US consumer confidence falls as inflation expectations rise – business live | Business
Historically Sage was a ‘steady-eddy’ business built on a license sales model, where most of the contracted cash came up front with high margin servicing and maintenance income rolling in over the term of the contract.
“In recent times its market has been disrupted by cloud computing as clients look to access applications on any internet-enabled device and this has led to volatility in the share price.
“Even if users stick with Sage’s cloud offering, the shift away from licences typically diminishes upfront revenue and cash flow, and requires significant investment.
“This in turn drags down growth rates in the near term even if it produces a typically reliable subscriptions-based income stream over time.
“Plus Sage operates in a competitive marketplace and has plenty of rivals who were ‘born in the cloud’ and therefore don’t face the same painful…