NetSuite nightmares

NetSuite nightmares

Summary: 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.

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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.

    Topics: Enterprise Software, Browser, SAP, Software

    Dennis Howlett

    About Dennis Howlett

    Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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    44 comments
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    • NetSuite Support Group Needed

      We also suffered through a terribly difficult NetSuite experience. From exaggerated and invalid claims by sales people, to a very expensive implementation, to an unstable product ? our project team was ultimately assailed by the user community who vocally claimed the product was hard to use and by our sales management team who claimed the CRM portion was inherently weak. After about a year and a half we finally cut our losses and moved to another on-demand product which we?ve been happy with. My advice? Let the buyer beware.
      michaelwilliams
      • Netsuite

        What did you switch to?
        vz1
        • Got it right the second time

          Aplicor
          michaelwilliams
    • RE: NetSuite nightmares

      The interesting part about the article was that the complainant seemed to try to implement solo. Anyone with any experience knows that there isn't any mid-ranged solution which can be implemented without some consulting services. "Do not try this at home" is very true wit ANY mid-ranged product.
      pdoucetca
      • NetSuite never said "do not try this at home"

        Put the article in the context that 2+ years ago NetSuite was MARKETING to QuickBooks users who wanted to move up to the next level. That's not exactly how NetSuite seems positioned today so I can see how those who bought into the "upgrade from QuickBooks" back then may be feeling a little burned now.
        ttsoft
    • NetSuite is Horrible

      NetSuite is a catatrophe: sales people promise the moon but there is little flexibility, no support, and no willingness to help solve problems. My firms is small and we almost went under because of the delays and costs of dealing with NetSuite. We had to junk the entire solution and start over from scratch. Avoid NetSuite at ALL costs!
      Verical
    • NS = little Oracle

      If Google's informal corporate motto is "Don't be evil" then NetSuites informal corporate motto should be "Tie the customer over a barrel" Ohh, and BTW that barrel contains rotting fish heads.

      There strategy is both of us know we have you tied over a barrel but if you are nice to us then maybe in the future we will tie you to a barrel that doesn't smell as bad.

      We have been an Oracle Small Business, NetLedger, NetSuite customer for over five years and we just spent a tremendous amount of money almost a year getting off of the system.

      I would STRONGLY consider other alternatives before investing in NS.
      adam1100
    • NetSuite burns the little guys

      I work for a small non-profit company that disseminates information technology access for persons with disabilities. I am the only sighted employee out of 3 total employees. In 2001 our accountant suggested we use Netledger. The cost was $359 a year. Oracle bought them out and in 2004 our bill went to $1400 a year and $4000 to have our files converted for Quickbooks. Had to manually input everything as we couldn't afford the new costs.
      betheepoo@...
      • Subscription Model

        I questioned their pricing also because I was worried about what my prices are going to be after my 60% discount expires after 4 years. Right now, the price of Netsuite is about $6,000 for the system and it does not include a user yet. After 4 years, it could well be $8,000. They justify it by saying - "as the functionality of the product improves, are we not supposed to charge more?".

        IMHO, software as a subscription should have predictable pricing. How would you feel if your newspaper subscription went for $15.00 a month to $60.00 and then to $300.00 just because they decided to add 100 more pages of classified ads?
        str1ker
    • get what you pay for.

      Reading this, it is hard to believe that my experience with netsuite could be so different. Outside of the cost of implementation a tad on the high side, I've been beyond pleased. I did my due diligence beforehand and talked to 4 different business owners running Netsuite and it's been working like a charm for almost 2 years.

      But if you're running a business and your IT budget is $1000/year (which it sounds the case for a few posters here) then you're better off sticking with quicken.
      DTURNBULL
      • IT Budget

        The fact that you can afford netsuite even at extremely high discount rates tell you that these companies have more than $1000 per year in IT budget to be able to justify such expense.

        If Netsuite disclosed everything up front and had accurate information in their website on the functionality and limitations of the base system, the disappointment levels will not be so high.

        Even in the Netsuite User Group, you read how Netsuite removes features that was previously free during renewal. Costs like these should be predictable. One user had a free user plus free site customization module when he signed up a year ago, he lost both during renewal and now has to pay $5000+ a year more just to maintain the same functionality. On top of that, the teaser discount has expired. So the costs shot up to ridiculous levels.

        When you buy Quicken this year for $449.00, you know it will not be $1000 next year. With SaaS, once you can no longer afford their price increases, you run the risk of being locked out of your own business.
        str1ker
        • so what's unclear?

          Did the customer's quote not say 'this is what it costs, this is the discount you're getting to make it free'?

          once the contract is over, where does it say you are 'guaranteed' another year of free options? you know the options you got for free are $5000....so when its time to renew, where's the suprise?

          yes, quicken is $449....LIST price. If you buy it on sale at a 20% discount you pay $359....but there's no gurantee that you're going to get the same sale next year, is there? hence, the price would rise to $449.

          I mentioned this before, with any SAAS application, if you don't want 'surprises' or 'rising prices'....step up and pay list price from day 1. SFDC, Sugar, RightNow, and yes, NetSuite etc all have LIST price sheets that haven't changed in years.
          burkejon
    • RE: NetSuite nightmares

      I don't believe this is a single instance of a nightmare with NetSuite... As a small business we too are experiencing many of the same problems after a few years on the product. NetSuite has a technically beautiful product, but if you'd rather run your business than be impressed with screens exhibiting the latest technologies, and if you want to work with a vendor who understands business as well as technology, then you may want to avoid NetSuite. Don't be too impressed and don't even consider NetSuite without an independent business consultant involved. Furthermore any price quotes you get from NetSuite beware of their use of heavy discounts off the list pricing; they may begin to remove those discounts over time.
      ttsoft
      • Discounts ususally only good for sign up

        Your reseller should let you know up front, and most of them do. The biggest problem with Netsuite is the direct sales teams are very very deceptive, almost to criminal proportions. If you want to know about netsuite, talk to a channel partner that knows the product.
        Also lock yourself in to multi year deals to secure the and insure the pricing. In most cases, once you are on it, its damn near impossible to move off. But for us Netsuite has been a Godsend.
        ray@...
    • RE: NetSuite nightmares

      We feel NetSuite is a great product! We have used the full NetSuite for 3 years and are now launching the Global Version for our International Operations. NetSuite is like any ERP, work-flow definition has to be done well and then the team must implement the solution together. We did that and are having a great experience along with 8,500+ other clients. Is Salesforce.com narrating this blog? I also find it interesting that the original complaint derived out of 1 customer based in the United Kingdom....
      hmedfort
    • Netsuite Nightmares!!!!!

      I'm a year old Netsuite user and already actively searching for a replacement. Got a 60% discount but I was promised multi-domain functionality in the 2007.1 release. They did not disclose that it is an extra module and when the 2007 upgrade finally came in, it was a 4000 a year module that piggy backs on another 4000 a year module. The system is nice. Support sucks! Unless you have a 25000 a year budget for 2 to 3 users, Netsuite is not for you. They are more mid market than SMB. Not a good feeling to stay married if the spouse wants to renegotiate a prenup annually. The pretty websites you see require a 4000 a year site builder module. Of course they don't tell you that when you sign up. Buyer Beware!!!
      str1ker
      • NetSuite the scam of the decade

        After 10 months we are almost as good as our first generation software QuickBooks. The set up team has no understanding of business at all, are total condescending, disrespectful, and smart ass?s. Beware, it the biggest smoke and mirror goes pubic scams this century.
        GM/COO
    • NetSuite not all bad

      It seems there are a few haters out there, and haters tend to go out of their way to "Warn" the masses. I mean some of this stuff I am hearing smells like spam (One guy said Aplicor was his answer? PULEEASE). I can sympathize with some of the stories I hear as far as the price increases and the standard features that go up after they make them into "Modules". This is a criminal practice in my opinion that Netsuite really needs to get a hold of.
      The truth is, for us and alot of others, Netsuite IS the end all be all of software. Period. After major price increases, we too looked for another solution to move to. Guess what, there is NONE. If you want a web based system, that can do everything for your company front end to back end. I have not found one yet, and further I bet if someone suggests one, I have thoroughly evaluated it or it costs more than our company grosses in 1 year by the time you slap 3 systems together and get them to play nice. Believe me I wish there was a competitor for Netsuite out there to keep em honest, but there is none.
      Sure I think that their pricing has gone waaayy out of control, and it is no longer even an option for some small businesses anymore. But at the end of the day, our system does more work for us, than any 2 employees combined, we have on staff(Sorry guys!). So the fact that I pay Netsuite annually about 2 months salary of a typical employee is not a problem, its a bargain.
      No it may not be for you, but I'll put out a challenge. Show me a system, any system, that is perfect and does not have a bunch of haters out there.....I believe you may waste alot of time looking because it does not exist, guaranteed.
      ray@...
      • Netsuite Sales Reps, Costs and Options

        Ray,

        I agree with you on the Netsuite sales reps. I wish I had dealt with a channel partner. In my opinion, their sales practices also borders on the criminal.

        For all the bad press Netsuite is getting here, I have to say it is a very good product if the sales reps would sell it honestly and the website would disclose all the features and options. Right now, trying to leave Netsuite like a plague not because It is not working for me but I just don't trust the company.

        I have checked out open source offerings but their systems are geeky at best. I have not had a chance to check out Netbooks (www.netbooks.com). The product launched this year (Sept 5) so I'm not expecting the same level of functionality with Netsuite. Webstore capability is slated for Jan 08. Their price is $200 per month for 5 users and $20.00 for each additional user. Once you sign up, your rates are locked in as long as you stay a customer. No short term discounts to worry about and NO PRENUP negotiations at the end of each contract. This feels so much better than the "hold hostage" terms I'm in right now. It is uncomfortable to trust your life in a company that behaves "criminally" as you remarked.

        I have tried to reason with my rep, who transferred me to her sales manager then I got transferred to another department. After about 2 months of email exchange and phone calls, I finally given up. You'd think that after I caught them in the deception, they would make things right. IMHO, the "criminal" behavior you are referring you is quite systemic. All 3 of them sing the same tune.
        str1ker
        • Lets keep it Apples to Apples, OK?

          someone else mentioned this topic on here already, but I'd like to respond to your response.

          You get what you pay for...you admit yourself NetSuite works for your business, and other options don't. Open source systems, and on-premise systems (that small businesses typically can't manage due to limited IT resouces) just don't have what NetSuite does all under one umbrella.

          So you look at a newcomer to the market and compare their entry level product pricing model to NetSuite's? That's not apples to apples....its not even the same food group.

          $200/month for 5 users and $20/month/user after that....so 10 users for $3600 year??? That's their LIST price...so of course the price isn't going to go up, there no room for price negotiations there.

          Like the other comment said, if that's your budget, stick with Quicken. And the only thing your NetSuite rep failed to do in your specific situation was to DIS-qualify you as a viable prospect. Instead, he/she cut you a sweet deal so you could afford a better system and you just complain about it on a public forum?

          Tell me, when you go to the grocery store and you see Bing cherries on sale for 50% off.....2.50/lbs...you buy 2lbs....but when you come back a week later and they're back to their normal retail price of $5/lbs, do you complain that the supermarket is 'criminal'?

          I've worked for 3 different SAAS companies over the past 5 years, I see the small biz customers saying the same things, just like this, at each of them. Read your contract...understand that a discount today is not a promise for a discount tomorrow....NO BUSINESS operates that way. If you want custom terms like that....get into a multi-year contract...but then expect to pay UP FRONT...you can't have it all, everything is negotiations, give and take...welcome to the business world where real systems cost real money.

          If you really don't want your costs to go up year after year, don't accept such a steep discount.....pay LIST price. SFDC, NetSuite, Sugar, RightNow...all of their pricing sheets haven't changed in years.....just the level of discounting due to competition and small businesses complaining about having to shell out $30K for a multi-million dollar CRM that 10 years ago, they could never afford anyway.

          You get what you pay for....apples to apples my friend.
          burkejon