NetSuite On Demand Software Review

August 21, 2008 by Steven Briggs

Products & Pricing

The NetSuite ERP software includes an accounting system, supply chain management, manufacturing software, human resources software, customer relationship management software and an e-commerce storefront.

NetSuite is a native thin-client SaaS solution. In general terms, SaaS business systems are delivered over the Internet to users’ web browsers from a centrally hosted data center. SaaS eliminates the costs associated with procuring, installing and maintaining business applications within the customer’s information technology infrastructure. SaaS or on-demand business systems are normally licensed for a monthly or annual subscription fee instead of the much larger up front capital expenditures required of the more traditional on-premise enterprise applications. As a result, on-demand applications require substantially less initial and ongoing investment in software, hardware, implementation services and perpetual IT labor.

NetSuite packages their enterprise software into a number of product suites. The flagship products include NetSuite (the company’s name is used as the products name) and NetSuite CRM+.

The NetSuite solution fulfills back operation processes, including accounting, distribution, human resources, payroll and light manufacturing. NetSuite is loosely targeted to a broad range of companies, however, best accommodates SMB companies. The NetSuite CRM+ Customer Relationship Management software application includes sales force automation (SFA), marketing automation, customer support and service management, and partner relationship management functionality. The product also incorporates sales order management, some ERP and e-commerce capabilities and several ancillary functions such as incentive management, project tracking, Website hosting and basic CRM analytics.

NetSuite is often less than forthcoming when it comes to complete pricing and the number of up-sell solutions that require additional investment. However, in general terms, software fees (in USD) are as follows:

• NetSuite Small Business begins at $99.00 per month (includes 1 full user and 10 limited access users and $49.00 per user per month for additional full users)
• NetCRM begins at $79.00 per month (includes 1 full user with additional users charged at $79.00 per user per month)
• NetCRM+ begins at $129.00 per month (and includes 1 full user with additional users charged at $129.00 per user per month). This production edition includes sales order management, up sell and cross-sell, project tracking, partner relationship management (PRM) and limited Web site hosting capabilities.
• NetSuite with NetERP™ and NetCommerce™ begins at $399.00 per month (which includes 1 full user and 10 limited access users with additional users charged at $99.00 per user per month.

The number of NetSuite add-on products which require additional investment is not known. One NetSuite business partner commented that at one time there were nearly 200 product SKU's each with individual pricing. The more common and oftentimes necessary add-on products include the following:

• Commissions Management – available for NetCRM & NetSuite at $199 per month
• NetCommerce Site Builder – available for NetSuite at $199 per month
• NetCommerce Analytics – available for NetSuite at $199 per month
• UPS Integration – available for NetSuite Small Business and NetSuite at $199 per month
• Advanced Inventory – available for NetSuite at $199 per month
• Advanced Financials – available for NetSuite at $199 per month
• Revenue Recognition – available for NetSuite at $449 per month

ERP buyers are well advised to carefully review NetSuite’s software license agreement and each of the terms of service agreements as additional charges for data storage and various other items can unexpectedly increase the SaaS ERP total price. NetSuite also charges additional fees for customer s who desire to communicate with a help desk person in order to resolve their issues or problems. The company offers different levels of customer support programs, including:

• NetCARE Silver permits telephone and email support during normal business hours. NetSuite’s stated goal with this program is to respond (not necessarily resolve) to all support email incidents within two business days. This program retails for 22.5% of the net license cost.
• NetCARE Gold provides telephone and email support during normal business hours, email support during weekends and priority queuing of Gold customers. NetSuite’s stated goal with this program is to respond (not necessarily resolve) to all support email incidents within one business day. This program retails for 27.5% of the net license cost.
• NetCARE Gold 24/7 provides telephone and email support 24 hours per day, seven days per week. NetSuite’s stated goal with this program is to respond (not necessarily resolve) to all support email incidents within one business day. This program retails for 32.5% of the net license cost.
• NetCARE Platinum support provides a dedicated Customer Support Representative (CSR) and the 24/7 extended coverage. This customer support program is 37.5% of the net license cost.

Originally priced at a low $4.95 per month per user, NetSuite has a history of continually introducing significant product price increases which results in considerable resentment among the user community. In relative terms, NetSuite is priced well above direct on-demand competitors Intacct and Aplicor however much lower than traditional on-premise software from Microsoft, Sage and Epicor.

NetSuite sells its product with a direct sales force and an indirect business partner channel. The company has both staff and business partners in North America, Latin America, Europe and the Asia Pacific region. Most selling by NetSuite is done by inside sales professionals over the telephone. This provides a very economical model for the SMB market, however, doesn’t always suffice for the needs and buying habits of middle market and enterprise organizations. NetSuite is continuing an international growth strategy. In March 2006, NetSuite created a majority-owned subsidiary in Japan, NetSuite Kabushiki Kaisha (NetSuite KK). This subsidiary is owned with minority partners TCI, MJS and Inspire Corporation. TCI and MJS have exclusive distribution rights for the on-demand application suite throughout Japan.