How many of you have walked into a store with the expectation that the product you purchase will probably not work? How many industries do you think can get away with product defects and incompatible components?
For almost three decades, the software industry has convinced consumers that “Bugs” (product defects) and “System Integration” (incompatible components) is a cost of doing business. Granted… enterprise software can comprise of millions of lines of code performing very complex operations. Moreover, today’s complex global economy made possible by the internet has complicated things further with businesses required to support the multiple languages, government regulations, and consumer demands of its customer base.
With this new and growing challenge faced by enterprise, medium and small businesses, even the smallest of organizations have accumulated a hodge podge of applications to run their operations. Hence, the crude patching together of different software packages has created a “hairball” effect pervasive today in most organizations.
This week NetSuite announced its launch of NetSuite OneWorld that attempts to replace hairball systems with a true integrated ERP offering leveraging the internet as the technology platform best-suited for smaller organizations expanding globally. Similarly to revolutionary technologies like the invention of the telephone, the fax machine, and the cellular phone, NetSuite has recognized the comparable power the internet has achieved in transforming the way people conduct business.
NetSuite’s current timing with its SaaS (Software-as-a-Service) delivery model is spot on. The ubiquitous nature of the internet is finally ripe to deliver a common technology platform to run a global business easily incorporating the idiosyncratic requirements of different regions around the world. Thanks to the popularization of SaaS through CRM applications offered by NetSuite and Salesforce.com within the last four years or so, most businesses have gained a comfort with next generation cloud computing that moves beyond client-server and on-premise solutions; especially with regards to the security of critical business data residing in remote data centers.
However, NetSuite has taken this delivery model to the next level truly offering a complete ERP package for smaller organizations looking to for a simple deployment at an affordable price point backed by a rock solid Oracle-based backbone. Obviously, it doesn’t hurt to have Larry Ellison as a majority shareholder supporting your business model as you sell your wares.
You are spot-on with your observations.
We have been selling NetSuite in Montreal since 2005 and we have seen a dramatic increase in usage in the last year. The SME’s are starting to pick-up on the model and are realizing the benefits of not having to worry about infrastructure and upgrades.
One World is now giving us a product that can help companies with multiple subsidiaries that report revenues in different currencies but still need a consolidated statement.
IT-Ration Consulting inc.
Will you please tell me what is the difference between NetSuite and Webworld on demand services? I am a new comer to the business of ERP and therefore this question.
Correction to my earlier question. What I meant was the Workday as SaaS and what is the difference between Workday and NetSuite?
ERP to be deployed as SaaS model is great. But what about confidentiality and sensitive data in your General ledger, Oustandings in your AR etc ? Unlike a CRM system that has information in relation to customers and prospects and how you transact and engage with them, a fully blown hosted ERP application needs to be carefully thought out. I totally agree with elimination of infrastructure, updates, hardware etc…. but sensitivy and confidentiality is an issue that needs to be considered.
Maybe a Saas model which is run in an inhouse environment rather than on data farms maybe a good option.
Either way, I’m a total convert and beliver in the SaaS model. I sincerely hope this model takes off in all aspects of application software.
Welcome Chandra to the small world of ERP!! Workday is an ERP SaaS vendor started up by Peoplesoft founder Dave Duffield. So its roots are strong in the HR space. Where NetSuite delivers a more complete ERP that has its roots in CRM backed by Oracle founder Larry Ellison. Interestingly enough, Dave Duffield and Larry Ellison (who owns the majority of NetSuite)have a history battling in the ERP space, in which Peoplesoft brought Dave out of retirement to save the company from Oracle’s hostile takeover. In any case, both companies are backed by two very influential software leaders… We’ll just have to wait and see who comes on top.
You make a good point Peter. I think SaaS requires a cultural mindshift in the way people run their businesses. Many SMBs are not any more immune to security threats than having their data reside offsite in data centers. In a relatively short time the SaaS model has come along way…
Your write up sounds as though you have swallowed some very gushing marketing statements and assumed that NetSuite’s claims are true. What makes you think that this ERP application is more “a true integrated ERP offering” than any on-premise application? The licensing method, ownership and delivery platform make no difference to the functionality or integration options of an ERP system, with one main difference. This difference is that the ultimate responsibility for the backup, restore, achiving and access to a company’s trading data has now been outsourced to a third party that may not even trade within the same legal jurisdiction. I’m not saying that On demand is necessarily bad - just that you still have to do all the due dilligence on the application functionality and SLA’s that you always used to, and then assess the trade off between the hardware and associated costs you may save against the true - risk-assessed - cost of the On Demand proposition. Don’t get causght up in the hype - anyone remember B2B marketplaces?
Steve - You are absolutely right when you refer to features and functions. It is essential for buyers to do their due dilligence when going through a enterprise software evaluation and selection process. Keep in mind, features and functions only represent 25% of the decision making process when buying software. Vendor viability, services/support, cost, etc. make up the remaining factors in the decision making process. With regards to my write up, my point is that the SaaS model is a very compelling proposition for SMB organizations looking to implement an ERP system. Traditionally, the on-premise model requires a hefty initial investment and a complexity from an implementation and internal support perspective that smaller organizations just can not consider. Many smaller organizations have virtually no IT infrastructure or to consider full blown ERP. SaaS makes this possible…
Please send information about NetSuite OneWorld. I am looking for the right ERP suite for my business. Thanks