With characteristic chutzpah, NetSuite is hoping to capitalise on disenchantment in the SAP community with a competitive discount offer that promises to halve the cost of current R/3 annual maintenance and support agreements for companies moving to its hosted business applications.
Of course, similar ambulance-chasing schemes are ten a penny in the crazy, crazy world of enterprise software but there are reasons to take this one -- cheekily named Business ByNetSuite in a hat-tip to SAP’s Business ByDesign -- a little more seriously.
First, SAP really did upset many users with its recent tariff changes coming at a time that could hardly have been worse.
Second, users will be actively considering where to go on R/3 after SAP recently extended support schedules by a year.
Third, NetSuite’s target audience here – satellite operations, new projects and other subsidiaries of SAP shops -- is well chosen. The company has zero chance of replacing major SAP installations but can chip away at sites that want to retain SAP as the mothership ERP system but are happy to consider tactical alternatives at the edges.
Fourth, rather than this just being a token finger-in-the-air discount appeal for media coverage, NetSuite has recruited real partners capable of shifting data from SAP to its on-demand platform.
Fifth, being public and Larry Ellison-backed, NetSuite has deeper pockets than most.
As an example of what it can do for SAP users, NetSuite cites Asahi Kasei Fibers as moving from three per cent of revenue spent on Walldorf’s finest to 0.1 per cent of revenue on NetSuite by making the switch, and being able to let 13 consultants go. Doubtless the numbers are more complex than those bald figures allow but still…
As NetSuite VP of product management Mini Peiris puts it, “We’re hearing that the maintenance costs of SAP are really obscene given the current economic climate and customers are looking for alternatives.”
That might have sounded shrill a year ago but there will surely be many firms sounding out alternatives to the big incumbents of enterprise software, especially in areas where replacing systems is not too traumatic. NetSuite could be onto something here.