My fellow Enterprise Advocates Frank Scavo and Dennis Howlett think NetSuite is overreaching by comparing itself as an option to SAP. As Dennis points out “If and when SAP puts its foot on the marketing gas pedal, NetSuite will find that SAP’s brand value carries it a lot further in the initial RFP stages.”
No question, SAP has formidable assets in its huge functional coverage and its global reach. But it also has formidable liabilities in its economics and operational experience. Offseting its marketing gas pedal is a dated operational clutch.
SAP is the classic enterprise software publisher. It writes code and throws it over the wall to customers and systems integrators. And watches them spend years testing, integrating, training, uprgading. In many cases by charging even more for its consultants to “quality control” these projects. Wait till its ecosystem has to compete with new-age systems integrators that have emerged around salesforce.com and NetSuite.
SAP is primarily run at hosting companies and data centers that are shockingly overpriced compared to those amazon, Google and other cloud vendors have built. They are more energy efficient, in cheaper locations, have better tax incentives, are more virtualized, use more commoditized hardware etc. In some case 15X cheaper than what SAP customers pay today.
SAP is also spoiled by a SDN community which handles a number of routine support queries and is substantially staffed by employees of offshore firms funded by what customers pay for their Application Management contracts – ie at little cost to SAP. Wait till has to deliver upgrades in background for all its customers without the luxury of having each of them plan and test for months prior to executing an upgrade.
SAP has never had to publicly acknowledge like Workday recently did that it had an outage. Think how many times a day, not just a year it happens in the SAP customer base today? Just learning to be transparent is going take a huge culture shift at SAP. I mean when was the last time you saw SAP publicly acknowledge there was an implementation issue at one of its customers. The world’s worst-kept secret.
SAP is going to have to learn to do much of this itself in its own data centers, with its own transparent SLAs and with a new ecosystem of service providers. Fast. As in catching up with NetSuite and other SaaS vendors which have been doing this for years now.
BTW – SAP has at least been learning about some of these issues over the last few years as it muddles through the BusinessByDesign rollout. I shudder to think how poorly placed other on-premise software vendors are who openly mock cloud computing and just wish it would go away!
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