NetSuite is taking the battle ever closer to SAP with the launch of a new version of NetSuite OneWorld that lets large SAP enterprise customers enjoy the cost savings and efficiency benefits of Cloud Computing at the divisional level while retaining its current investment in SAP on-premise systems at the corporate level.
With NetSuite OneWorld for SAP, large SAP legacy accounts can now use NetSuite’s leading on-demand application to manage multinational, multi-subsidiary business operations in real-time and then pass on division-level transaction and summary data to gain a key enterprise-wide view of business operations.
“NetSuite OneWorld for SAP enables large companies to keep their investment in legacy business applications, while deploying a modern, web-based business application suite that reduces costs and helps make their divisions more competitive and employees more productive,” said Zach Nelson, CEO of NetSuite.
Key to NetSuite OneWorld for SAP is a new integration offering called SuiteCloud Connect for SAP. SuiteCloud Connect for SAP is a product and services offering that enables SAP customers to roll-up data to their SAP system at the corporate level and any data that was captured and used in NetSuite OneWorld at the divisional level. For example, using SuiteCloud Connect for SAP, a user could roll-up general ledger, order and revenue information from NetSuite to SAP for aggregate financial reporting purposes.
The release comes after a mysterious unnamed source told Reuters that NetSuite planned to ramp up its offerings to take on SAP and Oracle on their home ground. The unsubstantiated 'leak' gave NetSuite's share price a bump, but provided no information on how exactly this assault on its enterprise rivals would come about in practice.
“NetSuite is looking to exploit one of the gaps in SAP’s strategy by offering a cost-effective product for smaller sites” said AMR Research's Bruce Richardson. “This would have been an ideal role for SAP Business ByDesign, but the company never intended to target its installed base. Instead, Business ByDesign was aimed at first-time customers looking for a new software-as-a-service (SaaS) offering. NetSuite is positioning its product as more functional than SAP Business One and less expensive and complex than SAP Business All-in-One and the SAP Business Suite. It does have some customer references to prove its argument”
Richardson cited the example of the CFO of a textile company that moved from SAP R/3 to NetSuite in 90 days. The executive had been frustrated by his inability to attract SAP consultants to his site, but by switching to NetSuite, he was able to eliminate 11 topical consultants and 2 dedicated consultants and take usage down from 90 SAP users to 32 NetSuite users while spending went from 3% of revenue to one-tenth of 1%.
But can NetSuite succeed in tackling SAP. “While its revenue and customer counts pale next to those of SAP, there’s little doubt customers are looking to move more of their applications to the cloud—and they’re willing to spend more to do it. NetSuite’s revenue per customer for NetSuite OneWorld topped $100K in 4Q08,” said Richardson. “This is a very clever move by NetSuite’s Zach Nelson, one that should generate attention from C-level executives looking to drive down IT costs as the economy slips and slides. The challenge will be turning interest into invoices without incurring drain-the-bank sales costs.”
