NetLedger targets midsize companies

Looking to expand its market, NetLedger will launch NetSuite, an online applications suite targeted at midsize companies with up to 500 employees, on Monday.

NetSuite is an expanded version of NetLedger's Oracle Small Business Suite, which is meant for companies with up to 100 employees, said NetLedger President Zach Nelson. NetLedger will also announce version 8 of the Oracle Small Business Suite, an upgrade from the previous version.

"NetSuite is the same system as the Oracle Small Business Suite, but we turn on more features because your (larger) businesses requires it," Nelson said. Both products are integrated application suites accessed via the Web that companies can use to perform tasks from accounting and inventory management, to customer relationship management (CRM) and running an online store.

NetSuite costs US$4,800 a year for three users and $50 a month for each additional user. The Small Business Suite is priced at $1,200 a year for the first user and $50 a month for each additional user. NetLedger has about 5500 customers using the Oracle Small Business Suite and expects October to be its first million-dollar month in terms of revenue, Nelson said.

Key to NetSuite is "multiple everything," Nelson said. The expanded suite supports multiple currencies, consolidation of multiple companies or subsidiaries, and multiple location inventories, for example. In addition, NetSuite allows a user to set up online customer self-service centers and offers more advanced marketing features.

The most important changes to the Small Business Suite in version 8 are support for direct deposit, electronic fund transfer, multiple ship-to addresses, and flexible reporting additions. Version 8 also brings a revamped user interface with a Windows look and feel, plus "user centers" that allow users to click directly to a view relevant to their job, for example in sales, accounting, marketing, or support, Nelson said.

NetSuite will appeal to midsize companies, expects Laurie McCabe, a vice-president at research company Summit Strategies Inc. in Boston.

"Midmarket companies also want something easier to use and easier to deploy. I think the offer is pretty comprehensive, it is a nice fit for companies that want something integrated," she said.

Mary Wardley, vice president, electronic commerce software and CRM applications with IDC in Framingham, Massachusetts, added that "the strength of what NetLedger is doing is looking at the process from start to finish; from quote to delivery, and the process along the way that has to be automated."

MiniCo Inc. based in Phoenix is a 65-person business that sells insurance to companies in the self-storage warehouse industry. The company switched to the Oracle Small Business Suite after having trouble with Oracle Corp.'s 11i suite when trying to replace an outdated accounting system running software from Lawson Software Inc.

MiniCo had an early look at version 8 of the Oracle Small Business Suite and though it finds that many of the changes "are cosmetic," it is happy about the expanded reporting capabilities and may upgrade to NetSuite because of the more advanced reporting possibilities, said Marilyn Leslie, MiniCo's chief financial officer.

"Enhanced report writing capabilities will probably be the most appealing to our organization," she said. "We need the capability to report multiple currencies to fill our reporting needs. I understand there is also some flexibility in generating financial statements. We would like the capability to customize the look of financial statements. NetSuite promises to offer these capabilities and more."

However, users of the Small Business Suite may feel a bit shortchanged with the NetSuite announcement. NetLedger in August promised enhanced marketing for Small Business Suite users, but most features, such as the ability to segment customers and prospects and to target online campaigns from that and measure the results, are now only available in NetSuite.

"Small Business Suite (version 8) does include some added marketing features, but it does not have the ability to generate direct e-mail campaigns," said Nelson, adding that since August NetLedger made changes to its upgrade plans. "A small business probably does not need all that marketing power. That is why we decided to put it in NetSuite and not in Oracle Small Business Suite."

Record management company Jordan Lawrence Group in St. Louis has been using the Oracle Small Business Suite since July, after dropping NetLedger rival Inc. because that did not offer sufficient integration possibilities. The company was especially looking forward to expanded marketing features, said Russ Cottle, business development manager at the Jordan Lawrence Group.

"Currently the Small Business Suite does not offer marketing functions. Anything that they add will be a plus," he said. "I can understand Small Business Suite customers feeling shortchanged because of a more advanced system like NetSuite. I hope in the future Netledger will make similar advancements in both products."

NetLedger in San Mateo, California, is majority-owned and chaired by Oracle Chairman and Chief Executive Officer (CEO) Larry Ellison. The Oracle name has helped NetLedger win customers for its Small Business Suite, and gave the company credibility in a time when many dotcoms were going under. About 30 percent of NetLedger's business comes from Oracle, analysts estimate.

However, the Oracle brand has been dropped from the NetSuite name. "We want to establish NetSuite and NetLedger as a brand," explained NetLedger President Nelson.

Chief competitors to the Small Business Suite, a cooperative effort between NetLedger and Oracle, are Microsoft Corp.'s bCentral, Intacct Corp. and Intuit Inc.'s QuickBooks online.

NetLedger will sell NetSuite and Oracle Small Business Suite through its telesales organization, system integrator partners, and its other partners, which include Oracle, Yahoo Inc. and Sprint Corp. NetSuite won't compete with Oracle's E-Business Suite Outsourcing, because Oracle goes after much larger companies, Nelson said.

"Oracle may occasionally find opportunities to sell their E-Business Suite to companies with fewer than 500 employees, but their sweet spot is above that," he said.

Summit Strategies' McCabe said NetLedger will compete with Oracle, but she doubts the two will run into each other often because of the different price points and service channels. More prime competitors are Microsoft Corp.'s Business Solutions and vendors such as The Sage Group PLC with a focus on the midmarket.

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