The brainchild of a printer, a Nasa scientist and a computer student, it is now a global business valued at £3.5bn and has 6.3 million customers worldwide. Karen Dent speaks to some of the key players in Sage's story - and finds out about the Alan Sugar effect - as the software giant celebrates its 30th anniversary.
HE’S known to the current generation for his caustic: “You’re fired!” on BBC TV’s The Apprentice, but Sir Alan Sugar is indirectly responsible for ensuring that software company Sage survived a particularly rough patch during its formative years.
The Newcastle-based firm was teetering on the brink when Sir Alan introduced the Amstrad personal word processor, one of the first affordable pieces of equipment of its kind.
“In the summer of ’85, Sage was within days of going bust,” says Paul Walker, who worked for the company for a total of 26 years before standing down as group chief executive in 2010.
“I was on the phone to Lloyds, we’d had a delay in product launches, sales had dried up and we had no cash. Suddenly, Alan Sugar launched the PCW for £399 including VAT.
“We developed book-keeping software for it and that changed the business overnight. It was critical for Sage.”
Walker was number six on the Sage payroll when he joined in 1984 as company accountant and worked as finance director until 1994 before taking on the top job. He stepped down last year and was replaced by Frenchman Guy Berruyer.
The company – originally called Sage Systems, then Sagesoft before becoming known simply as Sage – was set up by printer and entrepreneur David Goldman, with Newcastle University student Graham Wylie and Nasa scientist Dr Paul Muller.
Walker says Muller was the catalyst that led to the formation of the company, which focuses on accountancy software, mainly for the SME market.
“Muller deserves credit – it was Paul Muller’s vision,” he said. “He was a genius. He’d been at Caltech in California and worked on the gravitational mathematics on the original lunar landing.
“He went on a world tour and somehow ended up in Newcastle in the mid-70s. He was such a visionary and went to the Government of the time and said he thought hardware and software were going to come down in price.”
Muller received a Government grant to set up a business designing software.
Walker said: “He recruited 18 software developers, one of which was Graham Wylie.
“They went knocking on doors and one of the doors they knocked on was David Goldman’s. He wanted software for his printing company, which they designed.
“You had a blend of David’s entrepreneurialism and Paul Muller’s vision. The business was created in 1981 and Graham was in the pool of developers.”
David Goldman died in 1999. His son Daniel is now a venture capitalist and managing partner of the Goldrock growth capital fund.
He said: “My dad built the business on the motto ‘We are just a marketing company that happens to sell computer software’.
“The foundations that were set in the early days are still very much the foundations of the business today – a focus on strong brand, high levels of recurring revenues (maintenance, software assurance, bespoke stationery etc) and strong market positions within the key markets.”
David was, says Daniel, someone who could barely use a computer. It was Graham Wylie who brought the hi-tech skills to the start-up.
“It was my first ever job. In fact it was my only job,” Wylie said. “It's well documented now that I wrote my first piece of Sage software while I was at Newcastle University, joining up with my great friend David Goldman.
“Like any small business, cashflow was always an issue. It was tremendously exciting, a terrific roller-coaster ride. Part of our good fortune was that we were there when the PC revolution started. I think that helped Sage.”
