CRM Software

CRM software provider NetSuite (News - Alert) has announced that its cloud-based business software platform, NetSuite OneWorld, beat SAP’s (News - Alert) Business ByDesign solution in a “shoot-out” held during the Sapience 2009 conference, which took place Dec. 8-9 in Cambridge, Ma.

 

Industry analysts Helmuth Gümbel, senior research director and managing partner of Strategy Partners International; Vinnie Mirchandani, founder of Deal Architect; and Ray Wang, partner with Altimeter Group and former Forrester (News - Alert) analyst, served as judges for the head-to-head comparison of the two cloud computing solutions.

According to a press release, NetSuite OneWorld outperformed SAP Business ByDesign in all phases of a test featuring complex, real-world business processes. More specifically the solutions were compared in terms of CRM process (from lead to opportunity to order), production and fulfillment process (from work order to purchasing to goods assembly to shipping) and global financial management process (from invoicing to payment to financial reporting, including multi-subsidiary/multi-company consolidation).

The judges rated the solutions in five categories of performance: Design, Usability, Functional Aspects, Technical Aspects and “Other.” The weight of each category in the final tally was established independently by each judge.

According to the release, NetSuite was the “across-the-board favorite” of each of the three judges. They praised NetSuite's functionality and customizability -- while marking down SAP for requiring excessive input steps and a failure to demonstrate key functionality, such as multi-subsidiary consolidation or real-time production and fulfillment.

“What does not show in demos such as those presented at Sapience 2009 is the experience that NetSuite has accumulated from a decade of supporting over 6,000 customers,” Mirchandani said in the release. “Additionally, they don't factor that SAP will have a significant cultural shift as it will have to transparently showcase uptime, availability and other SLA metrics with Business ByDesign. It has historically depended on its hosting, application management and other partners to deliver these capabilities one customer at a time – so it’s really not transparent at a market level.”

SAP recently announced that maintenance for its R/3 V4.6 solution will end as of March 2010 -- and that maintenance for SAP R/3 4.7 will be extended, but at a higher cost. These changes will affect approximately 70 percent of SAP users who now face the decision of whether to pay increased costs for maintenance, or upgrade to SAP ERP 6.0.

In response to this, NetSuite announced an incentive program, the “NetSuite Crossroads Initiative,” as part of its ongoing effort to lure more SAP customers over to its NetSuite OneWorld cloud-based offering. The new program targets SAP customers facing “end-of-life scenarios” with their SAP R/3 software.

What’s more, in April NetSuite announced a new version of NetSuite OneWorld for SAP, enabling SAP customers to use NetSuite 'at the divisional level,' while retaining their current on-premises systems at the corporate level. Through the integration of the two platforms, made possible through NetSuite’s “SuiteCloud Connect for SAP,” large SAP legacy accounts can use NetSuite's on-demand application to manage business operations and roll up division-level transaction and summary data.

It appears that these initiatives are delivering: In recent months NetSuite has announced several new customers, including organizations that decided to ditch their on-premises SAP systems and adopt NetSuite’s cloud-based platform. Last month NetSuite announced that The New Release, which owns and operates thousands of DVD rental kiosks throughout the U.S. under the Moviecube and Blockbuster Express brands, had abandoned its SAP system in favor of NetSuite’s cloud-based business software.

What’s more it appears that the mass migration to SaaS or cloud-based business software won’t be slowing down anytime soon: In November IT consultancy Gartner (News - Alert) released a report estimating that global software-as-a-service revenue will reach $7.5 billion in 2009, a 17.7 percent increase from 2008 revenue of $6.4 billion. The report, “Market Trends: Software as a Service, Worldwide, 2008-2013, Update,” predicts the SaaS (News - Alert) market will show consistent growth through 2013 when worldwide SaaS revenue will total more than $14 billion for the enterprise application markets.
 
The report finds that the CRM software market had the second largest amount of SaaS revenue across market segments, generating $2.3 billion in 2009, up from $1.9 billion in 2008.

“SaaS has continued to represent a key driver of growth in the CRM market for the past four years, climbing from less than $500 million in 2005 and over 8 percent of the CRM market to over 20 percent of the market in 2008, with nearly $1.9 billion in revenue,” the report states. “Gartner expects growth to continue, with SaaS representing almost 24 percent of the CRM market’s total software revenue in 2009.”