Nerve 1: This is a great idea. In a nutshell, NetSuite says that it can replace the SAP R/3 software that many Divisions of large multinationals are asked to run, and it's offering NetSuite licenses at 50% of the cost of SAP's annual maintenance fee to back up the claim. We, along with many prospects and other NetSuite partners, participated in the webinar this past Friday where the CEO of Asahi Kasei Spandex America talked about the process and outcome of replacing SAP R/3 with NetSuite meant to his company. It was eye-opening, I guarantee it. From 3% of revenues to run R/3 to .1% of revenues to run NetSuite. Over 1 Million in annual savings. Nerve 2: The name Business ByNetSuite is a clever shot at SAP's entrant in the SaaS space called Business ByDesign. There appears to be a fair amount of confusion about whether Business ByDesign(BBD) is released yet, or if prospects are actively being sold, etc. The only thing that appears certain is that SAP is wringing its hands over what to do with BBD. Nerve 3: The blogosphere is alive with several different theories. Vinnie Mirchandani offers that SAP's lack of comittment to BBD has created a void in the marketplace that others are now filling, including NetSuite and Salesforce.com. Bob Warfield comes to the conclusion that "SAP has essentially proven SaaS is cheaper than On-premises software for the customer. They’ve done so by taking their own On-premise software and incompletely moving it in the direction of SaaS and then stumbling because they can’t even run it cheaply enough to be competitive." Ouch, but good point. Meanwhile, as I reported last week, SAP itself announced that it wanted to shed the infrastructure management for BBD and give it to partners, raising a whole set of issues about what actually comprises the services if you farm it all out. Zoli Erdos notes that BBD is no longer afforded a seat at the SAP dinner table. SAP seems confused about where to go from here. Dennis Howlett does what he can to tamp down the doubt, but I sense that he's growing weary of the heavy lifting. Overall NetSuite has a good idea here. One wonders how many division of large SAP customers out there would split away from the parent's software R/3? But you can definitely understand the business case. But even if NetSuite manages to bring only,say, 3 SAP converts on a month, the bigger message to the market is that NetSuite has arrived upmarket and is ready to handle the small and medium enterprise, SME, market with 25-100 users each. |
