NetSuite Aims At Enterprises with 'unlimited' Push

On-demand ERP software vendor NetSuite is expected to announce a new push into large enterprises on Tuesday during its SuiteWorld user conference in San Francisco.

By Chris Kanaracus
Tue, May 10, 2011

IDG News Service — On-demand ERP software vendor NetSuite (N) announced a new push into large enterprises on Tuesday during its SuiteWorld user conference in San Francisco.

Dubbed NetSuite Unlimited, the announcement is less about a specific product than about an array of partnerships, services, applications and technology improvements meant to respond to the demands of the world's biggest companies. The move represents a further shift away from the small and medium-size businesses that have largely constituted NetSuite's user base since its formation in 1998.

"We've done our best to give you the power of the big boys, and give the big boys agility," CEO Zach Nelson said in a keynote address Tuesday.

At the core is a new version of NetSuite that offers support for unlimited users, unlimited storage and add-on applications as well as access to all NetSuite modules, according to the company. Pricing starts at around US$1 million per year, Nelson said. Even that price is much lower than what many companies are paying the likes of Oracle (ORCL) and SAP, he added.

Another component of NetSuite Unlimited is a new partnership with services firm Accenture (ACN), which has created an ERP (enterprise resource planning) practice around NetSuite's software, he said. Accenture's stamp of approval could give NetSuite more credibility with enterprise customers.

In addition, NetSuite is beginning to roll out Oracle's Exadata database machine in its own data center, to work in conjunction with the company's existing data center operations, Nelson said. In that data center, Exadata could end up supporting larger NetSuite customers' application instances, as well as more resource-intensive workloads such as e-commerce, Nelson said.

The move deepens NetSuite's already close relationship with Oracle. NetSuite uses the vendor's database and middleware, and Oracle CEO Larry Ellison remains a major investor in the company.

"We couldn't do what we do without Oracle," Nelson said. "They're an unbelievable partner."

To that end, NetSuite does not necessarily expect to replace the likes of SAP and Oracle as large enterprises' primary ERP system.

Instead, the company is more intent on serving as the second pillar of a "two-tier" ERP strategy, wherein its software is deployed in an SAP or Oracle shop's new subsidiaries or offices around the world and then tied back to the main ERP core. Microsoft (MSFT), Epicor and other ERP vendors have adopted a similar marketing strategy. SAP is trying it with its Business ByDesign suite, which like NetSuite is SaaS (software as a service).

NetSuite presents "a major option" for two-tier ERP especially considering it is delivered as SaaS, according to analyst Ray Wang, CEO of Constellation Research. "The cloud base gives customers an opportunity to stay on legacy and evolve to cloud," he said.

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