It was set up in a Newcastle pub in 1981, its name coming from a poster of herbs on the wall - probably a better choice than Rosemary or Dill.

Printer David Goldman wanted an accounting programme for his business and asked student Graham Wylie to produce one.

These days the company is worth about £2.8bn and has 5,000 employees in the UK and across Europe.

Outperformed

The shares have been hit in recent months but have outperformed the rest of the sector and stand at about 228p.

The company floated in 1989 and 10 years later entered the FTSE 100.

Sage has two main revenue streams. It sells its software products and then it provides continuing computer support.

Its customer base is largely small businesses with no IT department of their own.

Paul Walker, Sage chief executive

The company has also had a strategy of expanding by acquisition, and has purchased a number of similar businesses in both Europe and the US.

Chief executive Paul Walker has been with Sage since 1984. He started as company accountant and rose through the business, becoming chief executive in 1994.

Last December Sage reported profits up 12% to £121m on turnover up 17% at £484m.

What do analysts think?

Lehman Brothers like Paul Walker's solid management style and the way the company has managed to outperform the sector.

Phillip Davies values the shares at 280p and recommends buying, but is concerned that Sage could get squeezed if companies like Microsoft move into the small business sector.

Bearish

Andrew Fisher at Gerrards sees Sage as a good cash generating business, despite the poor economic climate, and rates the shares a hold.

However, Mohammed Mayalla at Goldman Sachs is more bearish.

He thinks too much business is coming from computer support rather than the more lucrative software licences.

And with more than half its sales in the US, it could face stiff competition from rivals such as Intuit. He values the shares at 200p.