Ten years ago, Evan Goldberg was grousing to Oracle Chief Larry Ellison about the lack of an ecommerce business management software bundle. Ellison challenged Goldberg, himself a former Oracle executive, to do something about it, and the result is the NetSuite phenomenon.
Worldwide, more than 6,000 companies of all sizes are using this server-based suite of tools to manage their ecommerce businesses.
There are other quality hosted solutions, of course. Yahoo! Merchant Services claims over 45,000 clients. Volusion has over 10,000. GoDaddy’s Quick Shopping Cart appeals to both very small and start-up firms. And there are more. But NetSuite was one of the first providers to recognize the need for extensive management and accounting tools to accompany a scalable ecommerce shopping cart suite.
“Everything we deal in is text or numerical (ASCII characters), and it is easily stored and easily processed and doesn’t require much bandwidth to upload it to our storage or output it to another system.” In other words, said Baruch Goldwasser, who is on the sales and marketing team for NetSuite, storing and retrieving data across the Internet is entirely manageable.
Put it in the cloud
In fact, when Ellison and Goldberg were talking about the issue of a single business management application suite, Ellison suggested that Goldberg come up with one application that had modules to do the various tasks and better yet put it up in the “cloud” – have it on the Internet. That way, the user could work from home, the office or an airline terminal. The result was NetSuite.
Many users say the cool part of hosted software, such as NetSuite, is that every user is on the latest version. There’s no downtime for reinstalls or new training. And, there are no upgrade bills.
There is another major difference between online applications like NetSuite and licensed software packages. While the suite of products offered by NetSuite numbers more than two-dozen, the user ends up paying only for what he or she needs.
“Almost all of our ecommerce customers use the financial and CRM modules. Pretty much any ecommerce company needs to manage their orders and financial data and most of the product oriented companies need to manage their inventory and warehouse,” said Goldwasser. “On the customer service side, everyone needs to track their customers, keep data on them and offer customer support. But not everyone needs all of the elements offered in NetSuite. We have companies with as few as two employees who pay for and use the basic elements of the suite. Conversely, NetSuite itself, which has about 1,000 employees, also uses the entire suite to manage every aspect of our company.”
The whole suite includes things like time and billing, a payroll module, shipping management and website development and management, including multi-lingual website development. The software won’t translate your product descriptions and other text, but it will translate menus and navigation as well as automatically handle the currency of the user’s country.
Not for everyone
To be sure, hosted, all-in-one solutions such as NetSuite do not appeal to all users. Take, for example, Roy Rubin. Rubin is founder and CEO of Varien, the Los Angeles-based development firm that produces Magento, an open-source, licensed shopping cart with more than 400,000 users.
Says Rubin, “Hosted solutions that provide a one-stop shop for ecommerce, accounting, CRM, fulfillment and order management typically never excel in all disciplines. With a licensed approach, an online merchant can select the best of breed applications that fits its business the best, without any compromise. An all-in-one approach creates a complete vendor lock-in on all aspects of the business – something that should send a big warning for businesses that are making an evaluation.”
Look beyond the monthy fee
When a company makes use of a server-based application suite such as NetSuite, it is typically charged for the service on a per-month, per-user basis. NetSuite is no different, and its system is also permission-based, meaning that each user has permissions assigned and may or may not have access to the same or all of the modules that another does. A company pays for NetSuite based on the actual use of each assigned user.
A small ecommerce company would spend something on the order of $900 a month for the primary financial and customer management modules.
For many smaller firms, that $900 would seem expensive. But Dale Traxler, the CEO and co-owner of Beaded Impressions, Inc., a Colorado-based retailer of jewelry-supply stores and a NetSuite customer, says merchants are remiss to focus just on the monthly fee.
“Our monthly investment in NetSuite more than pays for itself in dramatically reduced labor costs,” says Traxler. “We now operate three separate online stores with much less effort and a greater return on investment than we did previously with a stand alone shopping cart, accounting, email and order management system.”
Traxler continues, “We now have one place to look for sales, marketing, product, customer and vendor information. I have a real-time snapshot of our business operations at any time, and I don’t have to hire IT professionals to manage our site.”