by Thomas Wailgum

NetSuite Plays Shoot-Out with SAP Perfectly–and Wins

Jan 11, 2010
Enterprise Applications

A software shootout between SAP and NetSuite's cloud ERP offerings gives NetSuite just what it wanted: Publicity and legitimacy.

It was supposed to be a good ‘ole fashioned software shootout: SAP‘s on-demand Business ByDesign product versus NetSuite‘s OneWorld cloud offering.

Three independent, respected ERP and business software analysts would judge three business process scenarios of each software package. The processes: CRM, production and fulfillment, and global financial management. A winner was to be declared.

For the often staid enterprise software industry, the head-to-head competition in November had some spicy buzz. (That the event took place a day after SAP’s Influencer Summit ’09 was not lost on anyone.)

To my mind, the clear victor—without a doubt—was and always will be NetSuite, even as the industrywide debate rages on.

But my declaration actually has nothing to do with the head-to-head technical merits of Business ByDesign versus OneWorld. I leave that up to the enterprise software analysts and tech pundits who know business applications inside-out and have spent considerable time waging their own wars over deciding the victor: Michael Krigsman, David Dobrin, Dennis Howlett, Jon Reed, Dennis Byron, to name a few.

No, I’m declaring NetSuite the victor on the basis of how they played The Game: In the occasionally dirty, always high-stakes business of enterprise software, perception can ultimately mean much more than the real merits of the underlying code and user interfaces.

NetSuite “won” due to the simple fact that NetSuite executives, coming out of the Sapience 2009 event (where this was held), have been able to alter, massage and position the conversation to their liking. Zach Nelson, NetSuite’s CEO, must be smiling as each earnest software analyst writes another blog post about the event.

You see, all of the follow-up, posturing and analysis since the Shoot-Out has played right into NetSuite’s marketing and branding plans: As all those analysts’ engaged in trying to decipher and declare a valid victor, the debate served nothing other than to legitimize NetSuite’s sought-after proposition in enterprise software circles: Namely, that it’s an “SAP vs. NetSuite” decision for business software buyers today.

No doubt, NetSuite executives have long wanted to be part of the ERP conversation—to the exclusion of other ERP vendors in the space—and they succeeded with the Shoot-Out. (See this 2008 article.) Just look at the headline of NetSuite’s chest-thumping press release in early January: “NETSUITE TOPS SAP IN ENTERPRISE SOFTWARE SHOOT-OUT AT SAPIENCE 2009 CONFERENCE.”

And the rest of us stewing about it…well, we all got played for suckers.

Now, I’m not saying the staged competition or the Sapience event itself were trivial matters. In fact, these types of public “bake-offs” are actually quite a novel idea and important for customers—in theory.

I’m just pointing out that the fight between Business ByDesign versus OneWorld was never going to be fair. It was, as others noted, an ambush. There are a bevy of reasons, but the most notable is that OneWorld was operated by a NetSuite employee during the competition, while Business ByDesign was demoed by a non-SAP employee, working on a “public test system that was being hammered by some 5,000 other people at the same time,” points out Howlett. [UPDATE: As Howlett points out in his post: An accomplished NetSuite demonstrator was on stage with the person demonstrating the NetSuite solution.]

It was akin to sending a team of basketball players to compete in the championship game with a different coach.

The inequities inherent in the Shoot-Out, in fact, remind me of that infamous false-choice question: “When did you stop beating your wife, sir?” For SAP execs, a similar follow-up question would be: “Why did Business ByDesign get beaten by NetSuite’s OneWorld product?” There’s no correct answer, since the question is based on a false assumption that the competition was objectively fair.

Nevertheless, congratulations should be bestowed upon NetSuite, the company—but not OneWorld, the product. Actual customers will ultimately decide which is better.

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