NetSuite CEO Zach Nelson is betting that SAP takes down its “stone age economics” TCO counter on its Business ByDesign web site by the end of the year.
Nelson made his claim at the Business Cloud Summit this week shortly before Netsuite announced the results of a total cost-of-ownership (TCO) comparison of NetSuite's ERP cloud software suite with SAP's Business ByDesign (BBD) offering.
SAP's has put online a TCO calculator devised to demonstrate BBD's value of a 5-year period when compared to on-premise software. Using this as the basis for its own calculations, NetSuite claims that by calculating the related costs of each ERP solution over a 5-year period, NetSuite was anywhere from 40-70% less expensive than Business ByDesign.
According to SAP's own calculations, using BBD would result in a minimum 5-year TCO of $510,284 for just 10 users over 5 years in a distribution company while in similar-sized manufacturing companies SAP said their TCO would be $496,233.
"By providing an under-powered product with an extremely high total cost of ownership, SAP has fallen into the trap of every stone-age software provider that has tried to make the transition to the cloud and not cannibalize its installed base,” said Mini Peiris, NetSuite's VP of Product Marketing. “But NetSuite will gladly cannibalise SAP's installed base with a rich Cloud product that actually reduces total cost of ownership while increasing productivity.”
Update: As of 4.30pm on 2nd December, Nelson's prediction seemed to have come true as the SAP TCO calculator page was unavailable.
