NetSuite builds it hoping the mid-market will come

When launching the latest edition of its on demand business software suite this month in Oakland, Calif., NetSuite employed a Star Wars theme.

While the company cast itself as the rebel alliance, fighting to free the mid market from the tyranny of competitors “Darth Microsoft”, “Darth SAP” and “Darth,” it remains to be seen whether the force will be with NetSuite in its quest.

The San Mateo, Calif.-based company launched NetSuite 11, highlighting extended use of Ajax for greater usability, a new scripting platform for easier customization, and new vertical specific editions for wholesalers and distributors and services companies.

With an on-demand model that ties together CRM with ERP and e-commerce, NetSuite CEO Zach Nelson told attendees the company is poised to unite the disparate applications of the mid-market the way SAP did for the enterprise.

Nelson said none of NetSuite’s competitors combine an integrated suite with an on demand model, adding mid-market companies don’t have the millions to spend on consulting to get different applications to work together the way enterprise companies did.

Marc Huffman, NetSuite’s regional vice-president for Canada, said with NetSuite 11 the company is going deeper into specific verticals, and the widespread use of Ajax makes for a user experience more comparable to a desktop application.

Huffman said NetSuite is reaching the tipping-point of awareness in the Canadian market, and that will be helped as customers like Workopolis get further into their implementations and start to act as references.

One of NetSuite’s advantages, its integrated suite approach, can also be a challenge, as some companies are looking for a point product to fill a specific business need, not a suite. NetSuite’s challenge is to get on those company’s radar screens. “As we better educate the SME market that the suite is something available and deliverable to them I think more and more they’ll recognize the benefits,” said Huffman.

A case in point is Clean Mark, a Toronto-based provider of cleaning services to national chains like Staples and a NetSuite customer. The company signs a cleaning contract for a company’s stores across Canada and hires local service providers in each market.

John Vavitas, Clean Mark’s president, said two years ago he was looking for a CRM tool to manage sales leads and during his initial research NetSuite wasn’t on his radar screen.

“I actually had a negotiated contract with sitting on my desk waiting to be signed when I got a call from NetSuite,” said Vavitas. “I wasn’t aware it could all be tied together. I had a specific problem (sales forecast and management) and was looking for a specific solution.”

Vavitas said he’s pleased with the enhancements announced in NetSuite 11, particularly the scripting tool, and is already planning to use it to overhaul Clean Mark’s billing process.

Clean Mark uses more than 300 independent service providers that bill the company for their services. The company verifies the invoice, posts it into the accounts payable system and a payment is generated at the end of the month.

With NetSuite’s new scripting tool Vavitas said data entry could be eliminated with service providers posting their bill directly to the system. “For our company, it’s major,” said Vavitas. “We’re going to eliminate the process all together of manually posting bills from our service providers.”

Richard Morochove, an IT consultant with Toronto-based Morochove & Associates, said he is impressed with the widespread use of Ajax in NetSuite 11, adding making it look more like a desktop application will help adoption.

Still, he said some companies remain reluctant to trust their data to a third party, and that’s an issue NetSuite, and other on demand vendors, have yet to adequately address.

“I think there needs to be a little creative thinking to overcome those objections from companies that would really feel more secure to have things in-house but are willing to consider it being outsourced, provided they have safeguards in place,” said Morochove.

As for NetSuite’s bold plans to unite the mid-market the way SAP did the enterprise market, Morochove said it’s an ambitious goal and while he wouldn’t say it’s impossible, he said NetSuite isn’t there yet.

“They’re not the leaders in the mid-market,” said Morochove. “They’ve got some innovative technology, but to be a leader they’ve really got to gain more market share.”

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Jeff Jedras
Jeff Jedras
As an assistant editor at IT World Canada, Jeff Jedras contributes primarily to CDN and, covering the reseller channel and the small and medium-sized business space.

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