SAP Watch

Apr 15 2009   12:36PM GMT

SAP to NetSuite: “Impact on our business is negligible”

CourtneyBjorlin Courtney Bjorlin Profile: CourtneyBjorlin

 NetSuite’s latest attempt to poach customers from SAP finally struck a nerve with the enterprise software giant, which Tuesday offered its point of view on the SaaS vendor’s new Suite Cloud offering for SAP customers.

 NetSuite is trying to gain business from subsidiaries of large SAP customers by offering them SaaS ERP, along with packaged integrations to tie the software into the main SAP back-end. Moreover, customers have the option of deploying just one piece of NetSuite’s software, such as general ledger.

 Yet, SAP’s not worried about NetSuite affecting its business, according to spokesman Bill Wohl. “The potential of NetSuite having an impact on our business is negligible at this point,” he said. Wohl even poked fun at NetSuite’s viability by asking, “will they be [another] acquisition candidate of Oracle?” (Oracle CEO Larry Ellison owns a majority stake in NetSuite, and it has yet to take similar jabs at Oracle.)

 But NetSuite’s suggestion that SAP subsidiaries only want SaaS software was concerning to SAP. This isn’t the first time NetSuite has targeted SAP — or sought to exploit the delay of Business ByDesign, it’s SaaS ERP.

 “There’s a lot more to the decision process than just the way [software] is consumed or purchased,” he said. [NetSuite's saying] ‘Hey we’re on demand and therefore that’s cool and therefore, you should buy us.”

 “We still believe that the way you consume software, whether hosted, on-demand, through the cloud or on-premise, is less important than the other considerations in the buying decision,” he said, including connected business processes, proven functionality and long-term viability.

 Just because its SaaS ERP Business ByDesign hasn’t been made generally available, doesn’t mean that its large customers don’t have SAP options when it comes to subsidiaries, Wohl said. They’ve been running SAP Business All-in-One and SAP Business One, SAP’s flagship ERP software for small and mid-size companies. Wohl even said that customers can pick and chose functionality from SAP Business All-in-One and SAP Business One, an option that analysts thought would be attractive in the NetSuite offering. 

 And just because Business ByDesign was originally targeted at new customers doesn’t mean subsidiaries of existing customers can’t run it, Wohl said.

 Wohl assured me that Business ByDesign is still coming. But does its continued delay matter? Are niche players like NetSuite picking off SAP customers because they want another deployment option? Is its impact SAP’s business negligible?

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