ERP vendor NetSuite claims rival Sage's lack of a clear cloud strategy is driving partners into its arms – and is parading VAR Eureka Solutions as the first defection.
Eureka has traditionally worked solely with Sage but is introducing NetSuite to its portfolio amid concerns the latter could not fulfil its customers' cloud demands. It will continue to work with Sage on the on-premise side.
Sage announced in May that it would use Windows Azure to take some of its ERP solutions into the cloud, beginning with Sage 200 in the UK.
However, Martin Painter, EMEA director of channel sales and development at NetSuite, claimed many Sage partners are seeking alternatives because Sage's offering cannot cater for their customers' cloud needs.
"We understand from Sage partners [that] it is a long way off," he said. "It is not going to have all the capabilities Netsuite has and the delivery method has not been designed purely for the web. That is what has given partners a level of concern and that is why they are talking to NetSuite."
Customer demand for cloud-based ERP is particularly strong among firms with 20 to 100 staff, Painter said.
He added that Eureka, which has customers in the retail, wholesale, professional services, IT and charity sectors, was a big scalp, but promised that NetSuite would unveil a string of Sage recruits over the coming months.
Partner recruitment and enablement efforts have been stepped up to cope with demand, Painter added.
The vendor, which posted a net loss of $7.93m (£5m) on sales that rose 31 per cent to $79.8m in its most recent quarter, currently has 25 Solution Partners in the UK. They earn 30 per cent margin on sales, including on renewals.
However, Mike Ramsay, managing director of Sage Circle of Excellence partner DMC, said he "totally disagreed" with suggestions that Sage's cloud push had fallen flat.
"I can guarantee that DMC is not going anywhere," he said. "They have taken Sage 200 and adapted it for the cloud. We have two sales going live in the next couple of weeks and have no qualms it will be successful. There are a couple of features that aren't in the first version but we've been informed they will be in the next 12 months.
"Sage has the most fantastic brand name for accounting in the UK. If a minor reseller wants to go off on the NetSuite trail, then good luck to them."
Ramsay said DMC had ran the rule over NetSuite four years ago, but had ruled it out due to concerns over margins and fears it would take large deals direct.
"I did my homework," he said.
Painter would not disclose the relative sizes of NetSuite's channel and direct businesses, but claimed conflict between the two was not possible.
"The channel is and has been for several years a rapidly increasing portion of revenues in EMEA, which reflects our commitment to it," he said. "We do not have conflict – once a partner has registered a lead in the system, it is safeguarded."
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