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NetSuite started off almost as a science experiment – an enterprise resource planning application delivered over the Internet. It was an anathema to the conventional, mainstream on-premise app offered by IBM, SAP and even its cousin Oracle. But not anymore.

NetSuite Channel Chief Craig West says SuiteStart is designed to make cloud ERP more attractive to solution providers.

NetSuite is cutting into the market share of rivals such as Microsoft and Sage with a lower-cost SaaS ERP offering that continues to attract throngs of enterprise and midmarket users. Its recent channel moves to sweeten incentives and compensation for partners are clearly intended to increase its market strength and reach.

Earlier this week, the SaaS company unveiled “NetSuite SuiteStart Service,” a channel incentive program that gives solution providers 100 percent of the first year’s margins, as well as free training and warm leads to prime sales engines.

In the announcement of the program, vice president of channel sales Craig West said, “Built on the success of NetSuite SP100, we decided to enhance the program by bringing more offerings to channel businesses. We listened to our partners and found new ways to make the offer more attractive through the addition of our SuiteStart Service.”

NetSuite SP100, of course, is the channel program it launched last fall. The additional SuiteStart program, which waves startup fees, provides free ERP service to partners and a raft of marketing support materials designed to get solution providers up and running quickly, making them more productive.

Even in the cloud, ERP is heady stuff. Understanding the mechanics, deployments and functionality requires the investment of time and resources on the part of the partner. For more complex technologies, the channel onboarding lifecycle – from first contact to productivity/first sale – can take as long as 14 months. The NetSuite initiative seemingly gives partners a boost in getting on top of the application portfolio and into the field to recoup their investments. The incentives are nothing less than attractive.

“We have had our eye on the cloud-computing space for some time, and with the newly added enhancements made by the NetSuite SuiteStart Service, I knew the time was now for us to make the move,” said Bryan Majewski, managing partner at Baker Tilly, in the announcement made by NetSuite. “Between the flexible revenue sharing and the comprehensive program support, we are confident we will be successful partnering with NetSuite.”

It seems as though the SuiteStart is also aimed at making ERP more accessible to a new kind of partner, namely non-technology companies. Many cloud-based ERP vendors, including NetSuit and Intaact, report surging interest in their applications among accountants and professional services consultants. ERP and accounting are a natural fit, since they’re about automation and optimization of resources that lead to business execution.

But there’s something else at play here, namely the need for solution providers in the cloud ERP sales equation. NetSuite was born out of Oracle, a pet project of master maestro Larry Ellison. It’s primarily approached the market through a direct sales model and has enjoyed increasing success since the beginning of the cloud evolution. For the longest time, it was robbing rivals Microsoft (Dynamics), Sage and SAP of business; of late, it’s been beating its own cousin, Oracle (Siebel) for enterprise contracts.

Obviously NetSuite wants to maintain momentum. And, its rivals aren’t lying down; Microsoft is rumored to be planning a major push in cloud ERP later this year. So the means for keeping ahead of the sales curve, continuing to win new customers and expand market reach is through the channel. And this explains the motivation behind this generous incentive program.

As solution providers fret over how they will adjust to the new realities of cloud computing and whether they can compete against savvy vendors, NetSuite is showing the channel’s ability to reach niche markets and maintain relationships with customers, which remains paramount regardless of the technology delivery model.

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Lawrence M. Walsh is CEO and president of The 2112 Group, a technology business advisory service that specializes in optimizing indirect channels and partner relationships. He’s also the executive director of the Channel Vanguard Council. He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at lmwalsh@the2112group.com.

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