RealTime IT News

SaaS Hits The Malls

NEW YORK -- NetSuite gets 150 sales leads a day, mostly from online keyword searches. Hungry for more, it is reaching out to a new off-line partner in the hopes of driving even more revenue.

Zack Nelson, CEO of the provider of on-demand ERP systems, announced this week at the C3 Expo here that the company just signed an agreement with national retailer CompUSA.

He said that the agreement was a natural way for both companies to generate new sales from small and medium-sized businesses (SMB) .

"NetSuite customers are generally businesses that are outgrowing their first business systems, so it's a natural growth path for CompUSA's customers, and it's not cannibalistic for them," he said.

The new partners figure that CompUSA has sold applications, such as Excel and ACT, to smaller businesses. As the businesses grow, they might be ready for a solution that has more of an enterprise feel, which is something NetSuite feels it has.

Liz Herbert, an analyst with Forrester Research, said NetSuite does a great job of providing an all-in-one solution.

Now, by adding a bricks-and-mortar retailer to its distribution channel, the company is showing that it believes software-as-a-service has moved out of trendy neighborhoods and is ready for the malls.

Indeed, the title of Nelson's presentation was "Software as a Service Goes Mainstream."

Laurie McCabe, an analyst with AMI-Partners, a Boston-based consultancy focused on SMBs, agreed with this assessment.

"SaaS has reached a point where it has critical mass and momentum," she told internetnews.com.

Nelson said he believes that "SaaS is the last fundamental shift in software delivery."

The deal with CompUSA certainly gives NetSuite a large national footprint.

The retailer, which has close to 250 locations and did more than $4 billion in sales last year, will sell and provide training services for NetSuite solutions both through its stores and via phone and Web representatives.

Jim Loden, vice president of CompUSA business services, said the deal came about when a NetSuite customer asked a CompUSA business services employee for help. The representative recommended the solution to CompUSA executives who pursued the deal with NetSuite.

The partnership makes sense for CompUSA, said Loden, because it allows it to further its footprint among SMBs.

Loden explained that while it is known primarily as a store for consumers, the retailer does a significant amount of business with SMBs.

And the deal took fewer than four months to consummate, he said.

The companies are testing the partnership in the Northeast United States first, said Loden, before rolling it out to the rest of the country.