NetSuite's big target: Microsoft Dynamics and its 'fake cloud'

NetSuite's big target: Microsoft Dynamics and its 'fake cloud'

On the earnings conference call, NetSuite's most notable gucci handbagspoints revolved around competition with Microsoft. Nelson said that RightNow replaced Microsoft's Dynamics Great Plains with NetSuite. He also cited Chefs Toolbox as another NetSuite win over Microsoft. Nelson added:

Both RightNow's and the Chefs Toolbox's switch from Microsoft Dynamics Great Plains is something we are seeing a lot of these days. Recently, I attended an annual event we do for prospects in New York City. Historically, the majority of the prospects I meet at the event are replacing QuickBooks. This year, however, it was very different as almost everyone I met was replacing Microsoft Dynamics Great Plains. I think we are reaching a tipping point where mid-market cheap coach handbags customers are now throwing out the stone age software solutions from Microsoft and other providers of pre-Internet ERP software and moving to the cloud.

Of course, Microsoft is desperately trying to fight this migration. Most recently, in an attempt to respond to the demands for low cost, high productivity cloud solutions, Microsoft is offering what I call the "fake cloud." Microsoft is trying to convince customers to use hosted versions of their pre-Internet, client server-based systems like Great Plains and Dynamics. In fact, the Chefs Toolbox was using Microsoft in this exact fake cloud configuration, and their experience proved my point that the only way to make a Microsoft business application more expensive and less functional is to have someone else host it for you. And of course, this approach to the cloud of hosting old client-server applications is exactly the approach that failed around the year 2000.

Later in the call, NetSuite came back to Microsoft. Nelson was asked about competitors. He added that Sage is rarely seen in new business and SAP's Business ByDesign hasn't showed up yet. Nevertheless, JMP Securities analyst Patrick Walravens said SAP is giving NetSuite a lift. As SAP pushes gucci handbags Business ByDesign, it puts on-demand ERP on the radar for IT buyers. Walravens wrote:

While some investors might view SAP's entry into this market as a negative for NetSuite, we think it will be a positive. Companies evaluating SAP Business ByDesign need something to evaluate it against and that is where NetSuite may get a huge number of new leads. Another proof point is that Mark Benioff says in his book that the best lead generation day in salesforce.com's history was the day Siebel Systems introduced Siebel OnDemand.

Until SAP revs up more, Microsoft is the biggest target for NetSuite. Nelson argued that Microsoft was starting to be replaced. "Microsoft is very much like Sage in the number of code bases they have in general software in division and all those things. So, they're starting to suffer from the same lack of innovation that Sage is," said Nelson.

Like most vendor bluster, you have to take the comments with a grain of salt. However, the trash talk usually reveals a company's obsession of the moment. And for NetSuite that obsession is Microsoft's Dynamics Great Plains businessat least until the company sees more of SAP in the field.

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