NetSuite is taking a cue from rival Salesforce.com's playbook with a new developer network and online application marketplace - but NetSuite claims its take on the formula is much improved.
The SuiteCloud Developer Network (SDN) represents a major escalation of NetSuite's existing efforts to court ISVs, which were "not up to snuff," said Guido Haarmans, vice president of SDN. "We were really not quite managing the end-to-end relationships with the partners."
NetSuite is planning to directly recruit companies that will build applications with clear-cut value for its customers, he said. The goal is to align SDN with NetSuite's "core strategy of entering new verticals and going upmarket," he said.
Partners who build "native" NetSuite applications using its NS-BOS toolkit, as well those who use other platforms and then integrate with NetSuite, will be able to take part in the network, he said.
SDN will have multiple tiers of engagement with partners. At the top end, NetSuite plans to not just provide technical support and training, but also conduct joint planning sessions in the early stage of development as well as go-to-market strategies, Haarmans said.
Unlike Salesforce.com, which has the Force.com development platform and AppExchange marketplace, NetSuite is "not interested in signing up as many developers as we can," Haarmans said. "The program we're building is not really about quantity, it's about quality."
AppExchange had 757 applications as of Thursday. In contrast, NetSuite will be happy if SDN produces 10 top-tier partners by the end of this year, he said.
A Salesforce.com spokesman declined comment on NetSuite's characterization of Salesforce's strategy for AppExchange and Force.com.
451 Group analyst China Martens said via e-mail that some ISVs (independent software vendors) tell her "they really like the exposure they get to Salesforce.com's large customer base on AppExchange" but "don't like the fact that all apps are effectively equal, so their particular app doesn't get any special billing aside from a potential user star rating."
NetSuite's take on the AppExchange, dubbed SuiteApp.com, will be a showcase site for the applications partners build. NetSuite is still mulling over whether to add an e-commerce engine to the site, since applications related to ERP (enterprise resource planning) don't tend to lend themselves to the "swipe a credit card" purchasing model, Haarmans said.
While NetSuite's move to build a partner ecosystem around its vendor-centric application platform clearly "follows a template" set by Salesforce.com, it makes strategic sense, according to IDC analyst Robert Mahowald.
SaaS (software as a service) vendors have realized that if they merely slug it out head-to-head against others year after year, "they're not going to grow as fast as they want to," Mahowald said.