Independent NetSuite Application Review
NetSuite System CRM Review
By Martin Shifley, April 2008
Founded in 1998, NetSuite was the first serious provider of both on-demand ERP and CRM and has subsequently become the market leader for enterprise-wide hosted business systems.
The company's majority owner is none other that Oracle's Larry Ellison and the migration of staff leaving Oracle for employment at NetSuite has nick-named the on-demand vendor "Little Oracle". The staff, culture and drive between the two companies is not surprisingly quite similar.
NetSuite became a publicly traded company in December 2007. The successful public offering was described as a Smokin Hot IPO, raised about $161 million and granted the company a billion dollar market cap, however, since that time the stock has seen a significant fall. According to CEO Zach Nelson, “The IPO was something of a branding exercise for NetSuite. We want to be the SAP of the mid-market, but reaching all those firms is hard."
NetSuite's high growth has not been without growing pains. Product stability is questioned by many, the company has seemingly incurred the highest customer churn in the software as a service (SaaS) industry and the hosted delivery has incurred system downtime - which is particularly troublesome as the company has no backup for its services.
NetSuite's newest product edition is the release of NS-BOS, the NetSuite Business Operating System, a development platform targeted at ISV (independent software vendors) with vertical market expertise looking to leverage NetSuite's SaaS infrastructure. Whether this release is a reaction to Salesforce.com's Force or Platform as a Service (PAAS) similar strategy or even whether the development community at large is willing to leave behind open and industry standard technologies such as Java/J2EE or .NET for a proprietary environment is a significant question that will be answered over time.
NetSuite's competitive strengths include its broad front office and back office integration, an impressive e-commerce storefront add-on and a recognized brand. The company began with only hosted accounting software (the original company name was NetLedger) and more recently added CRM software. Accordingly, we find the company's back office software suite more competitive than its front office CRM suite. Competitive weaknesses include a difficult to understand user interface, clunky navigation and a portfolio of up-charges that can make your head spin. As NetSuite's average customer is less than 10 users and the company hasn't won any of the largest SaaS deals touted by Salesforce.com and Aplicor, the product's scalability has yet to be confirmed.
NetSuite faces varying competitors. The company shows reservation when choosing to compete in CRM-only sale opportunities. For those sale opportunities where they do choose to compete and which do not include back office, accounting software or ERP software, they generally run up against Salesforce.com more than any other single vendor.
For sale opportunities seeking both hosted CRM and on-demand ERP, the company may run into either Intacct or Aplicor. Intacct has no CRM software offering but partners with Salesforce.com while Aplicor is the only other middle market provider of both hosted CRM and ERP software applications.
Competing for enterprise hosted business systems is a battle waiting to happen. While NetSuite and Aplicor currently pursue these business opportunities, SAP has announced Business ByDesign as the company's entree into the on-demand ERP and CRM industry. SAP intentions for the software as a service industry are suspect by many. While the company 'announced' its Business ByDesign ERP suite in 2007, the hosted software solution still has not made it to market and Business ByDesign has incurred multiple steps backward. Once the product does eventually arrive, several question whether a sidebar business division of the software giant will be able to compete with the more focused and mature SaaS only solutions. Even SAP co-founder and Chairman Hasso Plattner, described SAP's prior CRM product release with disappointment. According to Plattner at an April 10, 2008 event, "We had a shitty CRM system." Others also question whether SAP's SaaS strategy is more of a defensive approach designed to slow down its client erosion going the way of SaaS or is a loss leader approach intended to acquire SaaS clients and then steer them toward the company's on-premise flagship product.
|We'll be performing another more detailed NetSuite software review and updating this page following the next release.|
2955 Campus Drive
San Mateo, California 94403
Telephone: (650) 627-1000
Zach Nelson, CEO NetSuite
Zach Nelson has more than 20 years of corporate leadership experience in the technology industry, where he has held a variety of executive roles spanning business development, product development and business strategy. Nelson has served as a director of NetSuite since July 2002 and as President and Chief Executive Officer of NetSuite since January 2003. Prior to the CEO role, Nelson served as the company's President and COO from July 2002 to January 2003. From March 1996 to October 2001, Nelson was employed by Network Associates (now McAfee), and held the positions of Chief Strategy Officer as well as President and CEO of MyCIO.com, a subsidiary that delivered on-demand software security services.
Under Nelson's leadership NetSuite's revenues have grown ten-fold and workforce has quintupled to more than 500 employees. Nelson holds B.S. and M.A. degrees from Stanford University.
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