NetSuite has become the first Software as a Service (SaaS) ERP vendor to gain a certification that will help companies doing business in Germany comply with tough financial reporting standards, according to executives with the company.
It's another jab at SAP, which is still developing its long-promised SaaS ERP application, Business ByDesign. NetSuite has pitted itself against the German vendor over the last year in an attempt to woo customers to NetSuite's products.
NetSuite has exploited the delayed release of SAP's Business ByDesign and an SAP maintenance fee increase by offering SAP customers discounts on its NetSuite OneWorld software. Dubbing the campaign "Business ByNetSuite," it promised to halve the annual bills of SAP customers running R/3 releases if they switched to NetSuite.
In April, NetSuite extended its Suite Cloud offering to SAP customers, targeting NetSuite OneWorld at subsidiaries of companies running SAP at their headquarters and offering packaged integrations to tie it into their SAP back-end system.
NetSuite said it has coaxed between 30 and 40 customers to switch over from SAP, including Toyko-based chemical company AsahiKasei, which replaced SAP R/3 releases at its U.S. division in South Carolina.
In response to NetSuite's Suite Cloud offering in April, SAP spokesman Bill Wohl said "the potential of NetSuite having an impact on our business is negligible at this point."
SAP has said its Business ByDesign product will go to market next year. In turn, the vendor announced earlier this month that it was working on SAP on-demand applications for its enterprise-size customers.
Customers using ERP systems that aren't certified by the German Institute of Auditors have to tack on products from a third-party and export data from back-end systems to comply with reporting requirements mandated by the German government. Customers can now use NetSuite for this compliance process, making it the sole SaaS ERP vendor with the capability, according to NetSuite executives.
The certification, which took six months to achieve, marks the company's foray into the European market, specifically Germany, which has the biggest concentration of the midmarket customers NetSuite is targeting.
"The reason we chose Germany is because of the market numbers," said NetSuite's Mini Peiris, vice president of product marketing. "The fact that it's SAP's home turf is sort of the fun part of it."
German software certification requirements are the most stringent in Europe, according to Craig Sullivan, NetSuite's vice president of international products, and they ensure compliance with German commercial code, tax regulations and accounting principles. Compliance standards are akin to Sarbanes-Oxley in the U.S. and require that software systems provide controls, audit trail and reporting capabilities.
The German certification will act as a springboard for required certifications in other countries, Sullivan said.
"When you look at the requirements for Germany," he said, "they are in excess of most of the other countries."