The Saga of a Turnaround

"This place is jumping baby!" Michael Collins exclaims on a videotape, as the rollicking sound of the Brain Setzer Orchestra's hit "Jump, Jive,an Wail" fills the ballroom of the Hyatt Regency Hotel in Reston, Virgina. On this wintry day in January, more than 300 SAGA Software reps viewing the tape are transfixed as they watch the entire new marketing team, everyone from Collins, the senior director of marketing communications, down to the executive assistants, bounce wildly on a trampoline.

The playfulness is infectious: By the time the song ends, the salespeople in the ballroom are buzzing with excitement. Indeed, when the "live" Collins stops the tape, the crowd goes wild, applauding as long and hard as if it was watching the winning touchdown at the Super Bowl rather than its annual sales kickoff meeting.

Scenes like these might seem out of place in the relatively stodgy world of enterprise software. But they're the norm at SAGA, a company that not so long ago was far more staid than sizzling.

This is not the first time that the marketing savvy of Collins and his business partner, Tim Hill, has brought a fresher, hipper brand image to a struggling company. Before arriving at SAGA's Reston headquarters in August 1997, the two spent several years at Chantilly, Virginia—based software maker Falcon Microsystems, where they oversaw the company's repositioning from a third-party reseller of Apple platforms to a cross-functional solutions provider. In 1994 the two left Falcon to head up the marketing department at personal-storage manufacturer Iomega, rescuing it from near obsolescence with a brand-new product line and an aggressive advertising campaign. Under Hill's direction, Iomega made headlines with its consumer-oriented advertising and its impossible-to-miss presence at trade shows. Former Iomega CEO Kim Edwards, who hired the duo in 1994, says of Hill, "He's one of the strongest brand marketers in the country. When I hire people, I'm less concerned with their experience than with whether they have 'high beams.' Well, Tim has halogen lamps."

At Iomega, Hill and Collins nearly perfected a blueprint for brand reinvention that they're now successfully employing at SAGA. Their philosophy, which they repeat like a mantra, is to make every marketing dollar spent look like $5. As Collins puts it, "You don't have to be a billion-dollar company to market like one." Their three-step plan: Build a brand new marketing team, revamp an aging product line, and promote the new brand image as aggressively as possible.





a colorful duo

"Luuuuuke...I am yourrrr fatherrrr." Collins is leaning across the table in a Reston café, giving his best impression of the late Chris Farley doing Darth Vader in Tommy Boy.

Hill laughs out loud. Although he looks older and more solemn than Collins—who at 36 has the youthful, clean-cut looks of a student council president—Hill, 40, has the same playful streak. ("I'm a big Pearl Jam fan," he later tells a visitor to his office, proudly displaying the band's latest CD.)

This lightheartedness illustrates the color that the duo has injected into the company culture—color that was badly needed. When SAGA CEO Dan Gillis took over the company in 1997, it was known as Software AG Americas, the newly independent American arm of a large German parent. For 25 years the marketing strategy had remained the same, and the company had never even run an advertising campaign. Collins' and Hill's job was to change all that—and Gillis, having worked with the two at Falcon, had confidence that they could. "They really understand the discipline of marketing," Gillis says. "They have a proven methodology." With Collins' and Hill's help, the company has gone from distributing little-known mainframe software to making inroads in hot new technology sectors. Where once it lacked even a cohesive marketing structure, SAGA now has a new brand image, new products, and soaring sales. In the 20 months since Collins' and Hill's arrival, revenues are up 30 percent, to $249 million.

The key step in the duo's SAGA makeover was to reorganize the company's scattered marketing department into a single entity with five distinct sections, each responsible for a different aspect of the marketing effort. The product marketing team identifies product needs through market analysis and customer feedback, while corporate communications staffers spread news of SAGA to the press and analysts. Advertising is coordinated by the new marketing communications team. And marketing services, dubbed the Brand Police, is responsible for enforcing SAGA's new brand identity by making sure that all communications have a consistent look and message, from the logo to product information. Finally, the channel marketing group acts as the conduit between the sales and marketing departments, making sure that sales conveys a consistent message to customers.

Almost as important as reorganizing the department's structure was changing its culture. The company had always been content with the status quo; Hill says that a common complaint in the first few months was, "We've never done it that way before." For Hill and Collins, the first step in banishing this attitude was to assemble a new marketing team. "A lot of people will tell you that [success] is all about doing great work," Collins says, "but when it comes right down to it, it's the people that make the work great." The two focused on hiring marketers who possessed the creativity and enthusiasm needed to overhaul a culture. Several of these employees came from Iomega, lured by the opportunity to continue working with Hill and Collins. "I didn't know a lot about SAGA, but I knew Michael and Tim," says Dan Shirra, SAGA's director of channel marketing, who previously held that position at Iomega. "One of the key reasons for my coming to this company was working as a team with them."

For Hill and Collins, the key ingredients the new team needed were creativity, a strong work ethic, and above all, enthusiasm. But how to convince talented professionals with these skills to come to an unknown company? According to Hill, the two traded on their reputations. News of the turnarounds at Iomega and Falcon had spread through the high-tech community, and, as Hill puts it, "We used our past successes to pull them into the fold." As a result, the new marketing department comprises people who, according to Hill, "go to bed thinking about SAGA, because they're so jazzed up thinking about what they're going to do the next day or the next week, and they wake up and they can't wait to get to work."

Former Iomegan Scott Kempema is that type of person. At last April's IT Forum in San Francisco, Kempema, SAGA's director of marketing communications, hired a Broadway production company to stage a presentation of The Man in the Iron Mask, turning the plot into a metaphor for SAGA's new middleware products, which simplify gaining access to data stored in legacy systems. "For a company this size, and a company in this [market] space, it was very unique," Kempema says.

Kristina Cortés, director of marketing services, is another "jazzed-up" SAGA marketer. After more than two years with the company, Cortés, frustrated with its lack of direction, considered resigning in 1997. The arrival of Hill and Collins convinced her to give Software AG one more chance. Today Cortés is responsible for all of SAGA's marketing collateral, and she's the proud chief of the Brand Police. "This is a breath of fresh air," she says.

Apparently, not all former Software AG staffers were as happy with the change as Cortés was. There are hints that those who resisted the new guard were, as regional sales director Mike Lun frankly put it, "trimmed from the tree." Hill confirms that SAGA's turnover rate has been approximately 25 percent in the past year, a fact he dismisses as typical of a management shakeup. "People who like to be challenged, we're going to give them plenty to be challenged with," he says matter-of-factly. "People who don't—well, there's always a place for them, too. We all need mechanics, and postal workers, and laborers, just like we need executives and politicians."





new identity, new products

Hill and Collins both say that re-creating a team like the one they worked with at Iomega is their proudest accomplishment. But they knew that turning SAGA into a major software player would take more than aggressive marketing—the next step in revitalizing the company's image was to play down its ties to its former parent, Software AG, partly by developing its own product line.

In the fast-paced software industry, Software AG was something of a dinosaur: Founded in 1969, the company was a pioneer in the field of enterprisewide software for corporate mainframes, and its Adabas database management product and Natural programming language won it many blue-chip customers. But when the next technology wave, client/server systems, hit, the company began falling behind. Although Software AG was able to retain some of its largest customers, its lack of a focused marketing strategy kept its reputation lagging behind those of its competitors, which include Oracle, Computer Associates, and IBM. As Roy Schulte, an analyst with GartnerGroup, puts it, "You can't be halfhearted if you're trying to fight against Oracle." Indeed, Oracle spokeswoman Karen Houston says bluntly, "We don't consider Adabas at all in competition with Oracle's product—it's really not even up to the same level."

Clearly, Software AG desperately needed some new products. In recent years it began making inroads into the field of middleware. The company's first middleware product, EntireX, was launched in 1997. But as SAGA became an independent entity, it saw middleware's potential and decided to delve more deeply into the market.

This was largely brought about through collaboration between Hill's team and middleware expert David Linthicum, who was hired as SAGA's chief technology officer in December 1997. "David's team and my team have really been the change agents," Hill says. "If there's anything that's going to drive a company's new direction, it's going to be R&D, because [it develops] the products you've got to sell globally, and it's going to be marketing, because [it's] responsible for getting the spin and creating the demand worldwide."

Thus the concept of solutions-oriented middleware (SOM) was born. While SAGA press releases breathlessly call it "middleware on steroids," a more detailed definition is this: like traditional middleware, SOM enables easy access to information trapped in the mainframe. But according to Linthicum, SOM enables more information to be accessed more quickly.

The first project to come out of Linthicum's R&D lab, an SOM application called Sagavista, will be available in the second half of 1999. In the meantime, the company continues to market and distribute Software AG products like Adabas and EntireX, while Software AG has agreed to distribute Sagavista and the rest of the SOM family. Hill calls this arrangement "a beautiful business model": It maintains an amiable tie to the former parent, allowing SAGA to take advantage of Software AG's large customer base and international presence.

"SAGA is headed in the right direction," says Mike Gilpin, an analyst with the Giga Information Group in Cambridge, Massachusetts. "Sagavista is very much what customers are looking for."





aggressive promotion

As Linthicum is quick to point out, however, it's the marketing effort that will make or break the success of Sagavista. "If the marketing's not there, the technology doesn't win," he says.

But the marketing certainly is there, and SAGA fights to win. "We'll go to great lengths to get exposure," Director of Marketing Communications Kempema says. He should know, having come from Iomega, where Hill and Collins perfected the concept of promoting dull products in exciting ways. Many of SAGA's trade show stunts, such as providing attendees with the biggest and most noticeable tote bags, came directly from Iomega's event strategy. "It's a formula, and it works," Kempema says.

Part of that formula is creating advertising that emphasizes a brand rather than a product—a type of promotion rarely seen in the high-tech industry. Iomega's offbeat ads, such as one series that parodied different musical genres, ran on television and radio as well as in publications like Newsweek. At SAGA, under Kempema's direction, a similar ad blitz debuted in the fall of 1998. The company's new in-house creative team designed the campaign, which revolves around the tagline "Free your information," referring to the capabilities of SAGA's new middleware products. Each of the three ads depicts a symbol of freedom: A newborn baby drawing its first breath, the Statue of Liberty, and Russian workers dismantling a statue of Lenin. The ads have run in business and high-tech publications like Business Week and InfoWorld.

But SAGA's marketers are even more excited about their enhanced presence at industry trade shows. "We don't just show up—we come to dominate," Collins says. "It's all about looking larger than life." One of SAGA's most successful tactics, besides enormous tote bags and flashy theater productions, was scheduling a user conference in the same venue as the much larger IT Forum. This guaranteed that SAGA's 1,000 "evangelists" would circulate IT Forum's floor outfitted in SAGA promotional gear, spreading the word about the company's new products. SAGA also distributed logoed buttons, each printed with such slogans as "SAGA Rocks." Hill and Collins had successfully employed a similar tactic at Iomega, where the buttons were so popular that they ended up on the cover of USA Today.

At SAGA, Collins' and Hill's team again hungers for this kind of exposure, and a new public relations strategy focuses on giving it to them. Steve Ellis, SAGA's director of corporate communications, says that his main goal is to change journalists' and analysts' perception of the company. Before, he says, Software AG's tiny U.S. PR team returned calls but didn't take the initiative with the media; as for analysts, they went to the company's headquarters in Darmstadt, Germany, for information. When he first assumed his post, Ellis says, "I wanted to establish a new identity, but I also wanted to build credibility, so that SAGA would become a source for reporters even if they didn't write about us." To this end, his expanded team tries to respond quickly to reporters' requests for interviews or information. "They know that I will get them the highest-ranking person that it's appropriate for them to speak to," Ellis says. "I refuse to be the spokesperson."

Certainly, SAGA's marketers don't disguise the fact that media exposure is crucial to them. At the annual sales kickoff meeting, Hill discussed the need to "parade Dan Gillis and David Linthicum in the media," while new Vice President of Sales Gary Voight referred to "installing" articles in major publications.

Comments like these underscore the fine line between promotion and excessive spin. In fact, during the preparation of this article, SAGA's marketing team repeatedly attempted to take control of the accompanying photo shoot. Along with detailed suggestions for the setting, subjects and tone of the photos, the company sent a prototype of an S&MM cover, complete with logo and coverlines and emblazoned with Collins' and Hill's images. According to the photographer, the marketing team also insisted that the article was slated for the cover—something they had not, in fact, been promised. Ellis may call this approach proactive, but it's a potent reminder that marketing as effective as SAGA's is all about control—of the message and, if need be, of the medium.





"sales overnight, brand over time"

But overall, SAGA's is a success story, because all the hype, all the showmanship, and yes, even the attempts to control the media are backed up by real results. As the first half of the January sales meeting draws to a close, one thing is clear: SAGA is making its numbers, and it looks as though it will continue to do so as its new identity takes shape. As Collins puts it, his and Hill's ultimate goal is "sales overnight, brand over time."

Collins and Hill are relaxing in the Hyatt lobby. Outside the ballroom the salespeople, many still animatedly discussing Collins' video, examine the booths at the "mini—trade show" that's assembled there. The various displays outline SAGA's sales and marketing strategy, and a booth in the corner is distributing the 1999 sales "toolkits" for reps to take home. The largest crowds have assembled around the six Lucite boxes that are scattered among the displays. Each box contains a prize; among the offerings are a Sony Discman and a digital camera. The boxes are locked, but each toolkit contains a key that reps can use to try to open them. According to Hill promotions like this one help foster camaraderie between the sales and marketing teams, leading to a greater understanding of how the departments work together. "The whole concept is to make selling easier," he says. "And it worked. This is the most participation I've ever seen from the [sales] team in my tenure here."

Hill and Collins are pleased that the audience is beginning to seem as excited as they are about the changes taking place at SAGA. But neither one wants to take all the credit.

"I'm really proud of our team—" Hill begins, when Collins cuts him off.

"I thought you were proud of me," he says with mock jealousy.

Hill grins at his partner. "Well, I'm proud of you, too," he concedes. "But what makes me really proud is working with such smart people. It's exciting to see people spread their wings and do great work. You can replicate the model, but you can't replicate the people."