NetSuite socked with lawsuit by textile manufacturer

It's the second customer lawsuit filed against the cloud ERP vendor within the past few months

By , IDG News Service |  Software

Kentwool then decided to terminate its agreement with NetSuite and ask for a full refund, according to the complaint.

Kent subsequently was contacted by NetSuite vice president Roman Bukary, whom he asked for a money-back guarantee from NetSuite if the project was to resume. Bukary declined to do so, citing SAS (Statements on Auditing Standards) rules against doing so. "Upon information and belief, no such limitations exist," according to Kentwool's complaint.

NetSuite didn't immediately respond to requests for comment on Tuesday. Kentwool's suit is the second filed within a few months against the company for allegedly faulty implementations, following skin care product retailer SkinMedix's action in May.

While aggrieved, Kentwool itself may not have done enough to protect itself, according to a number of industry analysts.

"Kentwool repeatedly says that it relied upon NetSuite's representations of what its system could do," said analyst Frank Scavo, managing partner of IT consulting firm Strativa. "But vendors can be tempted to over-promise during the sales cycle. So it's dangerous to take the vendor's word for anything. You have to do your own reference checks to confirm what the vendor is saying."

However, cloud-based software like NetSuite receives continuous improvements, said Ray Wang, founder and chairman of Constellation Research. That means it's also important to understand what may be on the vendor's near and long-term road maps, he said.

What needs to happen is an industry push to avoid these types of customer complaints, in Scavo's view.

"There are still too many lawsuits involving ERP vendors," he said. "In manufacturing, there's a philosophy called 'zero inventory.' Maybe software vendors should have a philosophy of 'zero lawsuits.' Look at all the reasons you are getting sued and do something to address the core problems. There'd be a huge return on investment for a program like that."

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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