Sage has been a rock steady player in the UK accounting software market for more than 30 years, whereas Xero is still seen by many as the new kid on the block. That isn't to say one is better than the other, they are both strong players.
A key function on Xero is it's ability to feed in automatically transactions directly from your business bank account, to speed-up checking and allocating your expenses and incomes. This is particularly useful if your monthly transactions are in the several hundreds to thousands.
Both Sage and Xero now have cloud based options, also known as software as a service, whereby you pay as you go on a monthly user subscription.
