SAP BRINGS STONE-AGE SOFTWARE ECONOMICS TO CLOUD COMPUTING
Entry-Level SAP Business ByDesign Five-Year Total Cost of Ownership More than $500,000 for Only 10 Users
SAP Business ByDesign: More than Twice the Cost and Half the Functionality of NetSuite
SAN MATEO, Calif. — December 1, 2010 —NetSuite Inc. (NYSE: N), the industry's leading provider of cloud-based financials / ERP software suites, today announced the results of a total cost-of-ownership (TCO) comparison of NetSuite's ERP cloud software suite with SAP's Business ByDesign (BBD) offering. By calculating the related costs of each ERP solution over a 5-year period, NetSuite was anywhere from 40-70 percent less expensive than Business ByDesign. In one real-world example, the customer indicated Business ByDesign was twice the cost of NetSuite and provided just half the functionality required. For more information, please visit http://bit.ly/BusinessByDesign.
SAP's TCO calculations were done using SAP's own, premier online TCO calculator (http://bit.ly/SAPTCO) devised to demonstrate BBD's value of a 5-year period when compared to on-premise software.
The SAP solution, according to SAP's own calculations, results in a minimum 5-year TCO of $510,284 for just 10 users over 5 years in a distribution company. In similar-sized manufacturing companies SAP said their TCO would be $496,233. A 10-user high-tech company would enjoy a 5-year TCO of a whopping $539,243.
By contrast, NetSuite comparable deployments are a fraction of the cost of Business ByDesign — and according to several customers that chose NetSuite over SAP Business ByDesign, NetSuite delivered far more functionality.
NetSuite's TCO model, which is based on NetSuite's standard subscription pricing and a typical implementation cost for a 10-user deployment, and also includes additional costs for scope enhancements, NetSuite costs just $187,192 over 5 years over 60 percent cheaper than SAP. Additionally, unlike SAP's TCO estimate that adds costs for upgrades, NetSuite customers do not have to spend valuable resources on minor and major upgrades — these are a standard part of NetSuite, fully automatic, and require no resources to be spent on them.
"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," said Mini Peiris, NetSuite's VP of Product Marketing.
While SAP's calculations were done using a hypothetical implementation, with NetSuite's more than 6,600 customers, NetSuite is easily able to benchmark real-world customer implementations of NetSuite and NetSuite OneWorld against SAP Business ByDesign's published TCO. The results demonstrate the gulf between SAP's old world legacy of high TCO with SAP Business ByDesign, and NetSuite's heritage of proven cost effective cloud ERP deployment:
COMMCO LLC — Millwork manufacturer COMMCO LLC of Kansas City chose to transition from SAP R/3 to NetSuite, after closely evaluating SAP Business ByDesign. COMMCO distributes various products to the home improvement market, including high-profile nationwide retailers such as Lowe's. According to Franklin Christopher, President and CEO of COMMCO, Business ByDesign offered only 30 percent the functionality of NetSuite. "Knowing that NetSuite's entire focus is on SaaS and the depth of functionality they offered compared to SAP Business ByDesign made the choice easy," he said. COMMCO's 5-year cost, including subscription, together with implementation and a migration from SAP R/3, is over 40 percent cheaper than a comparable SAP Business ByDesign deployment.
Schaeffer Manufacturing Company — COMMCO is not the only NetSuite customer realizing tremendous advantages. Lubricant maker, Schaeffer Manufacturing Company (www.schaefferoil.com) of St. Louis is another good example. The company evaluated SAP Business One, and chose to deploy over 40 users on NetSuite, providing a startling contrast to SAP Business ByDesign's TCO with a similar number of users. Its 5-year TCO with NetSuite is more than 60 percent less than SAP's published Business ByDesign TCO. Schaeffer's successes with NetSuite have dramatically improved its error rates, reduced shipping times, and expanded the use of electronic order processing and payments.
NetSuite also benchmarked a number of other manufacturing and wholesale distribution customers who deployed NetSuite with an accelerated deployment to as few as 12 users. With these small deployments, NetSuite demonstrated a 5-year cost saving of over 70 percent versus SAP Business ByDesign.
For more information about NetSuite Inc., please visit www.netsuite.com.
NOTE: NetSuite and the NetSuite logo are registered service marks of NetSuite Inc.