CEO Guy Berruyer continues to make his presence felt at Sage, the UK’s biggest software company and its only global top-10 business applications provider. When M Berruyer took over as CEO a couple of years ago, one of his biggest decisions was to exit Sage’s north American healthcare business – a business line which had long been criticised by investors and media as a bad fit and strategic cul-de-sac for the company. He has now divested Sage of its well-known CRM products, ACT and SalesLogix, which are to be sold to Swiftpage, an email marketing company (and Sage 2012 partner of the year).

Sage paid $260m for Interact Commerce, the ACT and SalesLogix owner, back in 2001, but is getting rather less than $100m back (precise figures were not released): it could fairly be said that its venture into CRM has not been a great success. Since the CRM products were acquired, the world has moved on – in particular, embracing the Cloud. Sage’s online version of the once-ubiquitous ACT contact management system was not a great success, and its Cloud version of SalesLogix was never rated as highly as newer SaaS products – overshadowed by the mighty Salesforce.com and Microsoft’s Dynamics CRM, in particular. Sage does have other CRM products still in its portfolio.

At the same time – clearing the decks – Sage announced it is also disposing of another US business line, Sage Nonprofit Solutions, which sells systems for charities, to PE firm Accel-KKR, and that it has sold a clutch of minor product lines in France and Spain to Argos Soditic. Incidentally, and slightly confusingly, both Accel-KKR and Sage are now also investors in Swiftpage – Sage received a 16% stake in Swiftpage as part of this deal.

At last years’ investor strategy meeting, Berruyer and CFO Paul Harrison explained how they were re-evaluating Sage’s sprawling portfolio, built over the years and described by one commentator as resembling the periodic table of chemical elements.

The approach was to identify core and non-core business lines, in terms of fit with Sage’s core functions – described as accounting, payroll, ERP and related products (and it seems CRM is outside that core, in Sage’s worldview – something that might surprise its competitors) and in terms of value creation potential. They would then receive investment in R&D and marketing in three tiers of priority:  “invest” for those of high potential; “sunset” for those of low potential; and “harvest” for those in the middle. The products to be sold off were all already identified at that point as ‘non-core.’

In PAC’s view these disposals are unlikely to be the last, as the company refines its offering in its efforts to double its organic growth rate by 2015.

[Clients of PAC’s SITSI Research Service should note that our profile of Sage’s worldwide business is currently being revised and the new version should be available shortly].