers. See the second table below for a list of the affected ERP products, and for the exact versions that qualify for Segment 2 pricing.
There is no change in pricing and processing reinstatements for Segment 1 customers. These customers will pay for lapsed maintenance coverage and purchase one year of M&S moving forward. However, reinstatements for Segment 2 customers will be treated as new license sales but at a huge discount from the suggested list price. Segment 2 customers will purchase the current version of the product at the discounted price and one year of M&S moving forward.
Pricing for Customers in Segment 2
Customers in Segment 2 will receive a minimum of 50% off the New License SLP when purchasing the mandatory one year of M&S moving forward. The M&S plan price is based upon full New License SLP. Customers can earn a higher discount if they purchase one year of M&S but commit to a two year or three year plan. Customers are not required to pre-pay for years two or three but must sign a contract allowing Sage to automatically renew their plan in year two and/or three. This table summarizes the benefits:
|M&S Plan Commitment||Product Price|
|1 Year||50% discount off New License SLP|
|2 Years||55% discount off New License SLP|
|3 Years||60% discount off New License SLP|
Note: Discount off New License SLP cannot be combined with any other promotion and applies only to customers coming back on plan for the same product platform. Discount off SLP does not apply to Additional Users or New Module purchases.
90 Day Grace Period
For customers already in Sage’s registered pipeline, Sage will honor the traditional reinstatement pricing through July 23, 2010, since many of these customers are working through their approval process based upon prior pricing. The lapsed maintenance fees will be used as the adjusted SLP for the New License product orders and New License margin and tier will be applied. The one-year M&S plan will be processed as usual.
Participating Products and Customer Segments
The chart below provides the participating products for this promotion and the versions that determine the applicable segment for each customer.
|Business Unit||Product Line||Standard Reinstatement
Does not qualify for promotion
Qualifies for promotion
|Last Version Shipped (N-2)||Last Version Shipped (N-3 +)|
|Accounting Solutions||Sage Accpac||V 5.6, 5.5, 5.4||V 5.3 or Older|
|Sage MAS 90 and 200||V 4.4, 4.3, 4.2, 4.1||V 4.05 or Older|
|Sage MAS 500||V 2010, 7.3, 7.2, 7.05||V 7.0 or Older|
|Value Products||Sage BusinessVision||V 2010, 7.3, 7.2, 7.1||V 7.0 or Older|
|Sage BusinessWorks||V 2010, 2009, 8||V 7 or Older|
|Sage PFW||V 2010, 5.7, 5.6, 5.5||V 5.4 or Older|
|Sage Pro||V 2010, 7.5, 7.4||V 7.3 or Older|
|Non Profit Solutions||Sage MIP Fund Accounting||V 10.2, 10.1, 1.0||V 9.0 or Older|
|Sage Fund Raising 50||V 8.1, 8.0, 7.0||V 6.0 or Older|
|Specialized Business Solutions||Sage Abra Suite||V 9.0, 7.8, 7.7||V 7.6 or Older|
|Sage Abra SQL||V 10.0, 8.5, 8.4||V 8.3 or Older|
|Sage FAS||V 2010.1, 2009.1, 2008.1||V 2007.1 or Older|
|Construction & Real Estate Solutions||Sage Timberline Office||V 9.7, 9.6, 9.5||V 9.4 or Older|
|Sage Master Builder||V 15.1, 14.2, 13.3||V 12.0 or Older|
Some Observations and Recommendations
We’ve run through some upgrade scenarios with MAS90 4.05 and 3.71 upgrades. Both of these versions qualify as Segment 2 upgrades under the New License rules. We have not looked at any of the other affected Sage ERP products. We were disappointed to find that an off-plan reinstatement for a 4.05 system would be significantly more expensive for an end-user than the old plan, which was to charge for back maintenance fees and penalties. It was, in fact, about 30% to 40% higher than the “old” reinstatement plan, depending on how many years of future maintenance the end-user commits to.
DSD found that for a MAS90 3.71 reinstatement, the new plan is only a few percent higher than the old reinstatement plan, which we think is easily justified. The breakeven seems to be between 3.6x and 3.7x reinstatements, which means that the new plan will significantly benefit any 3.6x and older end-users who are off-plan.
Despite the fact that a reinstatement might be a bit more expense for MAS90 3.71 end-users under the new Segment 2 reinstatement plan, DSD believes that they would still benefit significantly from it. Getting back on a maintenance plan breathes new life into an ERP system. It allows end-users to benefit from all the advancements and new features in the current software, and it restores their relationship in good-standing with Sage. This is important for Windows 7 compatibility, and because it restores an end-user’s access to Sage Online and to the Sage End-User Communities.
We certainly urge all 3.7x and older off-plan end-users to get back on plan while this promotion lasts. It is announced to be active through the end of September, and it’s not known if it will be extended past that date. This is an exceptional way for them to receive a new MAS90 system at a fraction of the suggested list price, and (for most) at a fraction of the cost it would normally have been under the old reinstatement plan.
If a 4.0x off-plan end-user must get back on a current maintenance for compelling business reasons, then they will be paying a premium to do so, compared to the cost of reinstatement under the old plan. Our hope is that the new plan doesn’t incent 4.0x end-users to hold off getting current. As mentioned, being on a current maintenance plan is critically important to the health of any end-user’s ERP system, and to its functionality.
DSD applauds Sage for constructing a reinstatement plan that benefits their business partners, benefits their end-users, and benefits Sage.
Doug Deane is President of DSD Business Systems, a national provider of on-demand (cloud) and on-premises ERP and CRM software, specializing in wholesale distribution, manufacturing, warehouse management, inventory, business intelligence and eCommerce software. DSD offers Sage 100 (formerly MAS 90), Sage 300 (formerly Accpac), Sage 500 (formerly MAS 500), NetSuite, Sage FAS, Sage HRMS (formerly Abra), Sage CRM, Sage SalesLogix, Extended Solutions, and Custom Programming.