The Core Ingredients Fuelling Sage’s AI Momentum

Earlier this month, PAC attended the Sage Future for Partners event in Barcelona, where the software provider highlighted the launch and expansion of its offering, closer ties with partners, and how AI is the most transformative opportunity of our time.

With a core focus on the SMB segment, Sage is embarking on a journey to embed AI across every layer of its operations and product offerings. The company aims to make AI practical, safe, and trustworthy, ensuring that SMBs are not left behind in the digital revolution.

Contrasting many software vendors that are LLM-native, Sage is developing AI-native and AI-first capabilities. It has trained over 40,000 AI models to date, including an anomaly detection service launched in 2020 that has already generated billions of actionable insights. According to Sage, its models are 35x more efficient than traditional LLMs and twice as accurate as off-the-shelf alternatives. This focus on efficiency and accuracy is part of Sage’s “authentic intelligence” posture, i.e., AI that is transparent, explainable, and built for process and value-driven outcomes.

At the core of Sage’s AI strategy are five pillars: Sage Copilot, Sage AI, AI Agents, the Sage Platform, and “Authentic Intelligence.” These elements collaborate to deliver intelligent experiences for users. For example, the new Finance Intelligent Agent supports SMBs to optimize vendor payments by evaluating multiple parameters and providing clear explanations for its recommendations. Users can even instruct the agent to execute payments directly, streamlining financial operations.

Sage also announced the launch of a suite of developer tools under the banner of Sage AI Developer Solutions. This includes the Sage AI gateway, offering REST APIs and a Model Context Protocol (MCP) server to enable communication between agents and data sources. The Sage AI Agent Builder serves as a marketplace for developers to create and deploy custom AI agents, starting with Sage Intacct and expanding across the product portfolio.

The innovation engine is powered by the opening of its Barcelona Innovation Hub, home to over 400 AI experts and data scientists. The hub is central to Sage’s AI drive, rooted in European compliance and tailored to meet the needs of local and European markets. Products such as Sage Active, an AI-first, cloud-native business management solution, are already gaining traction across Europe, with over 50 partners onboarded and thousands of customers using the platform.

The partner ecosystem is a critical part of its FY5/26 growth strategy. In FY25, three partners onboarded more than 100 customers each, and standout contributors were recognized through the Platinum Club and regional awards. Partners such as Datel, Parthena Consultant, Eaton Square, and GoCardless are helping Sage scale its reach and impact. Sage’s Executive Vice President of Worldwide Partners, Gretchen O’Hara, who recently joined from Splunk, emphasized the company’s commitment to building a connected ecosystem, expanding through diverse partners, and enabling profitable, AI-differentiated business practices.

Internally, Sage is also using AI to elevate its own operations. For example, engineering teams have saved over 250,000 hours using Copilot, while sales teams are moving beyond traditional CRM systems, and marketing teams are launching campaigns in days instead of weeks. Even customer engagement is evolving, with live voice agents qualifying leads and scheduling demos. For example, Sage claims the AI Agent Conversion rate to be 4x higher than that of humans, with calls lasting on average 3 minutes compared to 6 minutes for humans.

According to the vendor, trust is a foundational element of its AI strategy. It introduced the Sage Trust Label, which it says is designed to provide transparency into how AI decisions are made, aiming to help customers better understand AI reasoning and feel confident in the technology. Additionally, the company reports that it is actively engaging with regulatory bodies, including the European Commission and the UK government, to contribute to discussions on digital compliance and evolving VAT regulations. For example, the firm will launch Sage Make Tax Digital (MTD) in April 2026 in the UK, to comply with HMRC’s Making Tax Digital for Income Tax requirements.

But, if you had to guess which industry Sage is making some of its biggest moves in, construction probably would not be your first pick. However, it is actually one of Sage’s most strategically important verticals. Sage Intacct Construction is now the company’s largest value-added reseller (VAR) and the second-largest vertical in North America, as well as the third-largest globally. In the UK alone, 11 partners are actively working with Sage Intacct Construction, with 8 having closed at least one deal. As a module within Sage Intacct, all innovations developed for Intacct benefit the construction sector (and vice versa). This cross-pollination ensures that advancements in construction can be leveraged across other verticals within the Intacct ecosystem and across products such as X3, etc.

Sage is enhancing its construction-specific offerings as part of its broader vertical strategy. In North America, the Sage Estimating module is transitioning to the cloud, enabling deeper and more dynamic preconstruction insights, such as those related to the subcontractor bidding process. Complementing this, the Sage Field Operations module streamlines the management of work orders and helps teams deliver better on-site services. Additionally, the Sage Intacct Real Estate module offers a comprehensive solution for managing property leases. These add-ons, currently available in North America, are now being prepared for expansion into Europe.

Looking ahead to 2026, Sage will launch Sage HCM for Construction, powered by its recent acquisition of Criterion. This solution will serve the US, Canada, and the UK, bringing more advanced HR and payroll capabilities tailored to the construction industry. The roadmap for Sage Intacct Construction includes AI-powered enhancements across preconstruction, operations, and insights. For example, AI will suggest optimal subcontractors, flag anomalies, manage drawings, and provide actionable insights across the suite through Copilot and AI Agents.

Regarding Sage X3, its cloud roadmap is a major focus of investment, with the goal of evolving the ERP for industries such as process manufacturing by cutting implementation time while keeping X3’s hallmark configurability through the release of X3 Cloud into early adopter stages over the coming weeks. Additionally, X3 is receiving Sage Copilot and new AI-driven features that have already proven effective in Sage Intacct. Most new customers are expected to utilize the public cloud, managed by Sage on a hyperscaler (Azure/AWS), although a private cloud option is also available.

As Sage looks ahead to FY26, the company is calling on its partners to fully embrace the AI era. Whether it’s expanding into HR and payroll, building vertical extensions, or leveraging Sage’s growing suite of AI capabilities, the opportunity is clear. As CEO Steve Hare puts it, “FY26 is the time to shift gears… to turn innovation into impact.”

In PAC’s view, Sage has long suffered from a lack of brand awareness, but this is about to change as it is mixing key ingredients to its recipe for success and brand equity, including AI-first innovation, vertical specialization, open platform strategy, partner ecosystem expansion, AI trust and transparency, global-local balance, customer-centric AI, and internal AI adoption.

Sage’s AI narrative not only sounds compelling, but it also feels authentic and well-thought-out. What really stood out is Sage’s clear commitment to the SMB market, actively offering SMBs a meaningful stake in the AI-driven digital transformation – a strategic move that reinforces Sage’s status as a competitive global platform provider in the SMB space, on equal footing, or even beyond, peers such as NetSuite, Infor, and Unit4.

Perhaps most compelling is Sage’s shift in focus, moving beyond AI simply answering questions to driving processes and outcomes, with explainability baked in. This shows clear confidence in their own AI models and capabilities.

These elements, as presented by Sage, suggest a strategic blend of technology leadership, industry focus, ecosystem strength, and customer trust.