Anybody got a few hundred million sitting around and wants to build another SaaS ERP/SCM solution? :)
From their email newsletter 3 days ago:
Microsoft Dynamics 365 available later this year
Available this fall, Microsoft Dynamics 365 evolves our current CRM and ERP cloud solutions into one cloud service with new purpose-built apps to help manage specific business functions, including: Financials, Field Service, Sales, Operations, Marketing, Project Service Automation, and Customer Service. Dynamics 365 apps are designed so they can be easily and independently deployed. That means you can start small and pay only for what you need. Yet they work together seamlessly so, as your business demands, you can grow into additional capabilities with ease. For more information, visit the Official Microsoft Blog.
They had something in the works and this was about a year ago so I don't know if anything's changed since then. But I do remember the company that helped us manage our MS licensed software suggesting that their true cloud offering wouldn't be ready for quite a while.
In the end we went with NetSuite. Just like most software it's good at some things, not so much at others. But all in all I don't miss Great Plains that much, NetSuite does the job.
Wikipedia confirms - 2001 acquisition for 1B. Probably a profitable one!
But what a business needs is an application and not a platform. So if you have a specific business problem and a use-case in mind and can prototype a solution, you can find a company to at least hear out your pitch.
Good luck with your idea!
[0]: http://www.plex.com/
I do not think it will acquire SaaS SMB in ERP/SCM.
How about, stop obsessing over fucking SaaS and make software people can use without worrying when your bullshit company will "pivot" from CRM to cute cat gifs like the majority of SaaS startups.
NetSuite sells to SMB space. Those companies lack IT expertise and prefer cloud-based solutions. Hence they were successful.
If your anger is toward poorly designed software, then yes, it doesn't matter if it's SaaS or on-premise.
Another comment identified "SMB" as "companies in the $10m - $250m revenue range". Other definitions are based on staff count, with "<200", "<250", "<500" accepted 'standards' for Australia, European Union and USA respectively.
So, your basic premise is that a company with up to 200 staff, does not, and cannot have any staff capable of installing/maintaining a CRM tool, despite the fact that many companies have sold on-premise CRM software for many years, including NetSuite.
> Hence they were successful
I would argue that a number of major SaaS products are only successful because they already had an entrenched user-base who basically had limited options besides moving to the SaaS solution.
My point was that there are already several SaaS CRM tools for those who don't want to control their own data.
SaaS is not about making software better, its about getting continual income from the users of the software, and increasing vendor lock-in.
Unfortunately, lock-in will occur regardless of whether it's an on-prem software or SaaS. Companies don't go around changing their platforms every year or even every 3 years. So, one way or the other, the vendor will derive revenues from Annual Maintenance or Subscription. How's NetSuite unique in that regard?
With your standard ERP software, after you buy the software, it's yours. They can't take it away from you, they can only charge you for support. You might even have unlimited users/business units. Add 100 employees and it doesn't cost you a dime.
With a SaaS solution like NetSuite, they can charge you per user. You might pay $x/year per user, but if you add 100 users you're paying x*100 more per year.
You're also going to be paying the SaaS provider for every month/year you continue using the system. You might own your server and software but with a hosted system you're paying over, and over again. Which can be good if you're doing opex vs capex.
Companies generally switch ERP platforms every 10-12 years. Not only do new products come on the scene, but systems decay over time.
That's not always the case. Especially in the space that NetSuite operates in. Microsoft charges per CAL. SAP, Oracle and IBM have their corresponding pricing structure.
Any company that uses an ERP system is pretty much forced to upgrade regularly to keep in compliance. And every ERP system I've ever used or evaluated charged by the user.
When we used Great Plains, sure it was ours. But the price was based on the license count. Then after 1-3 years support would end and we'd have to upgrade. Oh, we could have decided not to upgrade. But then our owner's auditors would come along and give us bad grades for using an unsupported system. We'd be out of compliance with our lenders. And we just sell stuff, we don't have to worry about HIPAA or ISO standards or any other compliance issues that some companies deal with.
So we subscribed to the support plan, paid yearly and were entitled to all upgrades as they came out + some limited support from MS (which we never used).
Now we are on NetSuite and we pay annually, just like we did before. Except now upgrades are handled for us and I don't have to purchase a new server every 3-5 years.
You probably don't have an unlimited-seat license, because that's not how most are sold, and the market that buys ERPs (and enterprise software in general) is primarily motivated to pay for software for support, so "they can only charge you for support" isn't a meaningful limitation.
It's not that they can't, it's that they don't want to. As vendors of a (FOSS) ERP/CRM platform, we offer both a SaaS and a self-hosted installation, and most of our SMB clients prefer the former.
The thing about the continual income is that the salary of a sysadmin (which most companies don't have) costs way more than many SaaS plans, so it doesn't make sense until you're very big.
As for the lock-in, many business SaaS platforms allow you to export your data. And in our case, you also get a FOSS-licensed copy of the software :)
SaaS solves to that initial "we need process but can't afford the minimum buy in" gap. Admittedly at the cost of lining someone else's profit margin. But when your choices are between "nothing feasible" and "pay some overhead", it starts to look pretty attractive.