• April 2, 2009
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

NetSuite Connects Two Clouds

Software-as-a-service (SaaS) business application vendor NetSuite today announced SuiteCloud Connect for Salesforce.com, a series of integrations built by NetSuite partners that lets Salesforce.com customers integrate their CRM functions with ERP, e-commerce, and other NetSuite specialties.

SuiteCloud Connect for Salesforce.com is arguably the first big news to come out of NetSuite's recent debut of the SuiteCloud Ecosystem, the company's SaaS development platform and marketplace. By hooking into its rival's application stack, NetSuite can leverage the growing cloud-computing trend while accentuating the apparent differences between its own capabilities and those of Salesforce.com. Both companies provide suites of CRM and related business applications, but Salesforce.com comes from a sales force automation (SFA) background, while NetSuite's original pedigree (as evidenced by its original name, NetLedger) is in back-office functions.

"At the end of the day, Salesforce.com's vision of the cloud is resonating with customers," says Paul Turner, NetSuite product marketing manager. "But up until now, if you were a Salesforce.com customer, you didn't have many options for SaaS finance solutions."

Four founding partners in the SuiteCloud Development Network -- three of which were already players in Salesforce.com's AppExchange platform -- have created the connectors in SuiteCloud Connect for Salesforce.com. They are:

  • Boomi;
  • Cast Iron Systems;
  • Celigo; and
  • Pervasive Software.

"NetSuite says they've had this integration [potential] for some time, and are now just formalizing it and standardizing support," says Chris Fletcher, research director, AMR Research. "The partners will be the first point of contact and NetSuite will be the second."

While NetSuite and Salesforce.com are competitors first and foremost -- the former has launched more than one marketing campaign seeking to eat into the latter's customer base -- the two companies nevertheless have many customers in common. "NetSuite's sweet spot -- pardon the pun -- is financials; Salesforce.com's is front office, like SFA," Fletcher says. "If you draw the two circles I don't think you'll find that much overlap."

"Bringing together the two largest business application clouds is a smart move by NetSuite and Salesforce.com that should benefit customers and the SaaS industry at large," said Michael Fauscette, group vice president of software business solutions at analyst firm IDC, in a statement accompanying NetSuite's announcement. "SuiteCloud Connect for Salesforce.com gives customers the ability to integrate a leading SaaS CRM product and a leading on-demand financial application in a way that encourages the use of robust, third-party integration technologies. More of this kind of flexibility and openness is needed to unlock the huge potential of cloud computing."

Fletcher agrees. "They seem to be able to crank out integrations fairly quickly," he says. "I think we'll see a lot more announcements like this from SaaS vendors."

"For NetSuite, the connection to Salesforce.com just makes sense," wrote Larry Dignan, editor in chief of ZDNet, on his blog. "For starters, [Salesforce.com] is much larger in terms of annual revenue and has a larger installed base. If NetSuite can tap into an already SaaS-savvy audience it can add more customers."

Responding to Dignan's post, CRM industry luminary (and CRM magazine columnist) Paul Greenberg agreed that SuiteCloud Connect for Salesforce.com was a "very smart move by NetSuite."

Dignan noted, however, that with multiple connections between competing platforms, "the risk here is that SaaS gets so complicated that it starts to mimic the problems involved with on-premise software implementations."

For better or for worse, the fact remains that SaaS is increasing in popularity and capabilities, and business customers will go wherever they can get the functionality they need for the most reasonable cost. "The more SaaS apps customers consume the more ready they are to deploy the next one," NetSuite's Turner says.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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