NetSuite 11.0 Takes Aim at Midmarket
NetSuite launched the new version at the Oakland Coliseum here, home of Major League Baseballs Oakland Athletics, one of NetSuites prominent midmarket customers.
NetSuite is a package of standard business applications used by most large and midsize companies, including financials, CRM (customer relationship management), inventory tracking, e-commerce, purchasing and others. These are the same kinds of applications sold by SAP and Oracle to large enterprises that often spend millions of dollars to buy and install them on their own premises.
NetSuites applications are sold in the on-demand model in which customers access the software on NetSuites centralized Web servers over the Internet, rather than buying the software and installing on their own premises.
The lower cost and reduced complexity of the on-demand model is what NetSuite CEO Zach Nelson says will allow his company to win over midmarket companies. SAP, Oracle and Microsoft are mainly paying lip service to the software-as-a-service model because of their huge investment in on-premises software, he contends.
Even Microsoft, whose Dynamics accounting, financial and CRM applications are directly marketed to SMBs (small and midsize businesses), require customers to also install layers of costly Microsoft operating system, database and application server software, Nelson said.
SAP and Microsoft like to give the impression that midsize customers will be able to assemble the ERP components they need as easily as snapping together plastic building blocks, Nelson said. But the resulting architecture will look more like a plate full of spaghetti, a Gordian jumble of poorly integrated conglomeration of software that is difficult to use and expensive to support.
Bruce Richardson, chief research officer with market research firm AMR Research in Boston, said NetSuites midmarket strategy has a good chance of succeeding.
The availability of an on-demand application suite that includes financials, accounting, "light ERP" and CRM "is really a compelling story" that is going to get the attention of midsize companies, Richardson said.
"SAP has publicly established the goal of getting to 100,000 customers in the next four years," he said. It currently has about 32,000, and if it has any chance of finding 68,000 new customers "its going to have to go down market," he said.
"SAP will be really surprised when they come down market and find there are a lot of good companies," such as NetSuite and Salesforce.com, already there, he said.
Compared with Salesforce.com, which has been a media darling for the past several years, NetSuite is "the best-kept secret in the software market," Richardson said. But it could be NetSuites turn to shine if its midmarket push gains significant momentum, he said.
With the release of NetSuite 11.0, the company is offering two new midmarket verticals, the NetSuite Wholesaler/Distributor and NetSuite Services Company editions, which give midsize companies access to industry-specific features through the software-as-a-service model.
The Wholesaler/Distributor Edition provides ERP, CRM and e-commerce features best suited to serve this verticals business cycle, from lead generation through sales, warehouse, inventory management and shipping.
The Services Company Edition provides ERP and CRM features to consulting and professional services companies that enable them to manage client projects and business operations without having to assemble the expensive custom software and hardware platforms that are typical in this vertical.
NetSuite 11.0s new AJAX-based user interface provides new reporting, dashboard, graphing and scheduling features. AJAX also enables Excel-like drag-and-drop list editing that simplifies data access and data compilation.
NetSuite also announced SuiteScript, a set of tools and APIs that allow users to add custom business processes and transactions to their applications. SuiteScript enables users to customize both the standard and vertical NetSuite applications to react in specific ways to updates to existing records or the addition of new records. For example, customers could use it to set up a specific discount approval process or a bill collection escalation process that is triggered when bills are outstanding for a specific number of days.
SuiteScript is built into NetSuites existing NetFlex customization and information integration platform that the company released late in 2005 and works with the customization features of the NetFlex AppBuilder. NetSuite will phase in the online introduction of Version 11.0 between April and June with no additional charge to existing customers, according to company officials.
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