NetSuite, Salesforce.com Jockey For Position

NetSuite's power punch includes a new capability that lets channel partners adapt the software for specific industries and then "clone" those versions for distribution and resale to other customers.

Salesforce.com countered by hiring a new executive charged with building a partner network to sell its popular CRM service.

Bruce Culbert, Salesforce.com's new senior vice president and general manager of global services, said he's already met with systems integrators and potential midmarket partners in his first three days at the San Francisco-based company. His objective: To find a mix of partners that target Salesforce.com's three market segments,small businesses, midsize companies with $1 billion or less in annual revenue, and enterprises with more than $1 billion in annual sales.

"I don't have a sense yet of how large a network we need. I'll have a strategy we can discuss in the next 30 to 60 days," said Culbert, who joins the company from BearingPoint.

Despite Salesforce.com's brand recognition, Culbert may have trouble recruiting midmarket partners, solution providers say. "It's not a simple decision for a VAR to just take on a new product. There's a lot of ramp-up involved," said Fred Reede, principal of CRM Solutions, North Canton, Ohio. "[Salesforce.com] won't attract VARs with an also-ran program. They have to bring a compelling reason for me to invest my time and money."

NetSuite apparently provided that reason to Reede, who recently signed on as a partner of the San Mateo, Calif.-based company. With the move, CRM Solutions can leverage the new customization and "account cloning" capabilities in version 9.1 of NetSuite's hosted software. The new version of the suite enables NetSuite solution providers to add custom database tables and custom JavaScript code and logic across the product's CRM, ERP and e-commerce capabilities.

The account cloning feature allows partners to replicate customized software for resale and distribution to others in the same target market. "Even with that replicated solution, a customer can still [tailor] the software to its unique needs," said Sean Rollings, senior director of product marketing at NetSuite. "And no matter how customized, every replicated copy will be compatible with any upgrades that we release."

Partners pay NetSuite $300 per replication for each account they replicate. NetSuite then will test the software to ensure that it works as expected.

Salesforce.com also touts customization in its latest release, Winter '04, which includes its namesake CRM software and on-demand application server, sforce 2.0. Though the CRM software has a dozen new features, including the ability to manage and monitor contracts, the sforce server provides the customization.

"Developers can use any development environment they are familiar with, store the custom application in Salesforce.com and, using the sforce platform, deploy it to any worldwide user base," said Kaiser Mulla-Feroze, director of product marketing at Salesforce.com.