NetSuite has slapped down business software rival SAP for abandoning mid-market customers hungry for Software as a Service (SaaS).
Zach Nelson, NetSuite chief executive, said SAP’s decision to stop developing its Business ByDesign service proved the danger of relying on a “last generation provider” like SAP for cloud services rather than “committed leaders” like NetSuite.
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He called Business ByDesign an example of a service as a “PowerPoint presentation", sniping in the earnings call: "It is far safer for customers to turn to committed leaders like NetSuite rather than bet on the PowerPoint presentations of last-generation providers like SAP, Microsoft and Sage.”
He was spoke up after SAP on Tuesday confirmed Business ByDesign would be getting no more major updates and would instead slip into fix and maintenance mode.
Announced by SAP in 2007 with boasts of attaining 10,000 customers, Business ByDesign limped to just 785 customers, despite a downgraded target of 1,000.
Nelson's snappy comment came in the wake of his own company – which sells ERP through a hosted SaaS model – announcing record third-quarter results. NetSuite announced sales grew 34 per cent to $106.9m in the quarter. Net losses were greater, however, at $16.8m, or $0.23 per share, versus $8m, or $0.08, a year ago.
“This week has been a tale of two companies,” Nelson said in his statement announcing the results and turning on SAP.
“As NetSuite’s Q3 revenue set a new record, while SAP effectively exited the business of providing software for mid-sized companies as they scale back their Business ByDesign product, which they once hyped as a NetSuite-killer." ®