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By | Gavin Clarke 9th May 2016 12:33

NetSuite CEO: 'It will be $99 forever for every user'

Commits to permanent per-user price freeze

NetSuite has ruled out following its business-apps-as-a service peer Salesforce in hiking prices for customers.

Zach Nelson, chief executive since 2002, has fixed his firm's monthly per-user pricing – currently at $99 - in stone. Business-cloud software rival Salesforce has increased its core pricing, stable and barely changed for a decade, earlier this year.

Not that that doesn’t mean increasing prices in other areas for NetSuite customers.

As NetSuite adds new features and capabilities, the price of the newly enhanced services would increase.

“We will definitely raise prices – when we bring in new functionality, as an example with increased capabilities, we charge a higher price than our old billing because it’s solving a new problem,” Nelson told The Reg.

However, he drew the line at bumping up the monthly, per-user price.

“It will be $99 forever for every user,” he said.

The commitment comes as NetSuite expands, thereby taking on increased costs.

As the company expands NetSuite will be following Salesforce by continuing to make a loss.

NetSuite last month announced a first-quarter loss of $29.7m, $0.37 a share, versus $22.7m and $0.29 a year ago, on revenue that grew 31 per cent to $216m.

On a non-GAAP basis - that is, with various costs not stripped out - NetSuite claimed profit of $9m or $0.11 per share.

The firm last month opened a new office serving The Netherlands, Belgium and Luxembourg while also announcing a version of its NetSuite OneWorld for Benelux.

Nelson wouldn’t give a date for if, or when, his company would make a GAAP profit.

“We are trying to balance rapid growth with expanding margins,” Nelson told The Reg.

“All investors want to see growth rate and progress… we have shown it this year and shown it in the past. We are growing at a decent rate. They [investors] are very comfortable with us growing.”

Expansion and growth comes as an array of competitors, some new and some old, show increasing signs of coming after NetSuite’s potential customers.

The firm has made much of grabbing Sage users growing up and filling the ERP puzzle in the offices of big firms running Oracle or SAP at the head office.

SAP and latterly Oracle have sought to respond to the challenge from business-as-a-service with online versions of their software or buy buying web firms offering aspects of the business software puzzle through a browser.

Still, Nelson was dismissive of what he’s seen from both.

“SAP still doesn’t have their act together,” he said. “All their clouds are acquired... we have sold a lot of NetSute to Oracle and SAP customers who already have the right to use every product and they still pay us. It’s going to get more competitive, but all our investment is going into one product not 30 code bases.”

Also he dismissed possible incursion from Salesforce into ERP.

The CRM-as-a-service player has partnered with the likes of Sage and Fairsail on non-CRM and on platform while there’s talk of Salesforce’s need to go vertical.

NetSuite also offers CRM.

Nelson, however, reckons NetSuite’s CRM focus in on machine-to-machine and Internet of Things (IoT) rather than business-to-business.

“It’s hard for them to do [more into ERP] because they don’t hold the business data. Once you get the ERP system, that’s the system of record,” he said.

"It’s very hard to build ERP after the fact; it’s easy to build CRM after the fact.”

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