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NetSuite
Company Information
 Year founded:
1998 (originally incorporated as company name NetLedger)
 Ownership: Public, NYSE: N
 Number of employees: ~675 (2007)
 Annual revenues: ~$108M USD (2007)
 Target market:
Small businesses
In September 2007, Reuters reported NetSuite retained 5,300 customers.
In a February 2007 Accounting Technology magazine interview article, CEO Zach Nelson identified NetSuite's customer acquisitions based on the systems new clients converted from. His breakdown was:
CRM
More than half of new customers are companies previously using QuickBooks
CRM
About 30% of new customers come from Sage products (primarily the MAS family) and Microsoft's Great Plains
CRM
20% come from new startups
 Vertical markets:
CRM
Wholesale/distribution
CRM
Services companies
CRM
Software companies
 Company locations: San Mateo, California, USA (headquarters)
Ontario, Canada
Sydney, Australia
UK/Middle East/Africa
Singapore
Hong Kong
 Awards:

The CPA Technology Advisor - 5 Star Rating (2007)
Real Time CRM Award (2007)
CRM Excellence Award (2005, 2007)
Top 15 CRM Award (2005, 2006, 2007)
CNET Enterprise Software, United Kingdom (2006)
CRM Magazine Market Leader Award (2004, 2005, 2006)
Inc. 500 (2006)

 Certifications: SAS70
 Partners: Apple Computer
FedEx
Merchant e-Solutions
NEBS
NetReturn
PayPal
UPS
VeriSign
 Partner programs: Yes, partner channel
 Review site: NetSuite Review
Product Information
 Subscription pricing NetSuite charges 'setup' fees, user licensing fees and add-on fees for various support and services offerings.
 Add-on charges: Yes
 Hosted and/or on-premise Hosted at Level 3 with outsourced back-up provider Savvis.
 Underlying technology Oracle
 Product name NetSuite
 Product modules

NetSuite
NetSuite Small Business
NetSuite CRM+
NetSuite CRM
NetERP
NetCommerce
SuiteFlex

Hosted Delivery
Service Level Agreement (SLA): Yes
SLA guarantee Yes
SLA financial guarantee Yes, financial credits applied for failed performance
Support Programs: Help desk, partner network
About NetSuite

Co-founded in 1998 as NetLedger by former Oracle executive Evan Goldberg and financially backed by Oracle CEO Larry Ellison. The company started out developing accounting software integrated with the Oracle 8i e-business suite and hosted through Oracle Business OnLine. After years of struggling as an unknown startup, the company gained some muscle by partnering with its chief investor (Larry Ellison) and relaunching its hosted solution as the Oracle Small Business Suite (SBS) in 2001. While the two companies maintained a marketing and revenue sharing partnership, NetSuite was not owned and was not a subsidiary of Oracle. In June 2004, the three year marketing arrangement lapsed, the Oracle Small Business Suite on-demand service provided by NetSuite was rebranded as NetSuite Small Business Suite and NetSuite set out to create its own identity without Oracle (although Larry Ellison, then both Chairman and CEO of Oracle, retained his more than 50 percent ownership stake in NetSuite).

Things we like about NetSuite:

  • Good accounting system; NetSuite has been producing accounting software longer than CRM software and is much better known for their hosted accounting solution than there CRM product (hence there original company name was NetLedger and later changed to NetSuite)
  • Excellent e-commerce module

Things we don't like about NetSuite:

  • Because of the lack of functionality and flexibility, we believe the system is limited to small businesses; perhaps that describes NetSuite's seemingly very strong focus on acquiring QuickBooks and Intuit customers
  • We don't care much for their CRM software; find it weak relative to the core CRM players
  • NetSuite's choice to provide no redundant data center for service delivery and customer data is completely unacceptable. As first reported by Informationweek on July 12, 2007, in a story titled SaaS Vendor NetSuite Has No Separate Backup Center For Customer Data, NetSuite has no separate backup data center for customer data or any of its services. NetSuite acknowledged in its S-1 filing to the SEC that its single data center is located in a third-party facility in an area of California that's vulnerable to earthquakes. More disturbing, in the SEC filing dated July 2nd, NetSuite acknowledged using only one data center to deliver its services and further wrote "We do not currently operate or maintain a backup data center for any of our services or for any of our customers' data, which increases our vulnerability to interruptions or delays in our service," the company said. The SEC filing went on to say that it planned to add a second data center next year, but not for backup services, "We currently intend to add a second data center facility in 2008, the primary purpose of which is to add capacity," the company said.

We're expecting some price and hosted delivery changes from NetSuite. In a September 19, 2007 Wall Street Journal interview, CEO Zach Nelson commented “even with free trials, it takes two months and three to five product demonstrations to close a sale. He was further quoted as saying, “It isn’t easy to figure out how to acquire customers and keep them happy at a low enough cost that you still earn healthy margins.” A post on ZDNet suggested this may be just a method of explaining a high customer churn rate, however, we suspect the cost of sale referenced by Nelson is real and rising and may impose further price escalations in the near term.

For additional NetSuite reviews and readers posts, see:

All information on this page is based on the authors experience and opinions
Information is believed to be accurate, however, may be incomplete
Updates or modifications may be made without notice
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