Dennis Byron (Research 2.0)

NetSuite: Not as Well Positioned as Larger Players

Halo30K -

Thanks again for time you put into your comments.

Most important, here's hoping you didn't buy "N" at the top on the day you wrote the first post :) As for the historical points in your comment, I think you are violently agreeing with me?

1. You say SAP was not involved in BPEL but you link to a page that correctly tells about SAP's involvement? But, anyways, the real point is that SaaS has nothing to do with the architectural and technical underpinnings like BPEL. SaaS is just how you sell it.

2. Based on my experience I can compare SAP in 1980-1992 with D&B, MSA, M&D, etc. Specifically SAP did close to $300 million in sales in 1992, and clearly played in the same league with the guys you mention. The real point is, as you say, SAP was a "mainframe ERP" company and not a newcomer to the market when the C/S era started.

I think your overall thesis is that a new crop of application suppliers emerges in each architectural generation. That is true historically.

You also note that the same is happening in what you call the SaaS era, what I would call the SOA era. That is also true although not to the extent we saw at the beginning of the C/S era or during the dot-com boom (which is where Netsuite comes from by the way).

And finally you believe that this new crop will replace the old because of architectural decisions (first comment) that the new crop of suppliers has made or new terms and conditions decisions (second comment) that the incumbents fail to embrace. That is not true historically.

SAP, Oracle (and Microsoft) might fail to make the move to the next historical phase of the ERP market but that is not predetermined by past architectural decisions or by the introduction of new terms and conditions. Each has already come through multiple architectural phases, and multiple business models, to lead the ERP market.

Thanks again

NetSuite: Not as Well Positioned as Larger Players

Halo30K

Thanks for the comment. At Research 2.0, we agree with your analysis that the SOA-ERP market will follow the past lifecycle of legacy-ERP followed by CS-ERP followed by Internet-ERP. (SaaS is just how you buy it to us but we agree with your wave theory.) The report that this blog post references goes into more detail.

But your analysis that the old dogs can't learn new tricks (and therefore the next era will be dominated by a lot of new names) isn't historically accurate. In the past, typically only one new name has broken through per era. SAP did not just emerge from the fields of Waldorf in 1992; it had been into mainframe ERP for 10-15 years before that. Edwards certainly made the transition from legacy (System/38 in its case) as well. Most of the original Microsoft stuff was monolithic too, but on a PC. Peoplesoft was the breakthrough application vendor of the client/server era. Siebel was the breakthrough application vendor of the Internet era.

We also agree with your comments about BPEL (invented by SAP) and open source software. One of our concerns about NetSuite, detailed in the report, is that it is not doing enough in these new technology areas.

Thanks again.