NetSuite & Microsoft Throw Down

NetSuite is certainly a force to be reckoned with on the ERP front, but last week Microsoft announced a plan to take on the ERP giant—fisticuffs ensued.

Microsoft threw the first punch on Thursday, when they announced an aggressive three-month plan to poach NetSuite customers. Until the end of June this year, Microsoft is offering a credit of up to $850 for every NetSuite user that switches to one of Microsoft’s ERP platforms, which are Dynamics GP, Dynamics NAV, and Dynamics SL.

Microsoft is offering a pretty good dollar incentive here, but of course, that’s not always enough for ERP users to switch from platforms they’ve invested in heavily. When making the decision to spend tens of thousands on a product, buyers will often take the best value at a slightly higher cost—so Microsoft also made this an issue of deployment models. NetSuite ERP is a SaaS delivery model; Microsoft does not offer SaaS deployments for any product in the Dynamics line, but they have some 150 resellers that do. When announcing their new offer for NetSuite users, Microsoft cited a Forrester Research study that concluded that “SaaS alone is constraining as an enterprise ERP delivery model, due to the wide variations in customer requirements.”

It’s true, SaaS ERP deployments aren’t right for every company, and it would be obtuse to think they do. However, noting that entirely SaaS-based deployments don’t work for many enterprise organizations may be falling on deaf ears with NetSuite users, who are chiefly mid-sized business users. For their part, NetSuite is unaffected by Microsoft’s announcement, and yesterday termed Microsoft an “ERP Dinosaur”—and in a memo titled “The Netsuite comet officially hits the Microsoft ERP dinosaur,” no less. Still, given the increasing popularity of SaaS-hybrid deployments, it’ll be interesting to see how many NetSuite users are swayed, and if Microsoft has any other plans to turn up the heat on NetSuite.

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