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The proportion of procurements where the customer chooses a cloud-based ERP system is continuously increasing. It is no longer a trend but has instead become the standard delivery model. Meanwhile, on-premise has become an alternative that still occurs but where the share of deals is rapidly decreasing. Although there is still some uncertainty in the market about what cloud-based means, it is public cloud solutions that attract the most interest (as opposed to private cloud services provided via, for example, Amazon or Azure).
Two cloud-based (public cloud) ERP systems that have recently received great attention and are rapidly growing in the Scandinavian and especially the Swedish market are SAP Business ByDesign and Oracle Netsuite. These two systems have many similarities and often reach a final stage when customers are procuring a new ERP system.
Netsuite was launched as early as 1998 as one of the world’s first public cloud systems. With over 20 years on the market, the product has undergone several generational shifts and has over time become a very feature-rich system with support for many different industries. Netsuite has been available on the Swedish market since 2009 but experienced limited growth until 2017 when the number of partners increased and the entire market shifted towards cloud-based systems. Today there are around 20,000 customers globally, of which about 100 are in Sweden.
SAP Business ByDesign was launched in 2007 after SAP realised it had to meet the demand for cloud-based systems for the small/medium-sized organisation segment. Instead of trying to convert the older SAP Business One, they chose to develop a completely new ERP system. Although the system has been on the international market for over 10 years, it was only in 2018 that it was made available in the Swedish market. Globally, there are about 4-5,000 customers today, of which about 100 are in Sweden.
In a short time, both Oracle Netsuite and SAP Business ByDesign have gone from having few or no partners in Sweden to both having over 5 partners. And as a result of more partners, we also see rapidly increasing sales.
One similarity is that both SAP Business ByDesign and Oracle Netsuite offer the customer a "platform" that includes much more than just a traditional ERP system. In SAP’s case, this refers to the HANA platform, and for Netsuite, it is SuiteCloud. Both platforms offer a large library of services and tools that extend significantly beyond what applies to traditional ERP systems.
The toolbox in Netsuite is more extensive compared to HANA and has, over its 20 years, reached a very broad target group of developers who continuously add to the library with available apps and additional functions for the application. In principle, these tools allow for the creation of completely new and unique additional features and modules for an already feature-rich ERP system.
The same can essentially be said of HANA, although SAP still maintains a stance that is somewhat more protectionist compared to Netsuite. However, even in HANA, we see an explosive development of available apps and additional services emerging among their partners. In the same way that we have seen for many years among Microsoft’s partners.
Functionally, SAP Business ByDesign and Oracle Netsuite are relatively similar, and it makes sense that these two systems quite often meet in procurements. Both ERP systems can offer functionality for several business processes, although with some limitations in manufacturing. Netsuite benefits from its close relationship with Oracle with its database and decision support. Similarly, SAP benefits from the HANA platform and the strengths that come with reporting and decision support. Netsuite has recently supplemented its product with support for a built-in HCM suite, whereas in SAP’s case, SuccessFactors is needed to be competitive in HCM.
In its basic version, SAP Business ByDesign is more packaged than Oracle Netsuite, which means that the system can be implemented in a relatively short time. At the same time, everyday experience shows that quite a bit of configuration is always required to get both systems up and running. Today, it is a very close competition between SAP Business ByDesign and Oracle Netsuite. And at this point, the choice of partner becomes decisive for who emerges victorious in a procurement.
