March 04, 2009, 8:54 PM — On-demand ERP vendor NetSuite is offering Sage Software customers at least 50 percent off their NetSuite fees for the first year if they switch away from its rival's products, NetSuite said on Wednesday.
Sage is just the latest target of similar campaigns by NetSuite, which have also focused on Salesforce.com and SAP. The new offer is for users of any Sage products and covers the U.S., Europe and Asia-Pacific.
NetSuite listed some customers in the U.S. and U.K. who it said have already switched from Sage to NetSuite. But a Sage executive scoffed at the announcement.
"This is not a new tactic," said Himanshu Palsule, executive vice president and general manager of business management at Sage North America. "They've done this before and we haven't seen much traction. It's a sales promo."
NetSuite seems to be targeting much larger customers than Sage, he said.
"We are still solid in the SMB space. We still have 5.8 million customers around the world," he said. "Given that, you can imagine there will be a few who switch."
But Sage might gain just as many customers from those have tried a software-as-a-service offering such as NetSuite and found they don't like it, he added.
As for Sage Live, Sage "didn't want to risk [its] brand and legacy by making a mistake in a new market," Palsule said. Once the security problem was found, the company "took the most responsible course of action" by taking down the beta test site, he said.
Sage customers are definitely the right target for NetSuite, but not all will be receptive to the discount offer, said Forrester Research analyst Ray Wang.
"In the SMB deals we are [involved] in, there are just as many people who are on-premise as SaaS," he said, adding that this could change over time.