NetSuite has always been an aggressive company. They pride themselves on taking the initiative, but in 2010 West turned up the heat on competitors by offering an unprecedented 100 per cent margins. Many in the channel thought NetSuite was off the wall with its SP100 program.
It was an unprecedented move by NetSuite to offer 100 per cent margin off of first year licenses subscriptions on new customer contracts. Channel partners had to sign customers to a minimum 24 month commitment. This offer does expire in 12 months.
“We feel strongly that 2010 is the year where on-premise VARs from Microsoft and Sage and the like stop waiting for Microsoft and Sage cloud solutions. They are tired of losing deals to cloud solutions,” West said.
West’s strategy with SP100 was to push solution providers into cloud services by helping them recoup their costs faster. With the program, partners can also create a predictable revenue stream for themselves based on customer renewals.
He also worked hard to dispel the myth that cloud meant zero services revenue this year.
“It’s a big mis-perception that cloud solutions or applications are not configurable or customizable,” he said. “I would say it’s more of a money maker than its perception. Solution providers are really service providers and they sell licenses as an end to lucrative services work. There’s a fear out there that there’s no services work in the cloud and customers buy it and it works.”