Netsuite responds to customer issues

Last week I heard from Craig Sullivan, Netsuite's VP international products. He wanted the opportunity to respond to my Netsuite nightmares part deux post. Craig thought I was a tad unfair and did not have all the facts. Both those statements are true but then I didn't set out to be fair or balanced. I used the blog as a way of expressing the frustrations experienced by certain customers lightly balanced (if I can use that term) by an account from a reseller. I explained to Craig I continue to receive a steady stream of stories claiming poor treatment but I also accept that there are always three sides to a story. The two are he said, she said with the reality somewhere between the two.

Craig bravely agreed to put down his thoughts in writing and I agreed to treat sensibly. Here is what Craig said along with my notes. I have excluded comments regarding issues with Nurse Staffing Unlimited because they walk into 'he said, she said' territory.

As a general comment, while I recognize your post draws from the feelings of a few individuals, it does ignore the fact that the majority of NetSuite’s customers are happy, and many, in fact could not imagine running their business with any other application.

Speaking more specifically, I’d like to comment on a few statements in the post, as well as address the concept of "overselling" raised in the article.

Every application software goes through a period when one horror story or another emerges and catches editorial attention. SAP, Oracle, PeopleSoft, Siebel, iTwo...the list goes on. They've all had serious issues of one kind or another and in some cases still do. This is symptomatic of what happens when you bring complex software to market. That doesn't mean they're behaving in an egregious manner as a matter of course but it does point to issues worthy of review.

With respect to the pricing questions raised in the post, our pricing is actually quite transparent. There is nothing hidden in our pricing or renewal terms. Everything is set-forth in the contract that the customer signs. In addition, charging separately for advanced modules is designed to keep prices as low as possible for the majority of customers, and we actually got the idea from our customers. Not every customer needs advanced financials, revenue recognition, or advanced eCommerce, for example, so we break these modules out so companies that don’t need them don’t pay for them.

The impression I get from customers is that Netsuite lowballs to attract customers and then stiffs them for additional functionality. The main accusation is that customers do not feel they receive comparable value. Many of the people who have contacted me are small businesses. They don't necessarily have the legal firepower to go over the fine detail contained in contracts that large enterprise customers pore over. Caveat emptor.

Now on to the suggestion in the article that some salespeople "oversell" our software. Having been with the company for 8 years, I really don't think that is what is happening.

Craig' entitled to his opinion but this is something that's almost unanimously rejected by complainants.

The spirit of NetSuite has always been to help customers succeed. We will do anything to make that happen, from giving a discount so the customer can afford the product (and apparently one of the people quoted in your story thinks that is a bad thing!), to giving away professional services hours to help make them more efficient in their use of the product. In the sales cycle, perhaps this spirit manifests itself as an over-eagerness to say "yeah, we can help you solve that problem."

However, in the vast majority of cases, we do solve that problem. We spend many days in demonstrations with prospective customers before they buy showing them exactly how we can meet their needs. But NetSuite automates the most important, most core business processes in a company – the processes by which they actually deliver their goods and services to their customers. This is an extremely complex problem to solve, and occasionally there are problems matching NetSuite to the unique processes within a company.

From what I have learned, Netsuite does a good job in manufacturing, wholesale and retail situations but is not wholly suited to service organizations. This is not uncommon. You'd have said the same about SAP at one time. Similarly, it is a fact that smaller businesses have processes that are no less complex than their larger cousins. Even today, standard packages rarely offer more than 30% of the total functionality a business might need out of the box. Customers should be aware that customization comes at a price and often one where the benefits take time to materialize. This is true of all packaged application software and is a reason why I am seeing a small but perceptible trends towards open source alternatives where you get to roll your own apps.

NetSuite succeeds in not just meeting the vast majority of our customer’s needs, but in transforming their business. I would respectfully point out the two pretty powerful examples of that announced just this week. See, for example, an anouncement that shows the enormous value NetSuite is bringing to ecommerce customers, processing transactions totaling $500 million in 2007. In addition, the well known retailer The Art of Shaving, detailed the pivotal role NetSuite has played in their growth.

No software vendor is spotless. If that were true then Mike Krigsman's Project Failures blog would not exist. A small but highly vocal minority are more than annoyed. That doesn't happen unless there are issues that are not being resolved to the customer's satisfaction.

Finally, as a subscription business, our customers get to vote on us every time they renew their subscription. We are delighted that each year the vast majority of our customers do so – an indication that they believe NetSuite is the best management system available to run their business.

Once you buy into ERP, it's a devil's own job to switch out to a new provider. I've seen many cases where the obvious answer is to move on yet the angst involved is often too great for many companies. Instead, they limp on with software that fails to meet expectations. I have seen cases where Netsuite has made it very difficult for companies to get access to their data when trying to make a switch. They argue the data is always owned by the customer but that access has to be paid for. In other words, if you want your data out, make sure you do so before the contract expires.