NetSuite
Macro Level ASP Model Evolution
The market potential for ASP-delivered business applications will both attract new entrants and transform through a maturity process than can be understood in terms of evolutional generations. We expect the maturity process to result in market elimination and consolidation in three separate (and somewhat overlapping) waves.
We expect the first wave of online CRM organizations to be eliminated will be the ‘low hanging fruit grabbers’. These are the providers that resell non-proprietary software with generic hosting solutions and typically provide very limited services or partner with other organizations for service delivery. These organizations are generally expecting their business success largely as a result of the growth of the industry.
We expect the second wave of online CRM ASP organization eliminations to be ‘point solution’ providers. These “niche players” provide an overly application-specific solution to accommodate a specific business need, however, fail to provide a broad solution for the customer. These providers have one small basket to hold all their eggs. When the market changes or when a competitors product is deemed superior, they often become acquired or vanish.
We expect the third wave of elimination to remove those ASP organizations that are ‘all things to all people’. These organizations often cobble together whatever anyone asks for and really don’t have areas of excellence. These vendors most notably include publishers who reposition their products on-the-fly in order to try to both sell and rent their solutions or host their applications as a fall-back strategy when the customer demands such an offering.
Subsequent to the previously listed eliminations, the market will be left with the most strategic online CRM providers. It is our opinion and strategy that the keys to long-term success include the following critical success factors:
-
An enterprise-wide customer facing solution as opposed to a point solution. In our case, this includes the delivery of fully integrated portfolio solution (which includes sales force automation, marketing management, customer service, project office and a portal) services delivery and customer support.
-
A solution that is truly organized and optimized for online delivery. Such a solution must include online procurement evaluation, subscription pricing, online and on-demand procurement, real-time customer resources and support avenues and of course online utilization without third party bandwidth supplements, required client-side downloads, excessive local hardware or additional IT staffing.
-
A solution that can evolve and is extendable. For example, a solution that can accommodate new technology advances such as wireless operability and Web services as well as provide logical or complimentary segways into industry solutions, vertical markets or unique market niches.
-
A technology and development strategy that is composed of industry leading tools, open standards and optimized for the major infrastructure providers (i.e. Microsoft). For evolution and long-term success it is critical not to get bogged down in proprietary technologies or deteriorating tools.
-
A value proposition based on one-stop-shopping and a turnkey solution; not software and a host of third party suppliers or multiple disconnected software components. The focus must be on results, not tools. Most clients don’t care about code. They care about results, support and price. The support components necessary to be successful with this target market include implementation services, customization services, integration capabilities and customer support – all delivered from a single source and without confusion or room for finger-pointing.
-
A well defined target market. NetSuite’s mid-market target market will evolve in two phases:
-
A horizontal market targeting customers by their demographic make-ups of size (measured in revenues and employees), business needs, internal IT resources and their IT financial investment capability. As NetSuite will leverage a partner channel with an extendable product solution, our partners will advance the product into vertical markets, particular industries, geographical territories and niches.
-
A vertical markets push. The specific vertical industries are currently under consideration.
-
The recent high growth of horizontal ASP solutions and the very recent hyper-growth of hosted CRM solutions in the current economy suggest that the mid-market CRM industry is not recession proof, however, is recession resistant. In fact, research is validating that in a down economy, companies are competing for greater customer share, not market share, and highly successful companies will invest more in customer systems, not less. From the supplier side, customers are unequivocally demanding lower prices and greater value. These procurement criteria speak to the heart of NetSuite’s competitive advantages and growth opportunity.
Categories
Business Systems
Information Security
Messaging
Databases
Operating Systems
Systems Management
Tag Cloud
CRM software
ERP software
software as a service
hosted accounting software
SQL 2K5
open source crm
sugarcrm
salesforce.com
netsuite
sap business bydesign
Most Popular Search Terms
Blogroll
Meta