In our initial two posts (Part
One - Streamlined Business Process and Integration and Part
Two - Real-Time Financial and Operational Visibility) on this topic we
discussed how NetSuite positions itself against Microsoft Dynamics GP in the
sales process. Our initial discussions focused on business process integration and
real time operational data accessibility. The next topic I would like to discuss
is how NetSuite claims to have the upper hand in:
Total Cost of Ownership
Once again, according to their website, NetSuite claims
that "Microsoft Dynamics GP can prove to be an expensive and time-consuming
business solution-both in the long and short term. With Microsoft Dynamics GP,
customers pay large fees upfront for the software and implementation. But the
costs don't end there. Many of our customers who have switched from Microsoft
Dynamics GP tell us that the escalating costs and complexity of running their
business software environment using Microsoft Dynamics GP was a key reason for
The specific areas that they cite to support their claims
fall into the following areas:
Let us look at how Microsoft Dynamics stacks up to
NetSuite in these areas.
of running their business software environment
NetSuite makes a compelling argument here due primarily
to the fact that relatively speaking they are the "new kid on the block". What
they have done well is establish that there is a market for the SaaS delivery
model for ERP software. Microsoft and the Dynamics GP delivery channel has
suffered from being a late adopter to that business model and from presenting a
confusing array of "SaaS" options that in many cases have not been as cost
effective or technologically desirable as the NetSuite solution.
To get a better understanding of the different types of
"SaaS" models there are many excellent discussions found at ERP SoftwareBlog with a quick
While comparisons to some initial options for delivering
Dynamics GP in a SaaS model will indeed yield valid TCO differences that is no
longer the case. With dramatic changes in pricing, technology and delivery
options that gap is rapidly shrinking and may already be immaterial.
on premise versus software as a service software (SaaS) delivery model
By its very nature the SaaS model exists because it
reduces the cost of maintain your own internal hardware and IT function.
Therefore, comparing on premise software to a SaaS offering truly is comparing
apples to oranges. A true TCO comparison has to look at NetSuite versus the
latest Dynamics GP pricing model and SaaS delivery options.
There is literature available that supports both the
NetSuite case as well as the Dynamics GP case. My guess is that how the numbers
crunch out is based on what point you are trying to make. The key is to figure
out the source of the information and what axe they are trying to grind.
An interesting point that can easily be overlooked here
is that with Dynamics GP you have an option of on premise versus SaaS. With
NetSuite you do not. It is therefore in their interest to spin the conversation
in a matter that compares the all Dynamics GP implementation, in particular on
premise, to their SaaS offering.
The truth is that some people still prefer the on premise
model or the freedom to move between SaaS and on premise and back again as
requirements dictate. In some instances I have had clients that use the SaaS
model as a "test" and then switch to on premise when the software decision is
finalized. In this case the SaaS model acts as an insurance policy to make sure
the right solution is selected.
provided by a VAR versus NetSuite datacenters
Once again this is an area where NetSuite has a great
The demand for ERP software delivered in a SaaS model
prompted many forward thinking Dynamics GP partners to set up their own "datacenters".
Were some of these less than spectacular in comparison to what is today
commonly expected from a tier one datacenter? That is certainly the case but
several partners set up excellent SaaS offerings with datacenters, security,
services and pricing that are at a level that people expect from banking level
transactions "in the cloud".
Microsoft is now jumping directly into this space with
its own datacenters than can deliver Dynamics through the partner community via
their Azure platform. I will
look for the inevitable posturing on whose is bigger. With these excellent
options in place the argument that NetSuite delivers its software from a
"better" datacenter becomes another moot point.
native SaaS delivery model
What does this even mean in terms of practical interest
to an ERP customer?
If I am able to safely and securely process transaction
in my ERP application locally and remotely in a price effective manner does the
underlying technology really matter? My experience is that it does not but
technology folks love to argue about what is "the best" even if it is
irrelevant to the user.
If a web based client creates a "do or die" situation for
deciding on an ERP solution then everyone should be happy to know that the Dynamics
GP 2013 version will include a web client. What I like about the Dynamics
GP web client in particular is that it looks just like the desktop or client
version of the software. So no user interface re-training is required. Compare
that to NetSuite, oh sorry, I forgot that they don't have an on-premise
My educated guess is that NetSuite will release
information on how the underlying technology on their software delivers their
application in a superior manner. Let the tech wiener braying commence. The
line starts to the right for bets on how long we need to wait for this "sales
messaging" to start. I'll wait.
Let's spend a little time in our next post discussing
what really drives TCO.
Peter Joeckel is the President and Founder of TurnOnDynamics a
Microsoft Dynamics GP (formerly Great Plains) and AX (formerly Axapta) partner primarily
servicing the Texas, Oklahoma, Louisiana and Arkansas (TOLA) area. While it
serves a diverse customer base TurnOnDynamics does have specialized expertise
in selecting and implementing advanced ERP solutions for manufacturing and
Additionally, TurnOnDynamics is an investment and
advisory firm that focuses on the strategic concerns of executives and owners
with unique Dynamic CFO Services.
Excellent series so far Peter. I hope it is getting alot of attention. About time someone shed light on this topic.
Excellent series and a well balanced perspective. You have provided excellent and well needed insights in this area. I would take issue with your comments on "Web native SaaS delivery model" as I think they miss the CIO perspective, but otherwise I'm a believer.