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Why is NetSuite so well promoted yet with a lot of shortcomings?

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JASON LEMKIN

Well, of course any well established product like NetSuite and many others will feel a bit old and have their shortcomings. NetSuite is almost a 20 year old product, as is Salesforce, Concur, Successfactors, etc. etc. Ariba is older.

And this certainly creates lots of room at the bottom, and room for adjacent players, etc. Even if NetSuite were perfect, the simple fact that is runs on such an old code base that has to support so many workflows and features (which are so many in number they are basically impossible to refactor) always opens up opportunities for new entrants.

But established brands in SaaS are very, very powerful.

Listen to one of the top next generation SaaS CEOs, Jeff Lawson of Twilio talk about why he picked NetSuite at the 2017 SaaStr Annual. Because it had the biggest brand. He knew he could trust it for something mission critical:

Brands alone aren’t enough, of course. But enduring brands do tell you that the needs of 1000s of customers have been met. The more mission critical an application, the more reassuring that is.

Not all of us want to take a bet on a new, edgy vendor. Even if it’s slicker. Even if it does some really cool things — because what about the 100s of feature gaps vs. the established vendor? Likely, no “traditional” CRM will ever do as much as Salesforce. Just like no wordprocessor will ever do as much as Word. Just like Photoshop is almost impossible to touch on a feature perspective. Etc. etc.

So your criticisms of any well established enterprise software product are probably spot on. And create cracks in the market for new entrants, for sure. But it will take a long time to dethrone leaders of true solutions. Especially, if they are willing to continue to invest to try to at least keep up.

Brands matter.

Brands with all the core features built out, and with reasonably (if not totally) happy customers? That’s what 95% of the market wants.

The 5% creates the room for start-ups. And over 20 years, the next SaaS decacorn.

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Published on June 12, 2017
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