Who runs their whole business on SaaS?

It's difficult for any organization -- even one as committed as Netsuite to the on-demand model -- to standardize on the one platform.

Is it really possible to standardize on a single platform of any kind across the board? Sometimes it may feel like you're totally committed to a given platform, but somewhere or other in the organization there'll always be an exception lurking. Just ask Scott McNealy, who for years battled the tide of PCs that constantly lapped onto workers' desks at Sun's corporate offices. Or Bill Gates, who finally got Microsoft's internal business systems off IBM AS/400s, only to end up running on SAP rather than the company's own Dynamics suite.

For the SaaS-purist enterprise, the exceptions tend to be lurking on individual PCs: data stored in Excel spreadsheets, people using Outlook for email, perhaps the odd copy of Quickbooks or some more specialist application, even sometimes an illicit server or two, hidden away in the warehouse or somewhere up in marketing.

Zach Nelson, Netsuite CEO, at our lunch in London in July

I was discussing this issue a few months back with Zach Nelson, CEO of Netsuite, a company that sets a lot of store by the notion of running your business wholly on-demand. Netsuite's partner conference begins tomorrow in San Francisco and the theme features pretty strongly in some announcements it'll be making — more on those tomorrow.

Nelson and I met in London for lunch back in July, along with Netsuite's director of PR, Mei Li (I took this picture of Nelson at the table). One of the topics we discussed was a recent Salesforce.com press release about a San Francisco-based customer that had asserted: "Jobscience, a leading developer of staffing solutions for the healthcare industry, is using salesforce.com's AppExchange platform to run its entire business from human resources and product management to marketing."

The Netsuite team were delighted that BusinessWeek's Steve Hamm had found that Salesforce.com's press release had exaggerated the extent of Jobscience's dependence on AppExchange:

"Turns out that Salesforce.com shaded the truth a bit in its announcement. Not every application at Jobscience runs on AppExchange. Not yet, anyway. [Mark Desrosiers, the company's vice president of marketing and business development] says the company still runs QuickBooks for core accounting, though a bunch of its finance-related applications are running in the on-demand mode."

This revelation played directly to NetSuite's core message, which is that the financial transaction engine — the lodestone of NetSuite's own on-demand offering — is the most fundamental component of any business system; and that Salesforce.com's application suite doesn't have one and therefore cannot be the platform of choice if you want to run your entire business on it.

Even so, it transpired in the course of the conversation over lunch that it had taken Nelson close to two years to persuade PR director Li to use the Netsuite application to manage her email messaging with media and analysts. Having finally switched from Outlook to the native Netsuite contact manager about a year ago, she was now raving about the convenience of being able to click on a contact and pull up a complete record of all her interactions with that person. But it had taken two years of encouragement to talk her into making the switch. That's a measure of how difficult it can be within an organization — even one as committed as Netsuite to the on-demand model — to standardize on the one platform.

And before you ask, yes I did check: Salesforce.com's emails to me originate from a Microsoft Exchange server.