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Saturday, February 17, 2007

How Salesforce.com Stacks Up With Peers








CRM Update: How Salesforce.com Stacks Up With Peers

Continuing this week’s focus on Salesforce.com and CRM providers in general, let’s take a look at NetSuite. Hold on a minute, why CRM? One evident theme is the CRM companies branching out of merely sales and customer management into general business productivity applications, disrupting Microsoft’s model as it has become complacent and virtually ignored the benefits of the on-demand model. These companies are filling an obvious unmet need in the marketplace, which is why we’ve given them so much attention this week. Take my word for it—I’ve seen it on the front lines. At an amazingly successful and well-run company like Goldman Sachs, most applications are developed internally, resulting in shoddy functionality and poor UI. Employees hate it and calling the tech group wastes half the morning for some desk jocks. The CRM companies aren’t about sales or just customer management, but encompass everything from online marketing to payroll.

Let’s take a look at NetSuite, a great CRM company based out of San Mateo. NetSuite epitomizes the trend in on-demand CRM provider—they aren’t just a sales and customer management company, but are an all-around full-service business applications provider. Accounting, payroll, e-commerce, and traditional CRM are included in the on-demand package. It’s really a one-stop-shop when it comes to business applications, and makes sense considering their target market for the Small Business product is firms with 20 employees or fewer. They are definitely encroaching on Intuit’s Quickbooks accounting software, which has the greatest market share in that space. The truth is that NetSuite may offer just too much when it comes to small business, where Excel and Quickbooks can do the job. There have been some complaints about their email customer support, which should have been resolved since. Nevertheless, we’re excited for the IPO and hope to pick up some shares if it doesn’t pop too high.

2 comments:

Anonymous said...

When looking at NetSuite, be sure to realize that their foundation from the beginning was around accounting and that CRM was an afterthought that they realized they needed to offer. I only say this because you refer to them as a CRM company.

Anonymous said...

Why pay for salesforce? It is a lot cheaper of enterprise deployments because you can eliminate IT costs. The subscription model, however, add more costs on a monthly basis to your business, eliminating the benefit of putting off software purchases into the next quarter or next year to reduce costs. It becomes what I refer to as a fixed operating cost rather than a capital expenditure.