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Article

Ellison-Aligned NetSuite Attacks SAP

NetSuite is supposed to be 40%–70% cheaper and naturally it claims way more bells and whistles

NetSuite - which, as it happens, is majority-owned by Larry Ellison who has just returned from a courtroom battle with SAP utterly victorious - is waving around an amusing little TCO comparison of its ERP cloud software suite against SAP's revivified Business ByDesign (BBD) widgetry that suggests that ByDesign five-year costs run over $500,000 for only 10 users.

NetSuite is supposed to be 40%-70% cheaper and naturally it claims way more bells and whistles - half again as much functionality.

NetSuite used SAP's own online TCO calculator for the SAP calculations (http://bit.ly/SAPTCO), which is supposed to demonstrate BBD's value compared to on-premise software.

NetSuite claims that "By providing an under-powered product with an extremely high total cost of ownership, SAP has fallen into the trap of every stone-age software provider that has tried to make the transition to the cloud and not cannibalize its installed base. But NetSuite will gladly cannibalize SAP's installed base with a rich cloud product that actually reduces total cost of ownership while increasing productivity."

In case you don't get the point NetSuite writes on a blog that "By trying to make the same kind of money they made in the good old on-premise days with their new ‘cloud' solutions, they're carrying their on-premise ERP bloated TCO habits over to the world of the cloud. They want to inflict the heinous on-premise costs of the last two decades on you, as you try and move your business forward into the next decade."

It's a very Ellison-style attack and one should probably think of NetSuite as Larry's just-in-case side bet on the cloud. After all, IDC is forecasting cloud computing will grow six times faster than all software over the next few years.

See http://www.netsuiteblogs.com/blog/2010/11/sap-brings-stone-age-software-economics-to-cloud-computing.html.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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