NetSuite's CEO chides 'slow' Microsoft

Microsoft's move toward the on-demand CRM software sector doesn't worry the CEO of NetSuite, who adds that other companies remain friendly rivals until the old guard--namely Siebel--has been overthrown.

Zach Nelson says he accepts that Salesforce.com and RightNow--immediate competitors also touting on-demand models for customer relationship management (CRM) software--have made the right bet and believes the market will be large enough to support all three.

Speaking to Silicon.com, Nelson said: "NetSuite, RightNow, Salesforce.com--that's where all the new contract growth is. Siebel's growth is just maintenance."

However, despite such acclaimed growth, Nelson said there won't be an influx of vendors into the market because any other player is already too far behind the curve.

"It's no coincidence that NetSuite, RightNow and Salesforce.com were all founded in 1998. We all had to walk through the valley of death and we've come out the other side. You aren't now going to see 20 vendors enter this market."

And while money talks in technology, even the richest company can't bend time.

"Microsoft has the money but it doesn't have the time. This isn't something that you can just throw developers at."

And in a "build, partner or buy" environment, Nelson said he believes Microsoft only has one option.

"Even with all their money they're going to find they still have to build," said Nelson. "They aren't going to be able to buy any of us."

"I certainly don't think we'd get sold to Microsoft. I could ask our owner but I don't think he'd go for it," said Nelson of major shareholder and renowned Microsoft agitator Larry Ellison, who still holds more than 50 percent of NetSuite's stock.

Nelson added that his closest rivals also would be unlikely to accept Microsoft's dollar, especially given the fact that there is a strong ex-Oracle presence within Salesforce.com.

"And how long is it going to take Microsoft to build anything? What are we talking--2012? Where are we going to be in 2012?" said Nelson. "Hopefully I'll be retired."

The only major CRM vendor thought to be looking for a buyer is Siebel, but Nelson believes few firms would consider gambling on a company he sees as "a dead man walking."

"Siebel has done a lot of things right. They were very vertically focused and knew the markets they were selling to," said Nelson, perhaps deliberately slipping into the past-tense. "The problem wasn't with their knowledge, the problem was with their product. They built a giant hairball of a product."

He also had few kind words for SAP.

"I've heard a lot of mumblings about a product coming out of SAP but I've no idea what it is. I think it could just be a case of them putting lipstick on the pig."

Will Sturgeon of Silicon.com reported from London.

[miyamoto02]

This is typical Netsuite/Oracle arrogance. Netsuite has the most expensive incomplete "complete" system available. Want to have your own design of a website? That's $3,500. Want to have subdomains? That's another $3,500. Want customer service who answers the phone and not reply to emails 24 hours later? That $2,000. Want to tie your system into eBay? Oh, that's another $2,000. And did you know you have to pay these fees on a yearly basis? Netsuite makes a big deal how they are a all-in-one system so you can easily transfer information between the CRM and the accounting modules. This is true. But is it really worth having all of your systems talk to each other for more than $20,000. And you have to pay this amount, plus more the next year. And the next. And the next. In addition, although the data resides on their system and they claim you own it, if you decide to just end your contract, they wont release your data without paying for 1 more year of services. They'll claim that if you decide to stop working with them you can access the data for a year after your contract expires, but that's only if you let them rebill your account for the same services that were incurred the prior year.