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The VAR Guy

March 2, 2010

2 Min Read
SaaS ERP: NetSuite vs. SAP Hosting Partners?

Call it an ERP partner cat fight. While the SAP Partner Summit wraps up in Las Vegas, rival NetSuite has launched a new SaaS partner program. The new NetSuite SP100 Program offers VARs 100 percent of first-year subscription revenue. But there’s a twist. Here are the details.

According to NetSuite‘s official announcement:

For qualified new customer transactions of 24 months or more, NetSuite SP100 partners realize the entire year-one software subscription revenue, enabling them to quickly recoup costs of sale and jump-start their first half of the 2010 revenue. Under the NetSuite SP100 Program, partners also enjoy 10% margin on all renewals, establishing a recurring revenue stream that can be quite lucrative as the partners’ NetSuite business grows.

The VAR Guy is intrigued. Many VARs are certainly seeking more lucrative SaaS agent partner programs. And no doubt, solutions providers can make extra money on data and customer migrations to NetSuite. But there are some key items to note:

  • Within the NetSuite SP100 Program, NetSuite’s 100 percent first year margin offer is only good for a limited time. It’s unclear when the limited time offer expires.

  • NetSuite manages the customer billing, an approach that some VARs have dismissed while evaluating SaaS partner programs like Microsoft BPOS (Business Productivity Online Suite). NetSuite says its decision to manage customer billing should give VARs piece of mind, since NetSuite (rather than channel partners) ultimately is reliable for fulfilling the SaaS service level agreement.

NetSuite’s SaaS model has certainly won converts — including some defections from SAP and Sage environments. And NetSuite’s revenues grew a respectable 9 percent to $166.5 million in 2009 — though Wall Street is looking for faster growth and more profits.

SAP Partners Dig In

Still, it doesn’t sound like many SAP partners are ready to run into NetSuite’s open arms. During this week’s SAP Partner Summit in Las Vegas, many SAP partners vowed to press forward with on-premises SAP deployments. And those that were seeking more revenue frequently mentioned plans to increasingly promote SAP’s Business Objects business intelligence software.

At the same time, an ecosystem of Hosted SAP partners seems to be emerging. Two recent moves involve Softengine helping SAP VARs to network up and offer hosted SAP options. Also, Symmetry Corp. launched a managed services program for SAP customers.

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