Why we left NetSuite, Part 2:
In the previous post I tried to just stick with just the facts as to why we left NetSuite. I read it a number of times and others here familiar with the story agreed that it was clear and factual. However I heard from our (ex) NetSuite reseller Ray Tetlow of Skyytek and he had a different version of the events that transpired. I told him numerous times that he was free to post any comments on the D-Tools blog or create his own blog. He declined because he was going to “take the moral high ground”. I am not sure what that means in this case.
So I decided to revisit the issue to make sure I covered everything as accurately as possible and did not try and spin this any one way or the other.
We did not leave NetSuite because the software sucked. The software sucked hard back in the version 7,8 and 9 days but the current version we were on was OK. I am not aware of any other single vendor software company that can recreate the NetSuite lead to cash process. Maybe the individual parts are not as good as the competition but having everything integrated into one system has a lot of value. Based on my extensive research to try and recreate NetSuite functionality in a product like Salesforce.com was going to take four separate vendors. You can read about it here.
We did not leave NetSuite because of the price. Yea, it is expensive, the price always goes up, the product levels, packages and options constantly change, extra emails cost 4 cents each and they brutally shifted their focus from an online QuickBooks competitor to the small end of SMB to SAP competitor during our time with them. So yea, if you are going to compete with SAP your price structure is going to look similar but remember we bought into this when it was Oracle SMALL BUSINESS not SAP lite.
Also we are not stupid here. Switching costs are huge with any platform change, especially so with a platform like NS that does not give you easy access to all of your data. See related post on who owns your data. We knew it was going to be very expensive to switch. Just the hard costs of the new software platform and data conversion costs were close to $80K. I figure the total hard and soft costs of the switch were around $200K.
The reason we left NetSuite was their business practices. I do not think I can explain it any clearer than here. We had a dispute over what contingent means and as a negotiating tactic they threaten to cancel our paid in full account that was not set to expire for five months. That is like negotiating with the mafia while they have your head in vise. Who wants to do business with a company like that? I was actively securing financing for this deal with our bank when we got the first collection letter nine days after the estimate.
The only thing I can add to that story is that Ray Tetlow, the founder of Skyytek claims he had nothing to do with the NetSuite business and collection practices and it was out of his hands. I do not know what the truth is in this matter. What I do know is that in a face to face conversation with another NetSuite reseller in the fall and I was told that the reseller controls the deal.
So now I am curious, I assumed that Ray Tetlow was telling the truth but why would another reseller make any kind of contrary statement? I am hoping that someone with more clout than me can get to the bottom of this. If Ray Tetlow had nothing to do with the mafia like negotiating and collection tactics then that makes NetSuite the worst customer service company in the world. Is there anyone from NetSuite that would like to make a public comment on their collection processes and reseller agreements? Maybe someone from the press could ask these hard questions.
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Incredible.
I just found this blog | read the entire Netsuite saga.
Turns out, I could have written it. TO THE LETTER, this was my precise experience, right down to their negotiating tactics. I doubt that their reseller is to blame – the Oracle group is who made our life difficult.
….And they still “own” my data.. grrrr..
we used to sell netsuite a long time ago. But abandoned our cause for several reasons. specifically skyytek has a fantastic reputation. One thing though is that the resellers of netsuite cannot collect or enforce collection procedures. They a. dont have the contracts to do this and b. they do not have control of provisioning to even switch you off. Is the license agreement between you and skyytek or you and Netsuite?. If it is the latter -then the blame rests with Netsuite of course. However, I suspect there could be more things to this. For Netsuite to try to enforce collection procedures must have meant that they had reasonable cause. Did you authorize or sign for your renewal or something and on that document was there any provisions – to allow you to get out of the deal ? This sounds a bit like buyers remorse to me (post sale) and you seem to be pointing fingers at every software vendor on the planet.
But if you did not sign anything and they were trying to shut you off early for no reason. The of course there is a issue. But I highly doubt that.
peterp: How can I know what goes on between skyytek and NS? What I do know is that we agreed to a renewal while we had five months left on our previous contract based on finding acceptable financing and as we were securing financing we received a collection letter 9 days later stating that if the account was not paid in full they would shut us off.
So you are saying that the reseller has no control over the account once a contingent estimate is agreed to? Based on my experiences with skyytek they had total control over the account. It was a big deal to get it moved from a direct NS account to a skyytek account a few years back. Ray Tetlow of skyytek is pretty aggressive about account control and ownership. I remember he even had D-Tools/Skyytek shirts printed up for the NS conference to announce our “partnership”. I think I still have one, although it is a bit oil stained. It seems to me that NS and skyytek can use whatever tactic they feel is appropriate to extract money out of their customer base.
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[...] parts ways with largest reseller” in Phil Wainewright’s SaaS blog on ZDNet. Our sad story was mentioned in the post as a possible reason for the split. Hard to say, I don’t think [...]
I find reading the comments quite amusing, being a Netsuite Partner since the inception of the program I think knowing the facts vs. guessing always lends intelligent individuals to the right conclusions. It is true that Netsuite has change significantly in its tenure as a software company. It is also that over time they have changed their messaging from what appears to be the Small SMB space to the Higher End SMB space. It is also true that Netsuite could leverage their partner community in a more positive fashion. It is true that it does take a significant investment to build an “Order to Cash” system and may be the reason SalesForce would take 4 vendors to accomplish the same objective(according to the comments posted her). It is truly a shame that Adam had a bad experience in how his customer relations where handled. As a Tenured NS partner we have had clients who have contracted through us directly with NS and we have provided the professional services to deliver a product that is the “best experience” for the client. If there are issues the client can and has worked directly through us with the assistance of the NS employees to resolve the issues or gone to NS directly to resolve their issues. It is a known fact to us some NS partners had special arrangements to bill, control, support, and lease and implement the program through themselves or their sub networks. This results in limited access for the client to the manufacturer and their development group for resolution. Not to say for small start-up software companies this is not a cost effective way to build a Network but as a program gains maturity historically this approach has caused a great amount of confusion, conflict and does hinder effective communication flow. No business in their right mind wants to see install base erosion, as the base fuels R&D cost for future releases. No one is nieve enough to believe it doesn’t happen, this is a world where everyone is entitled to their own opinion and can throw the Baby out with the bathwater, if they choose. As Adam stated it is not an inexpensive thing to do. As I was not privy to why NS and Skyytek parted ways, the reasons always seem to surface over time. The interesting question is will this entice NetSuite Executive Management to more closely embrace the partner community in the future and create a closer synergy in their overall organization, which will enhance customers experience. Thus ensuring a team approach to the client needs. Also, what does the parting of the ways between Skyytek and NetSuite really mean? Is this Netsuite’s first step in improving their partner program or disbanding it completely? Time will tell. A sunday armchair quarterback cannot understand the pressure of the game or the outcome of the score. We do know that no software company can ever make it to the Super Bowl (Tier one) status without an effective partner channel. The real question is what will be their standing when the season is over?
I just stated the facts as evidenced by the various emails from other parties in the posts about this topic. I have never heard anything on this issue from NetSuite, and according to Ray Tetlow, CEO of Skyytek it was “out of his hands”, meaning it was NetSuite policy to threaten our paid in full account as a collection tactic and there was nothing he could do.
I am pretty easy to get a hold of if someone from NS wants to explain what happened and I would be happy to post their side of the story.
To be fair to NS I did receive a voice message during my vacation from M.P. in product marketing when this post was published. I returned the call when I got back in town but have not heard anything back as of this date.
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As one of the many competitors to NS who provide a complete small business management software solution I have been watching Netsuite slowly morph into a company with a reputation for:
A) being too expensive (by a factor of 3) for their target market place and therefore are definitely moving up the curve towards only serving the “mid market”. No doubt this is a reaction to the entry into the small business market of many new players.
b)incredibly inept and ungracious customer services and sales. In fact one of my latest customers with years of experience in this industry that the aggressive tactics used by the NS sales people reminded him of a very unpleasant Oracle sales force in their early days.
c)contemptuous “renewals” people
The fact is there is going to be some pain all round as NS defines where it wants to be and how its going to get there. I would obviously be interested in listening to views of people who are either experiencing an improvement or worsening of the NS customer experience.
You can get in touch with me here http://www.salesorder.com
Cheers
Nick
Sorry you had a bad experience Adam.
As a NetSuite reseller for five years I understand some of your pain. I agree with the other comments that you brought some of the pain onto yourself.
We routinely import and export data from NetSuite via web services. I listened to the VM from your expert and my opinion is similar to some of the other posters. He was covering his lack of results.
Skyytek was, as NetSuite employees have verified, the only reseller that NetSuite allowed to bill the customer directly. I believe that Skyytek generated all renewal transactions. Ray clearly was in control of your renewal process. Also, ICE business solutions became Skyytek Leasing. He controlled the leasing company too.
I would not attempt to defend NetSuite’s business practices or customer service, but in this case I think you were more of a victim of your reseller than NetSuite. Although they clearly were complicit.
When you evaluate all of your options, NetSuite is the strongest SAAS solution currently available. When a better solution does show up in the market, we will be the first in line to sell it and dump NetSuite ourselves for hopefully a more channel and customer friendly company.
Bill. I dont know you, but our company has a web based system similiar to NetSuite. pbs-us.com. There is no information regarding the site yet, just a login where our customers go and work. Our customers love the software and dont think there is anything else like it. I am curious to see how it compares with netsuite. It is very robust and we have some descent size companies using it. Give me a call: 864.356.3866 and lets talk about a few things.
Dominick Porter
Salesorder.com offers a completely free version of its ERP SaaS.
Here is a <a href=”http://www.youtube.com/watch?v=-U_54SHBk4I”title=”two minute overview”
overview….
Well Netsuite is a great product but the core company values are whack. Who in their right mine would raise prices in the middle of the worst economic downturn of our generation. They had us by the short hairs and we had to do it but I will spend the next year finding a new solution. Their business approach lacks integrity and common sense.