Sage is not your usual continent-straddling tech giant. It was founded just over forty years ago, not in a Silicon Valley garage, but a pub in Newcastle, at a time when Sir Clive Sinclair’s ZX81 was the just-launched cutting-edge of personal computing. Sage’s founder David Goldman was convinced small businesses would soon be in need of enterprise technology, and worked with a team at Newcastle University to develop accounting software, defining a category in the process. Goldman was not just selling SMBs a particular type of software—he was pitching the utility of digital technology in any shape or form, and the human support to make it useful.
“They spotted a problem” says Sage’s current CEO Steve Hare. “They wrote software to solve that problem, but they also provided support. That culture of having human beings to help you resolve issues as a small business has been in the company’s DNA from the beginning. We pride ourselves on innovation coupled with human interaction, because relationships matter.”
Goldman, of course, was on the right side of history, and today Sage is the largest tech company listed on the FTSE 100, with operations in Newcastle, Atlanta, San Jose, Barcelona and beyond. It creates cloud-based software, from accounting and financial to HR, payroll, and broader enterprise resource-planning, and is the third-largest supplier of ERP software in the world. In the UK alone, 43 percent of businesses pay staff using Sage software.
Despite growth, international expansion and acquisitions, that foundational commitment to small and medium business remains. And, says Hare, it keeps Sage closer to the business fundamentals of its clients.
“There has to be a level of intimacy with our clients’ needs,” agrees Sage CTO Aaron Harris. “It’s not enough to see a list of requirements—you’ve got to feel the emotions and understand what drives them.”
Those close relationships and that intelligence from the front line informs where Sage commits its R&D spend, which has grown 50 percent over the last three years.
“There’s a good channel of understanding between us and the customers, and that trusted relationship feeds into the innovation process,” agrees Harris. “When your customers trust you, they’re willing to go on the journey with you, to be early testers. And that starts with them believing that you are focused on helping them to become a more successful business.”
Harris joined Sage when it bought Intacct, the San Jose-based accounting software company he cofounded in 2017.
He says that while he had respected and, to some degree, feared Sage before the acquisition, he hadn’t understood how deep Sage’s culture of innovation was. “What I really discovered, and this was a real boon to me coming in as the CTO, was that the rest of the world didn’t give Sage credit for its capability to innovate and for the skills and the talent of the team. My job is closing that perception gap.”
Inevitably, AI and predictive analytics are now central to Harris and Sage’s innovation strategy. Harris says acquisitions such as TaskSheriff (Israel) and AutoEntry (Dublin) add a depth of specialisms to their existing capabilities and will help them achieve their ambition sooner. That ambition is to completely remove friction from SMB business-processes by digitizing business relationships end-to-end. “By allowing work and money to flow smoothly between businesses and everyone they need to connect with, we believe we can make life easier for SMBs—and everybody they touch. That includes suppliers, customers, governments and definitely their staff.”
For Hare, Sage’s continued commitment to small and medium businesses is also a commitment to the communities they create and serve. “Our purpose is to knock down barriers, reduce friction and create opportunities so everyone can thrive. Two thirds of all new jobs in the UK and the US are created by small and mid-sized businesses, not big business. And we all benefit if there is a flourishing economy around those kinds of businesses.”
In the US, Sage has partnered with the BOSS Network, a digital platform for Black female entrepreneurs, to create the Sage Invest in Progress Grant. The programme will award $10,000 in funding, as well as provide mentorship and training to 25 Black women founders every year for the next three years. “Less than 1 percent of Black women founders get VC funding while the figure is 50 percent for white males” says Hare. “We had 11,000 applicants within two weeks of opening for applications. That access to capital is a big problem.”
Given the company’s roots and continued presence in the North East—it is still headquartered in Newcastle—it’s no surprise that it has a particular commitment to its local community. And Harris says Sage has a unique relationship with its hometown. “My background is in Silicon Valley and people come from all over the world to work there, but it’s not because they love it as a cultural place. But Sage is so tied to the North East. It’s a symbol of success for the North East, it’s embedded in the community.”
Sage is a vocal advocate of investment in the area’s tech industry. It is investing in educational programmes to promote digital literacy in the region through partnerships with Newcastle United FC and supporting increased STEM learning in local schools through FIRST© LEGO© League. “If we’re going to create diversity in technology, we’ve got to narrow the digital divide,” says Harris. “We’ve got to get to this new generation of kids, we’ve got to create excitement for women to go after a technology career; build a pipeline of talent that represents the customers we serve today and want to serve in the future.”
Sage calls itself a purpose-driven company. Which company doesn’t right now? But for Sage, that purpose is not a bolt-on or one that requires a radical shift in practice. That purpose was built into its founding principles, that small and medium businesses play a vital role in creating employment and opportunity in local communities. And that good technology, backed by the right support, can help those businesses survive and prosper. At least part of its mission now is to ensure that everyone has the opportunity to start, or be part of, that kind of business.
This article was originally published by WIRED UK
