March

Netsuite vs Sage: Big discounts are the “greatest hits” albums of the ERP industry

Posted By: Wayne Schulz - Contact the author

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There’s a price war brewing within the Netsuite online accounting market

For a reduced fee the online accounting vendor Netsuite is hoping to lure Sage users to their system (Observation: My hunch is if you said that you were a user of Great Plains, SAP, QuickBooks Enterprise or pencil and paper that you’d get the same deal).

This price chopping reflects perhaps on the lack of ~~innovation~~ confidence in the product.

Just as rock bands release “greatest hits” albums when they’ve got nothing new to offer – software companies roll out “50% off” bargains when they have nothing more attractive (new features) to offer.

Here’s some observations for those deciding whether to bite on a discount offer

They are a lot easier to get into – than out of
With one particular price chopping offer, there is a bundle of 100 hours to convert data. If it take 100 hours to get your data into a new system – just think of how much fun it will be to get it out should you decide to leave.

All support is not created equally
Have you ever gotten frustrated dealing with an overseas call center? If you’ve never had to deal with language (dialect/accent) issues – then get ready because in exchange for a relatively tiny up-front discount consider that you may have just signed up for a long distance support relationship.

The happiest day in an accounting software sale is when you sign the agreement to purchase – it’s all downhill from there

If you don’t believe me on this one – just think about the accounting software you’re using now and why you are reviewing discounted software offers online. If you’re like most people your biggest mistake wasn’t the software — rather it was the PEOPLE who SOLD it to you. Select the wrong people to deal with and you’re doomed to failure.

The wrong people? These are easy to recognize because they’re quick to quote you a price on a new product sale. Yet they take forever to solve a problem.

A low initial purchase price is a sucker bet that only fools fall for
I see this all the time. Companies buy software based on some great discount that’s offered TODAY — not taking into account that the product may not work as well as the salesperson demoed it, the recurring annual maintenance (over which they have zero control) may not be as cheap in year two as in discounted year one.

Guess what happens when you stop paying maintenance on a hosted solution? The lights go out – just like when you stop paying your electric bill.
I’ve saved what I think is the most compelling argument against a drastic move to a discounted online offer for last.

Guess what happens if you decide you don’t want to pay any more software maintenance to a vendor who is hosting all of your data online?

Does your login to the hosted site continue to work?

Think about it – when you have a solution securely loaded on your network – you can generally continue to legally use that software even if you decide to stop paying maintenance (I’m not recommending this mind you – just pointing out a loophole that many users freely exploit).

Switch to Netsuite and try it for a year or two. Then stop paying maintenance. There won’t be any free 100 hour assistance to get your data out — and let me know if that login to YOUR DATA still continues to work.

Related posts you might want to review:
Netsuite claims $10,000 average electricity savings – but what about the monthly cost?

NetSuite Earnings Call: We’re Losing Them As Fast As We Replace Them

Intacct and Netsuite – My SAAS thoughts from IT Alliance Spring 2009

Reminder: Sage Maintenance Discounts Available For 2, 3, 5 Year Renewals

SDATA: Sage’s “Secret Sauce” In Communicating Between ERP Systems and The Web?

About Wayne Schulz

Wayne is a Sr Consultant who has worked with Sage MAS 90 and MAS 200 since 1986. He provides technical support to companies located throughout the United States on all versions of MAS90 and MAS200. Contact him on Twitter or Facebook or email wayne@s-consult.com. Review a list of all Schulz Consulting Prior MAS90 News Post Archives here. The views expressed on this site are solely those of the author and do not reflect the opinion or position of any other person or company. We are NOT in the business of providing tax, accounting or audit advice and you are advised to consult with your tax professional in such matters and not to rely on any information here as authoritative tax, technology or accounting advice.

Filed Under Pricing and Promotions, schulz consulting

Comments

Gary Feldman

Why not have the best of both worlds. The new Sage Extended Enterprise includes CRM (with some campaign management), financial accounting and eBusiness Manager eCommerce and can all be offered as a service. You can host with a partner like I-Business Network (www.i-bn.net) where your recurring cost is much lower (hosting fees and maintenance) than a subscription to an online service. Our uptime over the past 10 years is 99.99% and you get the 20+ years of Sage Software development.

Paul Lima

The Sage Products are indeed terrific solutions for many businesses. In full disclosure, any my company, Lima Consulting Group is also a NetSuite implementation Consultancy and like Eric Snyder (from my competitor, Intacct - also a terrific solution) I wanted to add a few thoughts to this very healthy topic.

I've converted several clients from the MAS90 solution into NetSuite and ultimately they purchase NetSuite for two reasons. The first is that in an effort to focus on core business processes, they generally do not want to maintain the servers in their local environment with the associated costs for human capital required to maintain the product and infrastructure. Mission critical applications can't be down and when you look at http://status.netsuite.com/status_en_US.html you can see that NetSuite's uptime over the past year is 99.96%. The second and more compelling reason our clients have decided to migrate from MAS90 is because they want an integrated Suite that combines CRM, e-mail marketing software, E-commerce with their Financial Accounting Software. The reporting solution is very sophisticated and quite easy to use. NetSuite is built in Oracle and that means that even small and mid-size businesses can have scale and leverage on one platform that continues to improve every quarter.

This past week NetSuite began rolling out their routine improvements of the software and you can read about all of the enhancements here: https://system.netsuite.com/help/helpcenter/en_US...

eric snyder

No More Servers Ever, thank you for the plug.

(Disclaimer) I am Eric Snyder, and I'm with Intacct. I manage Channel Sales in the western region here. This is not an advertisement, but a stream of conscious thought, and I'm looking forward to feedback from all.

The advantages that Netsuite describes in its press release for any business moving from on-premise to on-demand software are absolutely spot-on. No hardware or software, never needing an update or upgrade, 99.9+% uptime SLA's and realtime visibility and control all exist with other SaaS vendors. Netsuite happens to do business differently than other vendors, choosing mostly to go to customers directly rather than through and with a supportive channel. They aren't just trying to take-away Sage customers, but customers from any mid-range accounting solution. It makes sense and it's not desperate.

That said, a smart or prudent buyer of this promotion will not likely call Sage or their VAR for their opinion on the matter. They probably won't demand from Netsuite that they agree to an annual price cap, nor read the fine print with respect to their data. They will just leave.

SaaS as a software delivery method is growing... Salesforce.com, Netsuite, and Intacct, too. The word is out and with the economy the way it is, being able to pay "as you go," reduce IT strain, and get more done with less, makes a lot of sense to customers. I'm looking forward to seeing what the accounting channel does with SaaS, as I really think the best is yet to come.

NoMore Servers Ever!

There are other SaaS vendors than NetSuite out there that are nice people, don't bait an switch, allow for easy data retrieval upon exit (if you ever want to leave) and have US based support and are launching new features constantly...check out Intacct.

www.intacct.com

Wayne Schulz

I'm not quite sure why this 50% offer got so much attention because it's been done before (Netsuite made a similar offer against Salesforce and SAP).

As I said above, I'd be surprised if anyone off the street couldn't get 50% off on the initial sign up.