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 customer relationship management in 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 CRM is 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:
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 solution. 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), and hence the different aspects - Sales Cloud, Service Cloud, Marketing Cloud and more. 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 system, 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:
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 and online ERP solutions.
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 robust CRM solution. Reviews of the CRM are good. It offers everything from email marketing to real-time dashboards. It's a credible tool to facilitate customer relationship management.
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.
Some takeaways:
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!
