If Brian likes it, it's gotta be good

My Irregular colleague Brian Sommer waxes lyrical about the OpenAir/NetSuite deal. Brian has more years' experience implementing and analyzing business applications than most others I know. If he says something is good, then that's high praise and well worth a buyer's attention. Condensing Brian's analysis:

We believe this deal will have a significant impact on the PSA software market space...the PSA marketplace has maintained a nominal sense of stability wherein PSA vendors quietly competed with one another.

In our discussions with SMB top executives, we have consistently heard complaints about the high cost of integrating clusters of application functionality with other components that companies have purchased/licensed.

OpenAir now brings to the market an integrated financial back-office solution with its own service industry product line.  Both will be offered in an on-demand (i.e., SaaS) basis. Service firms will, in time, benefit from the tight integration to come between these two product offerings.

The acquisition of OpenAir brings a significant East Coast presence to NetSuite.  OpenAir brings 300 service based customers into the NetSuite family.  Virtually all of these customers utilize back-office applications that are prime replacement candidates for NetSuite...Every OpenAir customer is an upsell opportunity for NetSuite.  Likewise, NetSuite has over 5000 customers and considerable experience in the services sector.

However, what we really like about NetSuite is its product development architecture: NS-BOS. This platform, also known as the NetSuite business operating system, permits two key things:

• the rapid development of vertically specific applications in a well-designed multitenant SaaS architecture
• the seamless integration of these applications with NetSuite's core front and back office products

Business application suite providers have been slow to provide deep domain offerings of the kind OpenAir/NetSuite is proposing. Last Month, SAP's Doug Merritt admitted SAP only provides 25-35% vertical market functionality 'at best.'

I am prepared to take what Brian says on good faith but I wonder how far the combined offering will reach before requiring scripted additions, NetSuitge's preferred method of dealing with customizations.

Professional services organizations come in all shapes and sizes but the one thing I see consistently omitted are ways to provide contractors with a smooth way of doing business with their PSO masters. I can see opportunity for the niche vendors that service freelance consultants like FreshBooks and FreeAgent to piggy back onto PSO's. It would be a single point of integration, something Brian I'm sure would wish to avoid, but one that adds value inside the PSO value chain by reducing the friction that often exists between contractors and PSOs.

Disclosure: I have a tiny holding in FreeAgent. Brian and I are currently collaborating on a report about Business ByDesign.