Insight Bite: Can CakeHR Help Sage Transition to Cloud?

More than half of British businesses pay their staff through Sage’s software, making the firm Britain’s largest listed tech company.

But in recent years, Sage has struggled with the transition to cloud, and is now buying CakeHR to help drive its expansion from licence-based accounting software, to a broader subscription-based offering.

CakeHR seems to be an ideal accomplice in this mission. The firm was founded as a solution to cumbersome on-premises HR platforms, and has built award-winning software that deals with processes like leave management, attendance tracking and payroll on the cloud, using automation.

Cake’s 27,000 users around the world will now be offered Sage’s range of services from directly within the platform, and Sage will integrate CakeHR’s offering in early 2020.

“Building and acquiring great technology to help accountants and businesses focus on what matters most is a critical part of Sage becoming a great SaaS company.” said Lee Perkins, Chief Product Officer at Sage. “We have been hugely impressed with the people and technology at CakeHR, particularly their ability to enable employees to self-manage.”

Along with acquiring new companies in its transition to cloud, Sage is offloading non-core services. The CakeHR announcement comes only days after Sage revealed an agreement to sell its Sage Pay operation to global payments company Elavon, and two months after the announcement of the acquisition of automated data entry software firm AutoEntry.

The purchase of both AutoEntry and CakeHR will significantly bolster Sage’s Business Cloud offering, making it more appealing to accountants, bookkeepers and other small businesses in a market that is gradually being transformed by cloud, big data, advanced analytics, and automation.

As on-premises software is being phased out, demand for cloud-based business software that effectively incorporates this new technology is growing, creating a dynamic market for mergers and acquisitions.

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