NetSuite and Informatica partner for global enterprise

NetSuite's partnership with Informatica adds a new flavor into the enterprise ERP cloud applications space. Here is why.

NetSuite and Informatica are partnering to deliver an integrated solution aimed at serving the needs of subsidiary operations of global business. Slated for release in Q2:

The Informatica Platform enables the exchange of transactional and master data from NetSuite, including invoices, purchase orders, item fulfillments (shipments), journal entries, inventory adjustments, time entries and expense reports, and customer, employee, product and accounting structure information.

While Informatica has yet to release pricing, the company says it will be in line with existing cloud solutions. Informatica already provides integration between SAP and Salesforce.com.

In the press release, the two companies talk about this as a solution for 'two-tier ERP' deployments with NetSuite emphasising the flexibility and agility with which such solutions can be implemented. In a two-tier approach to systems selection on e typically sees SAP or Oracle at the center with another solution (in this case NetSuite) deployed at the subsidiary level. In that sense there is nothing fundamentally new or novel.

The more interesting questions come around how this adds to the competitive landscape. SAP recently said that it will offer its Business ByDesign system to subsidiaries of its global 2000 customer base, the exact same target group that NetSuite will seek to attract. Those global customers will have to decide which is likely to make the best fit. Five themes are immediately obvious:

  1. Today, SAP can argue there is a much cleaner integration between BYD and its much larger BusinessSuite. NetSuite and Informatica can argue that it doesn't matter and that in any event, BYD is less mature.
  2. SAP can argue that BYD is a well integrated process based system with which existing companies will be broadly familiar. NetSuite can reinforce the maturity of its solution.
  3. NetSuite can legitimately claim to be deployed in 100 countries while SAP only supports eight with more to come.
  4. SAP can point to the incremental integration costs that are incurred in an Informatica/SAP/NetSuite landscape. NetSuite and Informatica can talk to a best in class solution.
  5. SAP will rely on its existing partner relationships with the large integrators, NetSuite has yet to make that journey but can rely upon Informatica's existing influence.

It will be the systems integrators that decide which of SAP and NetSuite will be the true beneficiaries in this market segment. History teaches that SIs follow the money first. They tend to think in terms of large scale teams while the cloud space provides the opportunity for lower cost deployments. Guess which the SIs prefer? NetSuite can argue that even in subsidiaries, customisations are needed while SAP will talk to standard best practices.

As I said on the call - now the fun truly begins as we watch to see which of NetSuite, Salesforce and SAP make the most headway in the coming year.

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