4 ms·

Not getting your vitriol, man. NetSuite sells to SMB space. Those companies lack IT expertise and prefer cloud-based solutions. Hence they were successful. If

Not getting your vitriol, man. NetSuite sells to SMB space. Those companies lack IT expertise and prefer cloud-based solutions. Hence they were successful. If your anger is toward poorly designed software, then yes, it doesn't matter if it's SaaS or on-premise.

stephenr 10y ago
> NetSuite sells to SMB space. Those companies lack IT expertise and prefer cloud-based solutions. Another comment identified "SMB" as "companies in the $10m - $250m revenue range". Other definitions are based on staff count, with "<200", "<250", "<500" accepted 'standards' for Australia, European Union and USA respectively. So, your basic premise is that a company with up to 200 staff, does not, and cannot have any staff capable of installing/maintaining a CRM tool, despite the fact that many companies have sold on-premise CRM software for many years, including NetSuite. > Hence they were successful I would argue that a number of major SaaS products are only successful because they already had an entrenched user-base who basically had limited options besides moving to the SaaS solution. My point was that there are already several SaaS CRM tools for those who don't want to control their own data. SaaS is not about making software better, its about getting continual income from the users of the software, and increasing vendor lock-in.
- HenryTheHorse 10y ago
  > its about getting continual income from the users of the software, and increasing vendor lock-in Unfortunately, lock-in will occur regardless of whether it's an on-prem software or SaaS. Companies don't go around changing their platforms every year or even every 3 years. So, one way or the other, the vendor will derive revenues from Annual Maintenance or Subscription. How's NetSuite unique in that regard?
  - bluedino 10y ago
    >> How's NetSuite unique in that regard? With your standard ERP software, after you buy the software, it's yours. They can't take it away from you, they can only charge you for support. You might even have unlimited users/business units. Add 100 employees and it doesn't cost you a dime. With a SaaS solution like NetSuite, they can charge you per user. You might pay $x/year per user, but if you add 100 users you're paying x*100 more per year. You're also going to be paying the SaaS provider for every month/year you continue using the system. You might own your server and software but with a hosted system you're paying over, and over again. Which can be good if you're doing opex vs capex. Companies generally switch ERP platforms every 10-12 years. Not only do new products come on the scene, but systems decay over time.
    - blahi 10y ago
      >Add 100 employees and it doesn't cost you a dime. That's not always the case. Especially in the space that NetSuite operates in. Microsoft charges per CAL. SAP, Oracle and IBM have their corresponding pricing structure.
    - smhenderson 10y ago
      With your standard ERP software, after you buy the software, it's yours. Any company that uses an ERP system is pretty much forced to upgrade regularly to keep in compliance. And every ERP system I've ever used or evaluated charged by the user. When we used Great Plains, sure it was ours. But the price was based on the license count. Then after 1-3 years support would end and we'd have to upgrade. Oh, we could have decided not to upgrade. But then our owner's auditors would come along and give us bad grades for using an unsupported system. We'd be out of compliance with our lenders. And we just sell stuff, we don't have to worry about HIPAA or ISO standards or any other compliance issues that some companies deal with. So we subscribed to the support plan, paid yearly and were entitled to all upgrades as they came out + some limited support from MS (which we never used). Now we are on NetSuite and we pay annually, just like we did before. Except now upgrades are handled for us and I don't have to purchase a new server every 3-5 years.
    - dragonwriter 10y ago
      > They can't take it away from you, they can only charge you for support. You might even have unlimited users/business units. Add 100 employees and it doesn't cost you a dime. You probably don't have an unlimited-seat license, because that's not how most are sold, and the market that buys ERPs (and enterprise software in general) is primarily motivated to pay for software for support, so "they can only charge you for support" isn't a meaningful limitation.
- icebraining 10y ago
  So, your basic premise is that a company with up to 200 staff, does not, and cannot have any staff capable of installing/maintaining a CRM tool, despite the fact that many companies have sold on-premise CRM software for many years, including NetSuite. It's not that they can't, it's that they don't want to. As vendors of a (FOSS) ERP/CRM platform, we offer both a SaaS and a self-hosted installation, and most of our SMB clients prefer the former. The thing about the continual income is that the salary of a sysadmin (which most companies don't have) costs way more than many SaaS plans, so it doesn't make sense until you're very big. As for the lock-in, many business SaaS platforms allow you to export your data. And in our case, you also get a FOSS-licensed copy of the software :)
ethbro 10y ago
To be fair, a lot of the attractiveness of SaaS is how poorly purchased / inhouse IT management has worked out for SMBs. Before, there was a floor to how few people you could manage a system with, which meant there was a floor to the size your company had to be or else... problems. SaaS solves to that initial "we need process but can't afford the minimum buy in" gap. Admittedly at the cost of lining someone else's profit margin. But when your choices are between "nothing feasible" and "pay some overhead", it starts to look pretty attractive.
- HenryTheHorse 10y ago
  Absolutely. Bring in 100 sales reps and suddenly SaaS pricing starts looking horrendous. The large enterprises complain endlessly about their SFDC bills.

stephenr 10y ago

> NetSuite sells to SMB space. Those companies lack IT expertise and prefer cloud-based solutions. Another comment identified "SMB" as "companies in the $10m - $250m revenue range". Other definitions are based on staff count, with "<200", "<250", "<500" accepted 'standards' for Australia, European Union and USA respectively. So, your basic premise is that a company with up to 200 staff, does not, and cannot have any staff capable of installing/maintaining a CRM tool, despite the fact that many companies have sold on-premise CRM software for many years, including NetSuite. > Hence they were successful I would argue that a number of major SaaS products are only successful because they already had an entrenched user-base who basically had limited options besides moving to the SaaS solution. My point was that there are already several SaaS CRM tools for those who don't want to control their own data. SaaS is not about making software better, its about getting continual income from the users of the software, and increasing vendor lock-in.

HenryTheHorse 10y ago
> its about getting continual income from the users of the software, and increasing vendor lock-in Unfortunately, lock-in will occur regardless of whether it's an on-prem software or SaaS. Companies don't go around changing their platforms every year or even every 3 years. So, one way or the other, the vendor will derive revenues from Annual Maintenance or Subscription. How's NetSuite unique in that regard?
- bluedino 10y ago
  >> How's NetSuite unique in that regard? With your standard ERP software, after you buy the software, it's yours. They can't take it away from you, they can only charge you for support. You might even have unlimited users/business units. Add 100 employees and it doesn't cost you a dime. With a SaaS solution like NetSuite, they can charge you per user. You might pay $x/year per user, but if you add 100 users you're paying x*100 more per year. You're also going to be paying the SaaS provider for every month/year you continue using the system. You might own your server and software but with a hosted system you're paying over, and over again. Which can be good if you're doing opex vs capex. Companies generally switch ERP platforms every 10-12 years. Not only do new products come on the scene, but systems decay over time.
  - blahi 10y ago
    >Add 100 employees and it doesn't cost you a dime. That's not always the case. Especially in the space that NetSuite operates in. Microsoft charges per CAL. SAP, Oracle and IBM have their corresponding pricing structure.
  - smhenderson 10y ago
    With your standard ERP software, after you buy the software, it's yours. Any company that uses an ERP system is pretty much forced to upgrade regularly to keep in compliance. And every ERP system I've ever used or evaluated charged by the user. When we used Great Plains, sure it was ours. But the price was based on the license count. Then after 1-3 years support would end and we'd have to upgrade. Oh, we could have decided not to upgrade. But then our owner's auditors would come along and give us bad grades for using an unsupported system. We'd be out of compliance with our lenders. And we just sell stuff, we don't have to worry about HIPAA or ISO standards or any other compliance issues that some companies deal with. So we subscribed to the support plan, paid yearly and were entitled to all upgrades as they came out + some limited support from MS (which we never used). Now we are on NetSuite and we pay annually, just like we did before. Except now upgrades are handled for us and I don't have to purchase a new server every 3-5 years.
  - dragonwriter 10y ago
    > They can't take it away from you, they can only charge you for support. You might even have unlimited users/business units. Add 100 employees and it doesn't cost you a dime. You probably don't have an unlimited-seat license, because that's not how most are sold, and the market that buys ERPs (and enterprise software in general) is primarily motivated to pay for software for support, so "they can only charge you for support" isn't a meaningful limitation.
icebraining 10y ago
So, your basic premise is that a company with up to 200 staff, does not, and cannot have any staff capable of installing/maintaining a CRM tool, despite the fact that many companies have sold on-premise CRM software for many years, including NetSuite. It's not that they can't, it's that they don't want to. As vendors of a (FOSS) ERP/CRM platform, we offer both a SaaS and a self-hosted installation, and most of our SMB clients prefer the former. The thing about the continual income is that the salary of a sysadmin (which most companies don't have) costs way more than many SaaS plans, so it doesn't make sense until you're very big. As for the lock-in, many business SaaS platforms allow you to export your data. And in our case, you also get a FOSS-licensed copy of the software :)

ethbro 10y ago

To be fair, a lot of the attractiveness of SaaS is how poorly purchased / inhouse IT management has worked out for SMBs. Before, there was a floor to how few people you could manage a system with, which meant there was a floor to the size your company had to be or else... problems. SaaS solves to that initial "we need process but can't afford the minimum buy in" gap. Admittedly at the cost of lining someone else's profit margin. But when your choices are between "nothing feasible" and "pay some overhead", it starts to look pretty attractive.

HenryTheHorse 10y ago
Absolutely. Bring in 100 sales reps and suddenly SaaS pricing starts looking horrendous. The large enterprises complain endlessly about their SFDC bills.