Special Report: NetSuite enters 'platform wars'

Platform as a service is emerging as a new battleground, as NetSuite pitches in with an online development platform to rival Salesforce.com's offering. Are more vendors waiting in the wings to join the 'platform wars?'

By Stuart Lauchlan, news and analysis editor

We've already had the best of breed vs integrated suite debate; more recently the ongoing on-premise vs on-demand tussle; now stand by for the platform as a service wars with NetSuite pitching in with an online development platform akin to rival Salesforce.com's Force.com push.

The NetSuite Business Operating System (NS-BOS) is intended to attract independent software vendors (ISVs) with expertise in specific industries that are looking to create a software-as-a-service (SaaS) offering. NetSuite will share revenue from applications with ISVs, likely to be around 50% of the price for NetSuite's applications.

"Developers need more than just great technology; they also need a new approach to business mandated by the on-demand software approach."


Zach Nelson, CEO, NetSuite

NS-BOS consists of NetSuite's hosted infrastructure; its core set of business applications; the SuiteFlex development framework; and SuiteScript D-Bug, a hosted debugging environment and the only new product in the mix.

Inevitably, comparisons are drawn between this and Salesforce.com's Force.com and AppExchange strategies, although NetSuite says there is a crucial difference in that NS-BOS is more about customising applications. "We're not talking about an internet operating system where developers build random applications,” said CEO Zach Nelson. “It's really about building business applications that are embedded in NetSuite.

"Third-party vertical application developers are struggling to move their client/server applications to the SaaS model, and NS-BOS provides the technology they need to do that quickly. But developers need more than just great technology; they also need a new approach to business mandated by the on-demand software approach.”

Key components

NS-BOS includes:

• SaaS infrastructure: third-party applications will be hosted on NetSuite's multi-tenant, on-demand architecture.


• Core Business Management Suite: by including the NetSuite application within the NS-BOS environment, ISVs can focus on adding features designed for specific industries instead of building core application capabilities like accounting, inventory or order management.


• SuiteFlex: NetSuite's technology platform for customer, partner, and development customisation, verticalisation, and business process automation includes tools and the SuiteScript programming language for creating new applications.


• SuiteScript D-Bug: NetSuite claims this is the first Platform-as-a-Service code debugger, and is a key component of NS-BOS. It enables real-time code validation and testing against the entire NetSuite application, which can result in faster development.


• SuiteBundler: this enables the delivery of ISV-built vertical solutions to SaaS customers in a packaged, repeatable manner, rather than recreating the code for each customer.

To take charge of the new push, NetSuite has hired Michael Ni as vice president of industry solutions and ecosystem in which guise he will "direct NetSuite's industry vertical initiatives, software developer programs, and oversee the continuation of the development of NetSuite as a vertical application platform."

Competitive vendor landscape

Analysts saw the announcement as a reinforcement of NetSuite's position. “Think of NS-BOS as a re-emphasising of NetSuite's earlier messages to customers, and more particularly to its partners, along the lines of 'We've got a platform, now please will you use it,'” argues China Martens of The 451 Group. “Clearly, that call has yet to fully resonate with those communities, but the more complete offering that NS-BOS represents is the company's best chance so far to score more adoptions. In the current climate, platforms are a very hot topic of interest, so NetSuite putting its flag in the sand now is a good move.

“When it comes to platforms, NetSuite is perfectly correct, this year is already shaping up to be one where a whole bunch of vendors will constantly talk up their development environments. Certainly, rival Salesforce.com has continued to up its seriousness about Force.com, including a move in January to deliver more sophisticated development tools, and it clearly nurses ambitions to provide a complete development suite.”

Martens accepts the differentiation between the NetSuite and Salesforce.com approaches. “Salesforce.com doesn't include its CRM software as part of Force.com and encourages third parties to build both CRM extensions and all kinds of other apps, like ERP, on top of its platform,” she said. “By contrast, NetSuite includes its apps suite in NS-BOS and intends partners to take its whole stack and tailor it for a plethora of verticals. It hasn't the resources to cater to some industries like agriculture or government service contractors or sub- or micro-verticals, areas partners know very well. NetSuite provides the base functionality, and partners can layer vertical specificity on top of both the platform and the NetSuite apps.”

Martens expects there to be more of a competitive vendor landscape as the 'platform wars' hot up. “Going forward, we'd expect less of a two-horse race between NetSuite and Salesforce.com, and more of a confused platform competition where careful evaluation of what each party's platform actually consists of will be vital,” she reckons.

"With so many players already SaaS-y – or looking to become so – there's a whole variety of platforms that may well be touted as suitable for building business apps, in particular those of large consumer online players like Google and Facebook. As both Microsoft and SAP get further into the SaaS arena with Dynamics CRM Live and Business ByDesign, respectively, they may look to make more of the on-demand platforms they use. Certainly, Oracle is talking more about its platform capabilities than in the past, particularly around its Siebel On Demand CRM.”

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