What is NetSuite?

NetSuite is a comprehensive cloud-based business management solution utilized by over 36,000 organizations to enhance their operational efficiency. It offers automation for essential processes and provides real-time financial and operational performance visibility. Accounting, order processing, inventory management, manufacturing, supply chain, and warehouse operations are all handled by NetSuite’s integrated suite of apps. This powerful tool is popular among fast-growing businesses, ranging from pre-revenue start-ups to small and mid-size enterprises, as it empowers them to streamline operations and gain valuable insights for better decision-making.

As a leading NetSuite Solution Provider, we frequently encounter inquiries regarding NetSuite pricing and licensing structure. These questions may include:

• What is the cost of NetSuite?
• How does NetSuite’s pricing model work?
• Are there any ways to optimize and save on NetSuite licensing expenses?

To address these common queries, we have meticulously curated and updated a comprehensive blog, “2023 Guide to NetSuite Pricing- Navigating Costs for Optimal Business Growth.” This blog is tailored for busy business leaders considering NetSuite ERP solutions for their businesses.

Our primary objective is to equip you with all the essential information needed to make the most informed decisions during your NetSuite evaluation and purchase process. We aim to provide insights on maximizing the value of your NetSuite investment while managing costs effectively.

NetSuite Licensing: Working Directly with NetSuite Vs. with a Partner

Licensing NetSuite can be a perplexing process, particularly for first-time buyers. Unlike many other software ecosystems, where licensing is exclusively conducted through the software vendor, NetSuite offers multiple avenues for obtaining licenses and services.

For instance, vendors like Salesforce or Oracle usually manage licenses through corporate sales representatives, and authorized partners commonly handle professional services. In contrast, the Microsoft (Dynamics) ecosystem often requires partnering with a specific provider for software licensing and services.

NetSuite, however, adopts a more flexible approach. You have numerous options as a buyer:

1. NetSuite Solution Provider: You can work with a NetSuite Solution Provider, a specialized partner well-versed in NetSuite’s offerings and implementation.
2. NetSuite’s BPO Program: Alternatively, you may collaborate with an accounting agency affiliated with NetSuite’s BPO (Business Process Outsourcing) program.
3. NetSuite’s Direct Sales and Services Team: The direct route involves engaging with NetSuite’s sales and services team for licensing and assistance.

Each path has unique advantages, allowing you to select the most suitable option that aligns with your specific requirements and preferences. This diverse approach sets NetSuite apart from other software ecosystems and gives buyers more choices and flexibility.

The Role and Approach of NetSuite’s Direct Sales & Service Team

NetSuite’s direct sales and service team comprises commissioned tele-sales representatives focusing on specific industries and company sizes for ERP lead generation. This team plays a significant role in selling many NetSuite license agreements and professional service engagements.

Their approach includes offering their professional services and utilizing SuiteSuccess, a standardized implementation methodology to get clients up and running on NetSuite within a quick timeframe, typically 100 days or less. SuiteSuccess is particularly well-suited for companies with simpler needs and within specific industries. However, there may be better fits for larger, more complex organizations or those seeking a best-of-breed approach with multiple system integrations.

The evaluation and scoping process conducted by NetSuite’s direct sales and service team can be more structured, making it attractive for buyers who prefer a highly organized sales process. However, experienced ERP buyers might find this approach somewhat superficial, lacking the depth and flexibility that experienced senior consulting organizations can offer.

Some former NetSuite clients have expressed issues about the direct sales team’s inability to provide price information throughout the sales process. This aspect has been a point of criticism for certain buyers seeking more openness and clarity regarding NetSuite’s pricing model.

Benefits:

Working directly with NetSuite has many benefits, including:

• the ability to interact directly with the company
• deeper understanding of the product
• more personalized support
• direct sales and service team is well-equipped to handle extensive global deployments, making it suitable for large-scale implementations across various regions.
• Well-structured sales methodology and abundant resources for product demonstrations, the direct sales team can efficiently showcase the software’s capabilities, aiding potential customers in their decision-making process.
• For newer products or those obtained through acquisitions, engaging NetSuite’s Professional Services team may be necessary for successful implementation, ensuring seamless integration and utilization of the solution.

Drawbacks:

However, there are some drawbacks while working with NetSuite directly as well:

• NetSuite’s sales and service approach centers around one primary methodology, SuiteSuccess. While this methodology aims to streamline processes, the evaluation and implementation can feel rigid and less flexible compared to other approaches.
• One notable drawback is the limited in-house technical expertise, integration capabilities, and 3rd-party services NetSuite offers. As a result, customers may find it more expensive to access Professional Services and support directly from NetSuite compared to working with a partner.
• A key customer challenge is the lack of a single “throat to choke” when issues arise. Dealing with multiple sales contacts, support teams, and consulting personnel can lose continuity throughout the software usage life cycle.
• Customers often feel abandoned after going live on the software, as the transition from evaluation to purchase, implementation, and ongoing support involves interacting with various individuals, making it challenging to establish a consistent and dependable relationship.

NetSuite BPO Partners:

NetSuite’s BPO program caters to accounting agencies offering a comprehensive package, bundling NetSuite software with monthly recurring accounting services. Instead of obtaining their own customizable NetSuite instance, clients receive a pre-configured NetSuite instance based on agreed-upon deliverables from the BPO partner.

The BPO program is particularly well-suited for well-funded small companies with significant growth potential that may need more time to be ready to establish an in-house accounting and finance team.

Benefits of opting for NetSuite BPOs include:

• Outsourced accounting services along with NetSuite software in one package.
• A single vendor relationship for NetSuite software and accounting services simplifies management.

However, there are potential drawbacks to consider:

• If a company brings accounting in-house, it will need a new NetSuite instance and implementation should it continue using the NetSuite platform.
• It may be challenging to fully leverage NetSuite’s renowned customization capabilities since the pre-configured instance provided by the BPO partner may have limitations.

NetSuite Solution Provider:

NetSuite Solution Providers are diverse consulting organizations comprising experts with various backgrounds, including technologists, management consultants, software developers, former end-users, and integration specialists.

Their primary objective is to assist first-time ERP buyers in evaluating whether NetSuite aligns with their requirements and propose a tailored combination of software and professional services to meet the organization’s goals.

NetSuite Partners can customize the evaluation approach according to the buyer’s specific needs and intentions, recognizing that a one-size-fits-all approach doesn’t apply to evaluations, scoping, and methodologies with NetSuite Partners.

While both NetSuite Solution Providers and NetSuite’s direct sales team operate from the same NetSuite price sheet, the overall cost of deploying a NetSuite solution becomes more nuanced once services, integrations, customizations, and potential third-party add-ons are factored in.

Working with NetSuite Partners offers several potential benefits:

• Access to NetSuite resources as well as professional consultants that can assist in evaluating and purchasing NetSuite software at favourable terms and price.
• Provision of multiple implementation methodologies and ongoing support services, including customizations, integrations, and post-go-live optimization.
• Some partners may possess industry-specific intellectual property (IP) for added value and faster deployment.
• Enjoy a single point of contact, or a “one throat to choke,” which ensures continuity throughout the evaluation, purchase, implementation, and support phases.

However, there are certain potential drawbacks to consider when working with NetSuite Partners:

• NetSuite’s growth has led to an influx of new partners, so finding reputable partners with substantial NetSuite expertise is essential.
• For niche products like NetSuite Payroll & SuiteCommerce InStore POS, specific NetSuite resources may be required for implementation, although the NetSuite Solution Provider oversees the overall engagement.

When searching for a NetSuite Solution Provider, it is crucial to prioritize those who specialize in your specific industry or vertical. Working with such partners ensures you receive tailored expertise and insights relevant to your business domain.

NetSuite Solution Providers are vital in educating you about any potential pitfalls of NetSuite licensing. Their in-depth knowledge and experience enable them to guide you through the licensing process, highlighting any potential challenges or issues that may arise and providing valuable advice to ensure a smooth and successful implementation.

NetSuite Software Packaging Overview: 

NetSuite stands out from industry-specific niche ERP systems by offering a versatile platform that caters to various industries and business models across all departments. This diversity enables NetSuite to provide various pricing options, making the software accessible to start-ups and large enterprises.

Regardless of your business’s size or industry, NetSuite offers a suitable pricing and licensing package to meet your needs. Whether you are a small accounting team supporting an e-commerce venture or a global manufacturing organization, NetSuite has tailored solutions for you.

NetSuite’s pricing and licensing structure include multiple packages that cater to different industry types, company sizes, and deployment preferences. Each industry-specific package not only includes the core functionality of NetSuite but also incorporates relevant add-on modules designed specifically for that industry.

Here’s an overview of NetSuite’s core functionalities and other industry packages:

Included in NetSuite ERP Base Functionality:

The following features are included in NetSuite ERP Base Functionality:

• General ledger
• Accounts payable
• Purchasing
• Inventory management
• Order entry
• Accounts receivable
• Expense reporting

• NetSuite customer relationship management (CRM) and sales force automation (SFA)
• Advanced shipping with connected UPS or FedExQuote and order management
• Marketing automation with campaigns
• Customer service and support

• Productivity tools, such as contacts, calendars, and events.
• Real-time dashboards displaying key business metrics and report snapshots.

Included in NetSuite CRM Base Functionality:

• License of NetSuite CRM+ with a single user login
• Sales Force Automation (SFA) with capabilities for quote and order management.
• Offline client access to support field sales personnel.
• Marketing automation, including the management of campaigns and online forms.
• Support features for case capture, routing, and escalation.
• Productivity tools like contacts, calendars, and events to enhance efficiency.
• Intranet document publishing for easy access to internal resources.
• Real-time dashboards that serve as workspaces, displaying key business metrics, reports, and snapshots.
• A customer self-service portal with unlimited logins to enhance customer experience and engagement.
• Partner management functionality with a basic partner portal for streamlined partner collaboration and partner communication.

Included in Retailer Edition:

NetSuite Retail Apparel Commerce encompasses all the core functionality of NetSuite ERP and extends its capabilities with the following additional features:

• Financial management tools.
• Inventory management functionalities.
• Demand planning capabilities.
• Grid order management to facilitate seamless order processing.
• Work orders and assemblies’ management for efficient production processes.
• Point of Sale module (POS) for in-store transactions.
• SuiteCommerce InStore (POS) to enhance the in-store shopping experience.
• Pick, pack, and ship functionalities for streamlined order fulfillment.

Included in Manufacturing Edition:

NetSuite Manufacturing ERP expands upon the core functionality of NetSuite ERP and incorporates the following additional features:

• Work orders and assemblies’ management to streamline manufacturing processes.
• Grid order management, allowing for efficient order processing and management.
• Inventory management tools to optimize stock levels and tracking.
• Demand planning capabilities to forecast and manage production requirements.
• Manufacturing work in progress (WIP) tracking to monitor the status of ongoing manufacturing operations.
• Routing management to define and optimize production processes and workflows.

Included in Software Edition:

NetSuite Software Edition encompasses the core functionality found in NetSuite ERP and extends its capabilities with the following additions:

• Financial management tools to handle accounting, reporting, and financial processes.
• Revenue management functionalities for efficient revenue recognition and tracking.
• Software management features to facilitate the management and optimization of software-related activities.

Included in Wholesale Distributor Edition:

The NetSuite Wholesale and Distribution license builds upon the core functionality of NetSuite ERP and includes the following additional features:

• Comprehensive inventory management capabilities.
• Efficient grid order management functionalities.

Included in Professional Services Edition:

NetSuite SRP (Services Resource Planning) incorporates all the core functionalities present in NetSuite ERP and extends its capabilities with the following additional features:

• Financial management tools to handle accounting and financial processes.
• Project management functionalities to efficiently manage projects and tasks.
• Job costing capabilities for accurate tracking and management of project expenses.
• Resource allocation features to optimize the allocation of resources to various projects.
• Revenue management functionalities to handle revenue recognition and tracking.

Included in Retail Omnichannel Edition:

NetSuite Retail Omnichannel encompasses all the core functionality of NetSuite ERP and expands its capabilities with the following additional features:

• Financial management tools for seamless accounting and financial processes.
• Inventory management functionalities to efficiently handle stock levels and tracking.
• SuiteCommerce Advanced is an advanced e-commerce platform for robust online selling.
• SuiteCommerce InStore (POS) to enhance the in-store shopping experience.
• Multiple units of measure support versatile product measurement.
• Matrix items management to handle complex product variations.
• Serialized inventory tracking for precise monitoring of individual items.
• Barcoding features for items and transactions, enabling streamlined data capture.
• Pick, pack, and ship functionalities to optimize order fulfillment.
• Advanced budgeting tools for comprehensive financial planning.
• Advanced billing schedule capabilities for flexible and sophisticated billing arrangements.

NetSuite Cost Based on Company Size:

Once you’ve decided whether to license NetSuite through one of the industry packages or via individual components, the next crucial step is determining the most suitable category based on your company size and requirements.

NetSuite offers various licensing categories to cater to different business scales:

• Starter (select industries) – Ideal for businesses with less than 15 users.
• Emerging (select industries) – Designed for organizations with less than 30 users.
• Limited Edition – Tailored for companies with less than 10 users and under 50 employees.
• Mid-Market Edition – Suited for larger businesses with more than 10 users and/or multiple legal entities.
• Enterprise Edition – Geared towards large enterprises with over 1,000 users.

Additionally, NetSuite provides separate license packages based on the chosen deployment model: SuiteSuccess, which offers a productized implementation approach, and the traditional deployment method.

NetSuite Pricing per User:

When licensing SaaS software like NetSuite, one of the primary cost factors is the number of user licenses needed. NetSuite adopts a named user approach rather than a concurrent model, meaning each person requiring full access to the system requires their license for complete auditability.

Full User License

While some users with limited needs might share a common login, assigning a user license to everyone is generally recommended. NetSuite offers several user types, the most common being the full user license. Full users have access to all application areas as permitted by their permissions and role-based security. Any user who needs to transact in the system requires a full user license.

Employee Self-Service License

Another common user type is the Employee Self-Service license, which is sold in packs of five for the price of one. These licenses are ideal for individuals who need to enter or track time against a project, manage expense reports, and track and request time off within NetSuite.

There are also less common user types required for customers who deploy specific advanced modules like Oracle NetSuite Planning & Budgeting Cloud Service Users and NetSuite OpenAir Users.

A full user license is still necessary for read-only access to reports and dashboards. However, if static reports suffice, you can automate scheduled reports to be sent out in the desired format and frequency (e.g., Excel, CSV, PDF).

Remember that you can start with a few user licenses and add more as needed during your license agreement. However, you cannot reduce the number of required users during the middle of your agreement, so careful consideration is essential to avoid over-purchasing licenses.

NetSuite Cost for Ecommerce:

NetSuite SuiteCommerce, previously known as Site Builder, has evolved to keep up with the changing e-commerce landscape. NetSuite made substantial investments in the SuiteCommerce portfolio through organic development and key acquisitions, resulting in SuiteCommerce Standard, SuiteCommerce Advanced, and SuiteCommerce InStore.

Unlike standalone e-commerce solutions like Shopify or Magento, NetSuite SuiteCommerce is almost always used with NetSuite ERP and CRM. This seamless integration eliminates the need for connectors or additional integrations, providing a significant advantage over other best-of-breed e-commerce platforms.

Here’s an overview of the SuiteCommerce products:

• SuiteCommerce Standard: A SaaS-based e-commerce solution that offers a templated approach like Shopify, providing a quick setup for a fully featured e-commerce site. It suits businesses with straightforward needs and a desire for fast implementation.
• SuiteCommerce Advanced: An enterprise-grade e-commerce platform that offers complete customizations for all aspects of the shopping experience. It allows businesses to run B2B and B2C operations on a single platform, providing advanced features like faceted search, robust site search, dynamic merchandising, and mobile optimization.
• SuiteCommerce InStore: A mobile Point of Sale (POS) solution built on the SuiteCommerce platform, designed to deliver a seamless digital and physical shopping experience. It equips associates with customer and inventory information on handheld devices, enhancing customer service and efficiency.

When considering SuiteCommerce solutions, it is essential to partner with a Commerce Agency Partner (CAP) who can assist in designing and deploying a SuiteCommerce solution effectively. While all NetSuite Partners can sell SuiteCommerce products, CAPs possess specialized expertise to ensure a successful implementation aligned with specific business needs.

Implementation Cost of NetSuite:

NetSuite implementation pricing can vary significantly based on factors such as the size and complexity of your business and the specific NetSuite partner you choose to collaborate with.  The final cost will largely depend on the extent of customizations and integrations required to tailor NetSuite to your unique business needs.

It’s important to note that there is no one-size-fits-all answer for NetSuite implementation pricing due to the individualized nature of each project. However, enlisting the services of an experienced NetSuite partner can help you optimize costs and maximize the value of your NetSuite investment. Their expertise and knowledge can ensure a smooth and efficient implementation process tailored precisely to your business requirements.