NetSuite is another application service provider started by an ex-Oracle executive. Like Salesforce.com, it offers applications as a hosted service accessible through a standard browser. However, the company still has close ties to Oracle. The company's largest shareholder is Oracle chief executive Larry Ellison, and it is based in San Mateo, California, with its UK branch housed at Oracle's UK campus in Reading.
The company differentiates its offering from Salesforce by offering an integrated suite of applications that include financials, rather than a stand-alone CRM solution.
NetSuite 9.5 UK edition is a localised version of the 9.5 edition launched in North America two weeks ago, integrating that new functionality within the UK edition, which provides support for VAT. The company has no foreign language editions yet, but is planning to release an international version later this year.
The 9.5 edition offers users advanced inventory management features for people running product-based businesses: these include new options such as features-based pricing, and multiple units of measure.
Its analytical Dashboard gets 20 more pre-configured performance indicators; weekly and monthly trend graphing; as well as direct access to data from the dashboard without the need to load additional pages.
New features within the ERP application include multi-location inventory, the ability to track inventory via serial numbers, and quantity-based pricing for businesses that offer volume-based discounts. NetSuite's CRM application gets support for automatic-term based billing; some data-mining functionality and customer-segmentation tools; and seamless integration with corporate e-mail systems such as Outlook.
The new functionality is available at once, at no cost for existing users.
Craig Sullivan, director of product management at NetSuite, said the company has 7000 customers worldwide, with about 50 in the UK. He says the ASP model seems particularly attractive to multi-location businesses. These customers would need to spend a lot of money on network infrastructure to get the level of service they can get out of the box from a hosted application. It's also an attractive approach for people who travel a lot.
Sansar Solutions, a small distributor of semiconductors based in Southhampton, has been using NetSuite for three years, and switched over when the cost of upgrading his Sage financial software and the hardware to support it became too great.
"I do a lot of travelling to India, and it's very useful to be able to run my business from anywhere. We also didn't have to invest in a lot of infrastructure," said Ash Thapar, managing director of Sansar Solutions, based in Southampton.
Lots of ASPs with a model similar to NetSuite's went under during the dot-com crash, and Sullivan attributes NetSuite's survival to the right software -- as well as the deep, deep pockets of its majority owner, Larry Ellison.
"The ASP model is an expensive business, with a lot of up-front investment," said Sullivan.
According to Mei Li, NetSuite's vice president of corporate communications, the company is doing about half the amount of revenue of Salesforce.com, but is seeing the same sort of annual growth -- about 300 percent. Both companies face the criticism that they achieve economies of scale by offering vanilla applications that don't offer the rich function provided by client server applications such as Siebel and Microsoft CRM.
"When we started, we'd show the service to customers and they'd say, "you don't do payroll? We can't buy it." Four years later, we've learned how to meet their needs," said Li.
The 9.5 UK Edition tries to address the customisation issue by offering custom record sets and client-side programming using Java.
Further down the road, NetSuite expects to offer increasingly high levels of customisation. Sullivan said that NetSuite 10.0 Edition will offer support for an offline client, allowing users on the road or without access to a reliable Web connection to interact with their NetSuite data and then synch up later. By the time that ASPs such as NetSuite offer client software, the wheel will have come full circle, recreating the client server model they are at present seeking to replace.
"There is a certain irony there," said Sullivan.
