NetSuite Revamps Hosted Apps to Give SMBs More Options

By Dennis Callaghan  |  Posted 2004-08-09

NetSuite Revamps Hosted Apps to Give SMBs More Options

Hosted business application services provider NetSuite Inc. is preparing an upgrade to its offerings that will give small-to-medium-sized companies more options for picking and choosing the features they need.

NetSuite will offer Version 10 of its application services in a more componentized delivery model, allowing smaller customers to add functionality without having to upgrade their entire suite of services and larger companies to pay for only the services they need.

In the first phase of the rollout of NetSuite 10, the company next week will release NetSuite Small Business, which consolidates the former Oracle Small Business Suite and NetSuite Basic services. Customers of this service will be able to access an additional module beyond the base service. Specifically, NetSuites UPS Shipping module, which integrates United Parcel Service of America Inc. shipping and tracking services with NetSuite services, could be added on.

NetSuite drops the Oracle moniker on small biz apps. Read more here.

Previously, NetSuite Small Business customers who wanted this service had to upgrade to the main NetSuite service, which costs four times as much, said NetSuite officials, in San Mateo, Calif.

Version 10 of NetSuite Small Business will include modules for inventory management, accounting, sales force automation, basic e-mail marketing, order management and basic Web site/online store customization tools.

The release of NetSuite Small Business heralds a change in the delivery model for the other NetSuite services. NetSuite 10s suite of midmarket application services, due this quarter, will similarly offer base services, then additional modules, what the company calls "value modules." Previously, customers had to license these modules in a separate level of service called NetSuite Pro, but could not rent them a la carte.

The company is making this move to better compete in the upper end of the midmarket, where such an approach is standard according to NetSuite President and CEO Zach Nelson.

"While NetSuite 10.0 will have hundreds of enhancements that will be bundled for all users, specialized functionality that impacts only a subsegment of our users will be broken out," said Nelson. "For example, a services company doesnt feel they should have to pay for—or deal with the complexity of—advanced inventory features. Likewise, a company using ERP [enterprise resource planning] only doesnt feel it should have to pay for a CRM [customer relationship management] offline client."

The Advanced Inventory module includes support for lots, serialization, units of measure, pick-pack-ship, matrix items and bar coding.

Next Page: Other add-on modules.

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In addition to the UPS Shipping module, other add-on modules include Advanced Financial for billing schedules, multiple budgets, allocations and fixed asset management; Advanced Analytics, which provides ODBC read access for Excel and Crystal Reports; and Company Consolidation, for companies with multiple organizations. The Advanced Site Hosting module includes support for WSDK, more advanced customization and publishing of saved searches; E-Commerce Tracker, provides more advanced Web metrics; and Revenue Recognition provides capabilities for service or utility companies that recognize subscription-based revenue over time.

NetSuite 10 includes everything in NetSuite Small Business and adds deeper CRM functionality such as customer service, partner relationship management, customer self-service and employee self-service plus more advanced customization and support for Web services integration.

Pricing for NetSuite Small Business is $99 per month for one user and $49 per month for each additional user. That includes 25MB of file storage and 240GB of Web Store bandwidth.

The main NetSuite 10 service is priced at $399 per month for first user, $99 for each additional user. NetSuite 10 will be sold in one-, 25- and 75-user packs. Most add-on modules are priced at $199 per module, except for Offline CRM, which is $30 per user per month.

Many of NetSuites customers are very price sensitive. Bently Goodwin, president and CEO of Remit Data Inc., which has 11 seats of NetSuite, had mixed feelings about the new modular pricing. He said many of the new services, such as Advanced Analytics, Company Consolidation and Revenue Recognition, would give his company some much needed functionality. But adding nearly $600 a month to his NetSuite bill might be too steep a price.

"It depends on what all you get in each module," said Goodwin, in Memphis, Tenn. "If we have to more than double what were paying now to take advantage of this stuff, that wouldnt be so good."

NetSuite will also continue to sell CRM and ERP services separately in its NetCRM and NetERP offerings. The NetSuite Enterprise service has been discontinued, though customers will be able to separately add the dedicated server option it offered.

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