NetBooks Targets the 'S' in SMB

Targeting a perceived gap between what small businesses need and what SMB applications provide, QuickBooks creator Ridgeley Evers on Wednesday launched NetBooks, a CRM tool designed specifically for what he calls "the true small business." Delivered via software-as-a-service (SaaS), NetBooks is designed to allow small-business owners to manage the entire operation without heavy investment in IT equipment and staff, according to the company. Evers says part of his inspiration for NetBooks was that his previous creation, QuickBooks, never addressed the business owner's problems directly. "The True Small Business, or TSB, is a company of two to 25 employees, owner-managed and owner-funded, growing organically, and typically holding inventory," Evers says. "By that definition, there are about 5.1 million TSBs in the United States, not including the one- or two-person desktop-and-mouse operations. They employ about half the U.S. population--and this segment has largely been ignored since the birth of the computer." NetBooks, headquartered in Rohnert Park, Calif., is built around the precept that the majority of today's business products are focused on delivering enterprise-class power, which is mostly beyond the needs or capabilities of smaller organizations. "Small business is a vastly underserved market, because the software industry splits the world into two segments--enterprise and consumer," Evers said in a statement. "But simply stripping features out of enterprise software and dropping the price doesn't meet the needs of a small business. [SMBs] need a solution that is tailored to their unique requirements: similar breadth of functionality, but affordably priced and optimized for ease of use." Accordingly, NetBooks purports to provide these smallest of businesses with a wide range of functions, including:

• sales management;
• CRM;
• vendor relationship management;
• inventory and production management;
• shipping records;
• bookkeeping; and
• reporting.

Pricing is set at $200 per month for up to five users, plus free accounts for the customer's bookkeeper and accountant. Each additional user costs $20 per month, and Evers vows there will never be extra charges or premium editions associated with membership. Partner-provided functionality will only cost the price of services rendered, such as UPS shipping fees. (In addition to UPS, launch partners include authorize.net, PayCycle, and Vertical Response.) NetBooks also seems to be adding a new meaning to the service part of SaaS: Membership includes access not only to cold code, but to warm bodies as well -- which NetBooks calls "concierges" -- for acclimating new users. "Working closely alongside the owners, NetBooks concierges ensure a smooth and effective transition" from disconnected applications to the on-demand suite, according to the company. "Located at NetBooks headquarters, concierges have extensive backgrounds in bookkeeping and operations for a wide variety of small businesses." Evers says the true value in SaaS isn't hosting -- and that its second "S" should stand for "support." The NetBooks screen includes a help button that connects to a concierge for chat; if chat won't suffice, the concierge will be prompted to call. The rep who calls will have available the relevant information on the user, including what data permissions he or she has, and will see the same screen as the user. Early reaction to NetBooks' approach is positive. "Not that many players are providing end-to-end functionality that serves this part of the market," says Sonal Gandhi, an analyst with JupiterResearch. "NetSuite is one, but their customers skew toward the larger end of SMB and into the midmarket." It's worth pointing out that NetBooks is not the first company to promise functionality with ease-of-use and low cost. "The trend is to offer SaaS to SMBs, presenting it as more cost-effective and requiring less infrastructure," Gandhi says. "NetBooks is trying to distinguish itself further by saying smaller businesses need lots of help, and catering to the owner who must perform multiple duties." Whether this will play well, she adds, remains to be seen. Related articles: Feature: The 2007 Market Awards: Small Business Suite CRM The small-business themes of this past year have been partnership and verticality. The New SMB: The Smart Midsize Business As their needs grow more complex, SMBs are turning to a wider array of information in order to make educated product and technology choices. SMBs Are Embracing Enterprise Software New research reveals that enterprise and CRM software isn't just for the big boys anymore. Beyond Office 2007 Despite a strong market with several options, small businesses are still warming up to the idea of online personal productivity software. This Little SMB Went to Market SMBs are turning to specialists for products and services to help themselves take advantage of the Web. SaaS Is a Four-Letter Word for SMBs Adoption of on-demand solutions by SMBs continues to increase, but many smaller companies are still wary of the concept of software-as-a-service, according to a new study. SMBs Find Commonalities and Differences Small and medium businesses have similar broad needs when it comes to IT and growth, but the specifics are not so close; considering them one group may be a mistake.