Will NetSuite become to ERP what Salesforce is to CRM?

Get a free Techzine subscription!

Now that NetSuite has been acquired by Oracle and they have been given the financial injection to grow rapidly worldwide, the company is quickly making a name for itself in the ERP market. If you look closely at the developments, NetSuite could become to ERP what Salesforce has become to CRM and sales.

Don’t get us wrong. NetSuite still has a long way to go, but it is making serious progress. At the moment, the company still has a kind of independent status under Oracle, which is perhaps a good thing. If too many folks at Oracle were to get a grip on NetSuite, we would see growth slowing down sooner. Where NetSuite is a real cloud company, Oracle is still more or less in a transition phase, in which legacy products and on-premise form their services. For Oracle, NetSuite is a point on the horizon for how the cloud works. Currently, Evan Goldberg, the founder and executive vice president of NetSuite, is in control. Like Mark Hurd, he seems to be a kind of protegee of Larry Ellison, the founder of Oracle.

    The body will no longer reject the organ.

Ellison helped Goldberg set up NetSuite at the time. Ellison has always been a NetSuite shareholder, as well. According to Goldberg, at the time of the takeover, Ellison said: “The body will no longer reject the organ”. He was referring to the fact that the Oracle organization is now ready to embrace a cloud product like NetSuite. Now that that has happened, NetSuite must develop towards the ERP standard.

NetSuite will rapidly grow as SuiteSuccess becomes more widely available

What NetSuite does well is that it has developed a model that can be rolled out fairly quickly, something that is impossible for most ERP systems. Normally every customer starts with a bare ERP system, and a consultant or implementation partner then creates a tailor-made ERP solution. This takes a lot of time and is expensive. All business processes must be examined and, where necessary, improved. Such a process quickly costs hundreds of thousands of euros.

NetSuite works with so-called SuiteSuccess templates and a corresponding step-by-step plan. There are now 28 of these SuiteSuccess templates for all different verticals. The templates are also optimized per country. This is because of the tax rules per country and the local competition. If a local competitor offers a solution that is very popular in that country, NetSuite will have to come along. If it doesn’t, NetSuite is already at least behind 1 – 0 in its sales process.

New customers at NetSuite do not get a bare ERP system that needs to be built to measure. Instead, they get an ERP system on which a market-specific template is loaded. This makes a big difference since ERP differs quite a bit from one vertical to another. The SuiteSuccess templates are developed by NetSuite with existing customers who are active in the sectors. In addition, NetSuite even attracts people with a lot of knowledge about the sector. SuiteSuccess ensures that NetSuite basically already provides an ERP system that works well for the company’s sector.

Afterwards, NetSuite also works with the customer to look at what needs to be adjusted in order for the ERP system to function properly for the customer. If the customer has a different product strategy or pricing model, for example, this can be adjusted to suit the customer’s needs. In some cases, it will also happen the other way around. For example, NetSuite can show why a certain model works better than what the customer currently uses. Ultimately, the goal is that the ERP system works mainly for the customer and not the other way around.

According to NetSuite, this last piece of implementation is included in the price. When companies become customers of NetSuite, they get the implementation. The idea of an ERP solution is, ultimately, that you use it for years and are therefore a NetSuite customer for a long time. In this way, NetSuite can recoup the initial investment. This also means that the costs for a company to join are much lower than for many a competitor. A big advantage that really gives the company a head start.

Where NetSuite still has work to do

NetSuite is not yet active worldwide. In many countries, there are still offices to be opened, and the activity still needs to be built up. That takes time. In the Netherlands, NetSuite is now fairly well represented, but in Belgium they mainly work with partners. Adoption in the Netherlands is simply faster than in Belgium at the moment. According to Goldberg, people are now being hired for all kinds of profiles in many countries. From sales to support, but also people with specific market knowledge so that the SuiteSuccess templates can be made suitable for local markets.

Interface and user experience

Furthermore, we are of the opinion that their user interface could be a bit more modern and that the user experience should be even better and simpler. NetSuite has been rolling out a new design for some time now, so steps are already being taken. As far as we’re concerned, the speed can be increased a bit. It has to be a continuous process if you want to keep up with the current generation of SaaS solutions.

The user experience could increase considerably if NetSuite were to collaborate with a low-code party, or if Oracle were to take over one. In our view, it takes far too long to start building a low-code platform, which makes it preferable to look for external partners.

Low-code

When we look at potential low code partners, OutSystems, Mendix and BettyBlocks quickly emerge. Mendix will not be an option because of the cooperation with SAP, although the CEO of Mendix recently let us know that he does not exclude anyone. That leaves OutSystems and BettyBlocks. OutSystems fits better with Oracle, given the integration with complex (legacy) systems. We think that BettyBlocks would probably be better suited to NetSuite, given the lower entry costs and the more innovative character.

Ultimately, it’s all about the benefits that a low code platform can offer. For NetSuite customers it would be a great help if they could build applications for specific processes or for people who are active in the field and are part of a larger process, via drag-and-drop. A sales or support employee on-site, for example. NetSuite has already built some drag-and-drop web applications, but this is mainly focused on reports and workflows. With low-code or no-code you can add a few extra dimensions.

At Salesforce, they also saw this. The CRM giant is now working hard with the Lightning platform, which makes it fairly easy to develop custom applications. This is one of the reasons why companies will no longer be leaving Salesforce in the near future. If they were to leave, they would not only have to replace their CRM and sales tool but also all those built applications. Then you end up in an undesirable situation.

Courses and training should be offered free of charge

Something that needs to be changed as soon as possible at NetSuite is the fact that you can’t train and educate your staff indefinitely for free. There is an entire training portal built by NetSuite, but it just has to be paid per user. If NetSuite can learn something from other large SaaS solutions, you just have to make this kind of course material available for free. In our opinion, it also helps to increase the popularity of the product. If many people follow or have followed training courses, companies will also choose your product more quickly.

Of course, we also understand that making these online courses costs money and that you can’t give everything away for free. We think that the model that AWS and Google use also works fine. Many courses are free. If you want to take an officially recognized exam, you have to pay a small fee. Somewhere between 25 and 150 dollars is fairly standard, depending on how heavy a course is. That should be more than enough to justify the cost of the courses.

Coming years are crucial for NetSuite

The coming years will be crucial for NetSuite. At the moment, the company is still fairly independent within Oracle and is given the means to grow explosively. These opportunities need to be exploited. NetSuite has to penetrate into many countries in order to challenge the current market players. This will be a fierce battle, but many ingredients to be successful are present.

Mark Hurd, CEO of Oracle, has said that NetSuite’s products will never disappear. However, the general expectation is that NetSuite will become part of Oracle more and more. As a result, it will lose some independence. We think that the competition will be a lot harder for NetSuite. The company has to prove itself before that. In any case, we are going to follow developments closely.