There is nothing wrong about NetSuite. In fact, they are doing great. The only problem is that Salesforce.com is doing even better… Also, it should be said that Salesforce.com’s user interface is significantly better than NetSuite’s, and if you’re planning to use them as the cornerstone of your computing environment, user interfaces really matter.

Best regards
 -Ismael

Whenever somebody starts a conversation related to SaaS, they mention Salesforce.com, not NetSuite. In fact both companies are partly owned by Larry, the Oracle guy. I have not seen any other vendor offer anything close to NetSuite’s features. Why is there not much talk about NetSuite? Anything fundamentally wrong with NetSuite?

I fully agree with you. The challenge is quite formidable!

Best regards
 -Ismael

Even if you are willing to spend a few thousand dollars per software seat (imagine you have 10 employees), the problem is that they just don’t want to deal with you unless they can add on a few hundred thousand in implementation fees. When I check on SAP for instance, their small business offering started at $100K!

I can understand them, for the same thing to some extent exists in my business. If you focus on big jobs, the small jobs just aren’t worth your time. SaaS would allow SAP and others to go after small businesses, but as noted in my post above, I think the challenge is that they need to purposely limit their offerings so as not to intrude on their big corporate sales. Which makes it hard for them to compete with Salesforce.com and others who want to make their software as powerful as possible at a lower price.

Of course, at some point the market will force them to change, kicking and screaming, but I am not sure that time has come yet, and I am not sure that if I were them I would not also want to see that day come later rather than sooner.

One of the things that is humorous if you look at the websites for many of the large software companies is that their idea of a small business is someone with fewer than 1,000 employees. Of course in the grand scheme of things they are correct, but my point is they have very little interest in offering solutions to what most of us thing of as a small business, which is a business with anywhere from 1 to 100 employees that is looking for solutions in the Salesforce.com price range.

I could not agree more. Thanks for sharing your experience with us.

Best regards
 -Ismael

Great post. I can empathize with the challenges SAP faces today regarding SaaS. I was in charge of creating and managing the Siebel CRM OnDemand division at Siebel. Our first problem was trying to take Siebel’s massive code base and rebuild it to be multi-tenant. But, multi-tenancy is only one facet of successful SaaS applications. SaaS applications also need to be simple to set up, simple to use, and simple to buy. Taking Siebel’s massive code base and making it multi-tenant meant it could be shared by multiple customers, but it didn’t help to make it easier to set up or easier to use. It took an enormous additional amount of engineering effort to make the necessary improvements in those areas.

But technology wasn’t our real issue. It was the challenge of changing business models. Not much internal fighting occurred when my division was small, but as our revenues grew, everyone became scared of cannibalization. It created an internal civil war which helped speed up Siebel’s collapse.

In my experience, it’s nearly impossible to change large enterprise companies to the SaaS model. They have the wrong DNA. I started my latest company (LucidEra — we’re focused on SaaS Business Intelligence) to be a SaaS company from the ground up. It’s much easier than trying to change your own DNA!

I’m sure Marc will like the compliment, especially coming from you.

Best regards
 -Ismael

The pure play on-demand CRM vendors that are focusing on bringing more and more ERP tools totally integrated out-of-the-box in a wall-to-wall fashion similar to CRM products are the clear winners.

My point, exactly. Re-engineering Business One won’t give them something to really compete in the marketplace. You need a new platform. You could reuse the business-level data schemas, but not much more. Hence my post.

Best regards
 -Ismael

I’m probably going to get this wrong, because SAP is putting enough FUD about to keep us all guessing. A1S is supposed to be their upcoming SaaS offering, originally slated for Q1, now May, and maybe further out. You might be thinking about A1N.

Business One is good, and it meets a specific segment need. The fact that it is largely on-premise right now doesn’t matter. It is being re-engineered to SaaS for 2008 — so they say.