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If Brian likes it, it's gotta be good

By | June 2, 2008, 11:11am PDT

Summary: 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 [...]

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.

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Dennis Howlett has been providing comment and analysis on enterprise software since 1991.

Disclosure

Dennis Howlett

Dennis Howlett is committed to maintaining the independent and opinionated stance that his writings are well known for and does not enter into contracts that would limit his freedom of expression in any way. However it is important in the interests of full disclosure to inform readers of those relationships so they can form their own judgment. This page therefore lists all Dennis Howlett’s current business relationships.

Dennis’s consulting arrangements occasionally bring him into direct or indirect business relationships with some of the companies about which he writes, and/or their competitors. Where such a relationship exists, it is disclosed at the end of any article that references the company concerned.

Dennis owns AccMan, an independently produced blog covering the professional services market, primarily focused on Europe. It is currently sponsored by selected TextLink Ads and named sponsors in the ‘Sponsored Content’ block.

He is a member of Enterprise Advocates, a loose association of consultants, and analysts who are concerned with the buyer side of the buy-sell enterprise relationship.

He is a paid contributor to IT Counts, a site dedicated to discussing technology issues as they related to ICAEW members. He also advises ICAEW on certain aspects of its member outreach programs.

He is an SAP Mentor and participates in SAP Mentor webinars. He has recently produced a guide for SAP resellers wishing to record customer videos. Other than as disclosed here, Dennis maintains no business relationship with SAP and is not financially rewarded for his role as a Mentor.

Dennis maintains relationships with a range of end user organizations and in all cases is subject to non-disclosure agreement. He has no current ‘paid for’ relationships with ITC vendors except as disclosed above although certain vendors comp travel and expenses claims. For the benefit of doubt, T&E reimbursement is a common practice among European based writers. It is often the only way we can attend important events. Even so it doesn’t impact our analysis of what vendors have to say. If you believe otherwise then feel free to ignore what is written here.

Except as mentioned above, Dennis has no other investments in any tech industry participants. This page last updated 23rd February, 2010.

Biography

Dennis Howlett

Dennis Howlett has been providing comment and analysis on enterprise software since 1991 in a variety of European trade and professional journals including CFO Magazine, The Economist and Information Week. Today, apart from being a full time blogger on innovation for professional services organisations, he is a founding member of Enterprise Irregulars and an investor in a European start-up. Prior to, Dennis was technology and tax partner in a British firm of Chartered Accountants for 10 years. Prior to that held various senior finance roles across a broad range of industries.

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Dennis,

Do you, or any of your colleagues at the IE, know at what is at the root of such a poor Netsuite customer satisfaction rap? I was reading at NetSuite Not Sweet? Piper Starts at 'Sell' that the ratio of customer complaints to BBB between them and Salesforce.com is 13 to 1. This kind of situation is not sustainable in a long term IMHO. I am a CRM practitioner and write about my experiences in my blog - www.evolutionofbpr.com. I do not have any direrct personal experience with the company and it's product, but would really like to learn what is a primary cause for this problem.

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