One of the presumptions about SAPs entry to the mid-market on-demand scene with Business ByDesign is that NetSuite will benefit from the halo effect. I'm not so sure. Over the last year, I've heard vague negative mutterings about NetSuite in the UK. Most of the complaints concerned performance and upgrade issues. I ignored these background noises until now. I had no real evidence that they were anything more than the usual gossipy grumblings one hears around application implementation.
That changed this week when a reader on my AccMan blog requested broad recommendations for integrated on-demand applications that include accounting and customer management elements. This company is a three year NetSuite user. They've had enough. That's serious for any company because it means ditching an entire investment and starting over. With the company's permission, I reproduce an email outlining the issues. It is a sobering lesson and vaguely reminiscent of the kinds of issue that were all too frequent in the ERP go-go years of 1993-6. While many of us may be enamored of saas/on-demand, the business reality is that at least for this vendor, much has yet to be done:
Based on our experiences and the user group, the customer/user base is far from delighted. Still far too many flaws in the core system and a nasty business model. People buy and love the One System spin, but the reality is an awkward solution that still needs lots of work. ERP/accounting is OK (with some very nice features drawn from midsize/large solutions) but UK users seemed concerned about localisation, specifically problems with VAT [sales tax] reporting.
CRM is woeful if you want to do marketing automation and even worse for UK users where data protection laws further neuter capabilities. The integrated webstore is a lovely idea but has lots of weaknesses and search engine-aware marketers often seem deeply unhappy. So, a lovely concept but, three years after I first used it, NetSuite still feels deeply inadequate.
Functional completeness is always an issue in any application suite. Even the Big Boys are frequently found to be wide but shallow. So while NetSuite may not meet this company's expectations some fairly obvious 'gotchas' are making it difficult for the company to operate. Continuing...
Worse, the company has dreadful business practices:
Sales people promise the world without a care or comeback. The website is very coy about all the extras (modules and support) and vacant on pricing. Prices rise very rapidly. Features that were initially standard are ripped out and turned into pricey options at renewal; It has become very very expensive for a small business (probably accessible/OK for midsize) -- I do wish vendors would stop talking about targeting SME when often they almost certainly mean the midmarket (high-tens, hundreds of employees); Customer and account support is woeful (perhaps because they do or don't use their own service!), and even more so in the UK -- and literally zero support unless paying extra; Not a solution that a typical business can set up solo, so cost at least doubles with consultants. For the first six months it feels like you are working for NetSuite (again like SAP?).
If you're a long time ERP user, then some of this will sound depressingly familiar. In recent discussions around SAPs Business ByDesign, little was said about how SAP will flesh out the business model but in this case, the customer feels as though they're being fleeced. This is something to watch as business suite vendors make their presence felt. My correspondent concludes:
The reality is a very technical solution (akin to SAP, perhaps?) that could suit organisations with this bent; I suspect it could also suit business with large transaction volumes but I would be wary of using the accounting in the UK, and the integrated webstore appears weak on some internet marketing fundamentals. Very unintuitive and complicated for users.
One could also easily argue that NS keeps getting ahead of itself, introducing new features rapid fire while failing to finish the old ones -- it does have some very nice touches and seems close to Web 2.0 cutting-edge in places.
A single instance or indicative of a general malaise? It's always difficult to tell but given the customer has given NetSuite three years to deliver it seems the company has much to prove.