Selling software services to small and medium sized businesses, where partners are the key to success, vendors are polishing up their partner-friendly credentials in the hope of attracting new friends, preferably by luring them away from competitors.
NetSuite Inc is the latest to make a play. Following on from the recent NetFlex Applications program announcement, which debuted with 30 partners offering horizontal and micro-vertical applications integrated with the core NetSuite application, the hosted business suite vendor is targeting Microsoft resellers.
CEO Zach Nelson said several resellers have added NetSuite’s on-demand service to their portfolio, drawn by the growth potential of the on-demand model.
As part of NetSuite’s inducement program it is offering existing qualified Microsoft resellers a 35% margin, a 50% discount on NetSuite for internal use and free sales training for up to five people. NetSuite is also targeting the Sage partner channel.
As well as offering financial incentives, which also include facilities for recurring revenue, NetSuite is playing up the revenue potential for partners that go beyond the staples of installation, data import and training and provide additional software in a solution bundle.
Nelson stressed the NetSuite cloning facility which should provide a cost effective means for resellers to develop a vertical solution once but sell it many times.
The extensive Microsoft and Sage channels are under attack by NetSuite, Salesforce.com and SAP AG because they have a hold on key geographies and segments of the SMB market for business applications. Just as NetSuite is targeting Microsoft and Sage partners, SAP is also trying to entice resellers away from these vendors.
However, getting resellers to extend their portfolios is difficult enough, and jumping ship is a step beyond. Nelson is aware of the challenges, acknowledging that inertia is an issue.
Retaining partners is also a challenge for the newcomers. According to David Pinches director of Accounts and ERP at Sage UK, SAP targeted 30 to 40 of its partners but the majority either pulled out after the SAP business failed to take off or sold the SAP side of the business off while retaining Sage.
Graham Kingsmill, MD of SAP UK said he was not aware of a retention problem and pointed out that the SAP UK SMB business unit, which has been built up over the past 18 months, is the biggest unit within the UK business.
However, there is some evidence of partners leaching away. Pinnacle Computing was awarded SAP Business One Partner of the Year for 2003 but no longer offers Business One. FD Systems was also a Business One partner but has sold off the business unit. To be fair this is not a representative picture and Business One only represents the low end of SAP mid market effort.
