The vast majority of NetSuite customers reckon to be highly satisfied with the firm's Cloud-based business software, according to an independent study.
A survey conducted by technology advisory firm Nucleus Research found that 90% of NetSuite subscribers described themselves as either “satisfied” (4 on a scale of 1 to 5) or “very satisfied” (5 on a scale of 1 to 5) with the company’s CRM, ERP, accounting, ecommerce and other business software solutions, as well as its customer support. No customer gave a rating below a 3.
Reduced operating costs emerged as one of the main contributing factors for this high level of satisfaction as well as its out-of-the-box integration capabilities with other business systems and databases.
There are lessons in the survey findings for other Cloud vendors, argues Nucleus, observing: “Other SaaS vendors should take note that NetSuite’s customers are satisfied with the suite and unlikely to switch away despite the current recession and the resulting emphasis on cost reduction in virtually all organizations.
“SaaS vendors that are suffering defections or revenue declines can’t just chalk it up to the current economic conditions. That NetSuite’s customer base is so resilient proves that the model isn’t just resilient in a recession, but is capable of strength in a recession. SaaS vendors that are suffering defections may be in trouble and should look at their offering to ensure that it delivers value as well as their pricing.”
It's also bad news for firms such Oracle and SAP which are making their moves into the Cloud space. “The findings are bad news for traditional on-premise suites such as SAP," Nucleus wrote. "It is one thing for SAP or Oracle to have SaaS-based rivals. But a SaaS-based rival that also provides integration-friendly enterprise applications such as CRM or financials is an even bigger threat."
For Netsuite itself, the findings are clearly good news. Nucleus notes: “The high levels of loyalty and customer satisfaction indicate that NetSuite’s revenues are unlikely to decline as a result of customer defections. In fact, because the application has been validated by users as an effective tool in cost reduction, deployment footprints at existing customers are more likely to increase rather than decrease. The net benefit for NetSuite is a stable subscriber base, which is a critical factor for earnings stability.”
In summary, Nucleus predicts further interest in Cloud-based ERP from companies that are looking to replace or upgrade existing systems, “particularly if ERP functionality is needed beyond the corporate headquarters where the IT footprint may not have the ability or capacity to support a costly ongoing venture like SAP”.
Nucleus concludes: “NetSuite’s firm foundation in the midmarket also highlights the benefits of on-demand ERP for smaller and midsized organisations with limited IT resources. Companies can take advantage of the benefits of ERP for workflows such as accounting and order entry at a far lower price point than traditional ERP and, even with limited IT resources, leverage the transactional data for better decision making.”
The survey was conducted independently by Nucleus in late 2009 from its own due diligence and without NetSuite's involvement.
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