NetSuite vs. Salesforce are two extremely popular software options. The origin or how these two evolved is very different, yet we find similarities, and both are targeting similar client demographics with similar offerings.
Many organizations embarking of ERP software selection processes feel as though they need to focus on the “bigger” ERP systems. But the market is full of options beyond the typical SAP S/4HANA vs. Oracle ERP Cloud vs. Microsoft Dynamics 365 conversation. NetSuite and Salesforce have both proven to be viable options for organizations ranging from smaller organizations to larger, multi-national organizations.
If you haven’t looked at these products in a while, your gut might tell you that Salesforce is a well-known CRM, and NetSuite an ERP solution targeted to smaller businesses. While this was once the case, the story runs deeper, and both have ambitiously grown into something more. More capabilities, more market share and more ambiguity.
Let’s take a fresh look at how and if they compete:
The Salesforce CRM coming of age
Salesforce played a big part in pushing CRM adoption levels to new heights and continues to do so. It’s estimated that over 90% of businesses now use some type of CRM software. While this didn’t happen overnight, all but the smallest businesses have gravitated to CRM technology. Salesforce has built the “Cadillac” of CRMs. It comes with a premium price, hefty annual increases and is described by many users as not being intuitive. It’s also the most powerful CRM out there.
While Salesforce originally started out focusing on basic CRM functions, options and capabilities have expanded exponentially. Think advanced sales reporting, call scripting, partner portals, etc.
The underlying story, however, is how Salesforce is evolving beyond CRM functions into the ERP space (which will lead into our conversation/comparison with NetSuite). From humble beginnings dating back to 1999, it was started by former Oracle influencer and employee Marc Benioff. The goal was always to be SaaS or cloud based.
This is one of the stronger commonalities when compared with NetSuite. They were both built for the cloud, and both ahead of their time. Clearly a disruptor, Salesforce’s early competition was on-premise CRM software solutions, and their gutsy cloud model proved to be abstract to many, unproven to others, and genius to some. Chalk one up for Salesforce.
Not content with having created a better CRM, Salesforce has expanded their capabilities to match their lofty sales goals. This is being achieved through development, acquisitions and complementary partnerships. The Salesforce Platform has an option called Salesforce ERP. Software vendors have built systems around Salesforce. Rootstock manufacturing software is an example of a cloud ERP built on the Salesforce Platform. Salesforce is now in the ERP arena.
A few takeaway points:
- How big and how fast they will grow in this vertical remains to be seen, but don’t underestimate “the force.” Either way, they provide an alternative to other ERP systems such as NetSuite vs. Microsoft Dynamics 365.
- Finding quality implementation resources is and will continue to be a challenge. Some have likened learning the Salesforce infrastructure to programming
- The market reach of Salesforce is broad. Their customer base spans from small to bemouth-size companies. They have more contracts with more companies than NetSuite. They are not without competition. HubSpot CRM software migrates more former Salesforce customers to their platform than any other CRM.
- Their architecture potentially offers more flexibility (think choices) than NetSuite – but with flexibility often comes complexity
- Be prepared to “help yourself” with online tools if you have questions or issues … let’s just call it reportedly less than helpful. It’s not unusual for companies to have to dedicate a full-time administrator to Salesforce (to run reports and advanced functions)
- There are other quality CRMs and ERP systems at more reasonable costs
NetSuite lifts Oracle to the cloud
NetSuite was founded only months before Salesforce in 1998 by Evan Goldberg. Both companies shared an early transformative vision of what cloud and SaaS model solutions could do. NetSuite is widely recognized as the first software company focused on cloud computing. Initially NetSuite was positioned as an ERP for small to mid-size business, especially those lacking their own IT infrastructure. This was especially attractive to smaller startups. Today with more capabilities than ever, we’re seeing the software move upmarket.
NetSuite’s relationship with Oracle has had serval touchpoints over the years, with Oracle eventually purchasing NetSuite in in 2016. No doubt the acquisition was especially attractive because of NetSuite’s expertise with cloud architecture.
When you’re as big as Oracle, sometime acquiring a capability can be quicker than building it, although we’re now seeing significant movement in the development of Oracle ERP Cloud. Oracle appears to have left NetSuite alone to do what NetSuite does best. However, the financial backing from Oracle should not be underestimated. The failure rate for acquisitions (or mergers) is somewhere between 70 and 90 percent. Chalk one up for NetSuite.
NetSuite was built from the start as a complete ERP that includes a CRM. Reviews of the CRM are good. It offers everything from email marketing to real-time dashboards. It’s a credible relationship management tool.
NetSuite directly offers implementation and support services for their ERP software. In our opinion they’re sometimes known to overpromise and underdeliver (picture promises of rapid deployment).
Additionally, like Salesforce, external quality resources remain a challenge to find. We’ll save the fragmented VAR ecosystem talk for another day. Look at it this way – good resources proficient with NetSuite implementations are probably already booked. Yet another reason to tap into independent, agnostic consultants that Third Stage Consulting can offer.
- You get a good CRM included with NetSuite; user acceptance and lower cost being two of the bigger drivers
- Salesforce can be integrated with NetSuite. The bigger question is why, unless your company has unique customization and reporting needs
- Because NetSuite is a more “packaged” single ERP, it might be described as more vanilla. With that said, there is no shortage of industry specific compatible apps
- NetSuite continues to mature and develop showing no signs of stopping
- Onboarding is not as straightforward as you’ll be told – and you will need an Organizational Change Management (OCM) plan, as well as multiple rounds of training
- Product pricing is somewhat of an enigma. We can’t even begin to explain the deep discounts you’ll be offered, quarter-end incentives, etc. Get an independent consultant in your corner to negotiate this for you (yes, we know the true pricing).
- Because these implementations can be particularly challenging given the points above, preparing for your NetSuite implementation is extremely important.
NetSuite vs. Salesforce: And the winner is …
Purchasing software is not the hard part in the NetSuite vs. Salesforce conversation. Selecting and successfully implementing software that is going to support your company’s strategy is the challenge.
We’ve provided you with a nontraditional comparison. We hope it’s been thought provoking. Either software could work, depending on company needs, wants, budget and structure. We have implemented both with success, thus our opinion comes from experience.
We don’t sell software. We give unbiased advice on the dynamic and fast-changing world of ERP and the resulting digital transformations. Please feel free to contact us for a confidential and informal conversation. We are happy to help!