A Rising Tide

Yesterday accounting software heavyweight Sage threw its hat into the 'online accounting' ring with the launch of SageOne.

The service, which comes in three editions (Cashbook, Accounts and Accountant Edition) is priced as a £5-10 per month subscription and offers a no-frills manual accounting system which will be hauntingly familiar to existing Sage desktop software users.

It's arguably an old-school approach which contrasts with what we're trying to do with FreeAgent. SageOne does not:

• have a particularly user- or task-centric design, preferring to stick to processes very similar to the desktop version
• offer a bank-statement derived cashbook, which is perhaps the single most important efficiency that can be introduced
• offer particularly comprehensive VAT reporting or online filing,
• integrate with anything else, so precluding any ecosystem of complementary software providers
• offer CT/SA/VAT live tax projections, payroll, dividend vouchers, mileage expenses, self-assessment reports, time-tracking, estimates, project tracking, recurring invoicing etc etc.

As a first step into the market, it faces competition like ourselves who have a four-year head-start, thousands of fanatical customers, no shareholder baggage and big fancy ideas about reinventing accounting. On a functional basis alone my view is that Sage is in for a rough ride from both competitors and users.

But actually I think it's a brave move, not a bad first offering considering the structural complexity of the Sage Corporate Machine, and I look forward to tracking its development. Hopefully they'll be working hard to evolve their product with the same passion that we have for continuous improvement.

It might seem odd to be cutting Sage as much slack as I do. After all they've had the same opportunities as we've had to understand the benefits of delivering accounting solutions online, and our development budget probably wouldn't cover the cost of window cleaning at the Sage HQ in Newcastle.

But I can't help but welcome them to the market with open arms.

SageOne is simple, a quality often underrated, and is resolutely aimed at the very low-end of the market on the basis of that simplicity and its pricing. For £5 a month for the Cashbook version, it doesn't need to deliver much incremental value to be accessible to a large cohort of sole-trader businesses who've not yet ventured online to handle their finances. Sage's name alone might well be enough to give them the confidence to dive in.

Those businesses, I reckon, will soon start bumping into the limits of what SageOne can handle. Having taken that first step in to online accounting, they'll then upgrade to FreeAgent - a more comprehensive service and a more streamlined user experience.

They say a rising tide floats all boats. Sage's entry into the market certainly floats mine.