August 19, 2004

NetSuite's Zach Nelson: "We get most of our customers from [Intuit] QuickBooks"

VS

NetSuite President Zach Nelson knows that Intuit is a formidable competitor, but knows where Intuit's Achilles heel is also.

Ironically the "medium" in the Small-Medium Size Business market.

Many companies use Quick Books when they start their business but what does the company do when they grow?

Zach explained that Quick Books highest end product, Quick Books Enterprise, only supports 10 users - what about user number 11 Zach asks.

Internally, Intuit refers to QuickBooks Enterprise as Hercules. If QuickBooks Enterprise is Intuit's Hercules, at only 10 users (Net Suite has no limit), 29,000 records (Net Suite has none), non integrated web site capability and no way to track sales people - then Hercules might look a bit weak for growing businesses.

Zach explained (Icode has echoed this also) that most Netsuite customers came from Intuit Quick Books customers.

In that respect NetSuite has features in it, such as check payment that are similar to QuickBooks.

Netsuite Small Business Suite offers an easy and seamless upgrade path to NetSuite as a business grows even more. Some differences in the SMB suite and full version are functionality for example. A smaller business probably would not have territory sales managers - this feature is not in NetSuite SMB but in NetSuite.

Microsoft Business Solutions group has products that compete head to head with NetSuite such as Microsoft CRM and Great Plains. Although Microsoft has lots of money and huge brand recognition, Zach feels that its product line is a confused strategy. Furthermore, the products don't work together. Microsoft is working to have integration in its Business Solutions products in the future - but when? Customers don't want to wait for promised solutions, said Zach.

Intuit, like Microsoft, has the money to buy a company which will give it a more powerful offering. But although Intuit has talked about taking QuickBooks and QuickBooks Enterprise to the next level, its flat file database structure as opposed to a relational database is a weakness.

Intuit founder Scott Cook told me last year (or so) that Intuit's market is NOT the very larger businesses, but smaller businesses. I'm sure that when Intuit is ready to server, larger, small businesses, they will have a solution to meet that need.

Until then, NetSuite, SAP, Microsoft, Icode and Best Software and serve the larger, small business customers, that Intuit is not currently serving.

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