New initiative aims to poach Salesforce customers, but analysts are sceptical
vnunet.com, 22 Oct 2008
The battle for supremacy between on-demand business software providers NetSuite and Salesforce.com heated up today after NetSuite launched a new initiative to prise customers away from Salesforce.com's CRM software.
The NetSuite RenewForce Program will give all Salesforce.com customers currently using the Sales Force Automation (SFA) offering the opportunity to switch to NetSuite CRM+ at a cost guaranteed to be 50 per cent less than their current Salesforce.com implementation.
Customers switching to NetSuite will also benefit from a greater breadth of functionality, including cross-selling and up-selling automation, sales order generation and integrated email marketing, according to Toby Davidson, director of professional services at NetSuite.
"Every business will currently be looking at ways to maximise efficiency, drive down costs and increase productivity by removing inefficient processes or applications they have in their infrastructure," he said.
"We are talking about opening up our functionality at a cost they can afford, against a product that does not necessarily have the same breadth of functionality."
Davidson added that NetSuite would also throw in 100 hours of professional services to help firms make the switch more easily.
Salesforce.com SFA customers must show proof of renewal cost to qualify for the deal, which is currently valid until the end of the year.
However, experts were sceptical as to whether the promotion would actually tempt Salesforce.com customers to migrate to NetSuite in any great numbers.
David Mitchell, of analyst firm Ovum, argued that similar moves by SAP and Oracle to poach each other's customers have largely failed because licence fees alone often form 20 per cent or less of the total cost of ownership.
Issues such as the prospect of staff retraining and business process entanglement in existing software can provide significant barriers to change, he added.
"There are also data migration costs and quality issues, and if you've customised on top of Salesforce, can you take that with you? Not without cost," Mitchell argued.
"This [initiative] is a strong argument for marketing but is not going to be enough to change purchasing behaviour."
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