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An Independent NetSuite Software Product Review

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Deployment Considerations
NetSuite is only available in the software as a service (SaaS) model. There is no option for on-premises.

NetSuite operates within two geographically disbursed colocation data centers—a primary data center in California and a backup data center in Massachusetts. The backup data center is a data mirroring recipient and is designed for failover and disaster recovery should the primary data center become non-operational.

NetSuite's service level agreement guarantees 95.5% uptime, excluding scheduled service windows. The company has historically averaged 99.97% actual uptime. To NetSuite's credit we applaud their public display of system status, although would recommend they display more than just the last seven days of performance visibility. NetSuite's data center operations have received SAS70 Type II audit attestation as well as PCI and EU Safe Harbor certifications.

The company also offers two-factor authentication. With this additional layer of user authentication, companies can require users to physically possess a token, and require knowledge of a password in order to access company information.

As NetSuite has steadily moved up market, it has increased pricing which has left many of its down market customers behind. NetSuite's average selling price in 2001 was $447, while today it is over $40,000. It appears the costs to manage small business customers don't always exceed the revenues—which begs the question, how can SaaS competitors grow and profit from small business customers and NetSuite cannot? We suspect that answer comes down to software architecture and hosting operations. To date, NetSuite's hosting reliability has been on par with competitors but new version upgrades are much slower than competitor products.

Software Pricing
Hosted software pricing varies by product line and normally falls in the range of $99.00 to $129.00 per user per month based on annual contract. Various software component combinations can exceed this range. Additional fees apply to various add-on products and add-on services. Help desk support plans are priced separately and may range from 22.5% to 37.5% of the software subscription.

To support its growth toward the enterprise, in 2011 NetSuite unveiled the Unlimited bundle. This ERP software packaging begins at 500 users and includes all (currently 26) software modules, provides increased pricing flexibility for subsidiaries and add-on modules, and comes with Platinum support. The starting cost for NetSuite Unlimited is $1 million per year, making it a viable option only for larger enterprises. Also, NetSuite Unlimited is not necessarily a flat fee for all, as additional charges may still apply—such as additional subscription fees for user counts beyond the 500 entry point.

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As NetSuite has moved up market, it has increased pricing which has left many of its down market customers behind. NetSuite's average selling price in 2001 was $447, while today it is over $40,000. It appears the costs to manage small business customers don't always exceed the revenues—which begs the question, how can SaaS competitors grow and profit from small business customers and NetSuite cannot?

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