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CRM Software Vendor NetSuite Launches 'Cash for Clunkers' Program
September 09, 2009
 
By Patrick Barnard, Group Managing Editor, TMCnet
You’ve no doubt heard about the U.S. government’s “Cash for Clunkers” program, where citizens were given an economic incentive to trade in their old “clunker” SUVs, trucks and automobiles for newer, more fuel-efficient vehicles.

The federal scrappage program, which was designed to provide stimulus to the economy by boosting auto sales, was initially funded through a $1 billion appropriation, but was so successful that the money was exhausted by July 30 (with more than 250,000 new vehicles traded-in/sold under the program in just the first week), even though it was initially predicted that the funds would last through October. As a result, Congress approved an additional $2 billion just to keep the program going.

The program concluded as of Tuesday, Aug. 25. It is estimated that about 625,000 vehicles were traded in/sold since the program launched July 1 – and about $2.6 billion of the $3 billion appropriated for the program was used up.

Given the wild success of the program, it’s perhaps of little surprise that software vendors are also launching their own “cash for clunkers” programs to incentivize businesses to trade in their old software and hardware systems.

CRM software provider NetSuite (News - Alert), for example, recently launched its own “cash for clunkers” program, which is designed to get companies to trade in their legacy business solutions and related hardware. The company claims it is the first provider of cloud-based CRM software to launch such a program.

However, unlike the government’s “cash for clunkers” program (also known as the Car Allowance Rebate System, or “CARS”), NetSuite isn’t requiring that companies turn in their old hardware or provide proof that they’ve abandoned their legacy systems (nor is the company using taxpayer dollars to fund the scrappage of old hardware). Rather it is simply providing what might be called a “rebate” for customers that sign up for its cloud-based (i.e. Web-based) CRM software. More specifically NetSuite is offering $500 off every investment of $5,000 in its cloud-based software. The program is available in the US, Canada, Australia and the UK.

According to a release, the goal of the program is to help customers “with aging and inefficient enterprise solutions platforms make an informed and responsible switch to a newer, more powerful, and more energy-efficient solution.” Through this marketing initiative the company is targeting users of “expensive, inefficient solutions from companies such as SAP (News - Alert), Microsoft, and Sage to switch to the world's leading modern, efficient, and highly customizable enterprise cloud computing solution.”

NetSuite says the program, which runs through Oct. 31, 2009, will “help businesses turn off and turn in their antiquated on-premise solutions and hardware, pare back their electricity use, and switch to an efficient, cutting-edge, on-demand business management solutions suite.”
 
A recent study from Greenspace shows that the average NetSuite customer reduces its electricity bill by $10,000 per year after switching from an on premises system. NetSuite claims its platform saved its customers more than $61 million in energy bills, in aggregate, in 2008, eliminating the output of nearly 423,000 metric tons of carbon dioxide.
 
For example, NetSuite helped Asahi Kasei Spandex America slash its enterprise IT expenditures thirtyfold.

"We were spending three percent of our revenue on SAP,” said David Stover, chief financial officer of Asahi Kasei Fibers Corp.'s Dorlastan division, in the release. “By switching to NetSuite, we reduced that cost to 0.1 percent of revenue.”

Instrumart is another company that has reduced its energy costs by making the switch. The company, which recently switched from Great Plains to NetSuite, eliminated production of paper invoices entirely, cutting invoice distribution costs by more than 75 percent.

"I'm saving $6,000 per year on invoicing alone," said Brian Leffler, vice president of Instrumart.

Yet another company that slashed its annual energy costs is Schaeffer Manufacturing Co. According to the release it saves about $100,000 per year on the programming costs that would have been necessary to keep its AS/400 “jalopy” running in the 21st century.

And Wrigleyville Sports is seeing annual cost savings of about $10,000. According to NetSuite it has eliminated about 600 miles of commuting per week and has become a “paperless” office using NetSuite’s cloud-based CRM solutions.
 
Unlike the government’s “cash for clunkers” program, NetSuite’s program is easy to apply for, as there is much less paperwork – plus it has no statutory budget limits or surprise end dates.

Patrick Barnard is a contributing writer for TMCnet. To read more of Patrick’s articles, please visit his columnist page.

Edited by Patrick Barnard

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