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NetSuite Sweetens Offers To Recruit Channel Partners

Latest initiative drops first-year enrollment fee and promises more training and sales leads to help get solution providers get up and running more quickly.

The new NetSuite SuiteStart Service includes waivers of first-year $5,000 program enrollment fees, a free license for partners to use NetSuite ERP and CRM applications to run their own business, and more marketing resources such as marketing plan templates and sales leads.

The goal of the partner program enhancements is to help new partners get up-to-speed more quickly, especially those new to cloud computing, and do so without big up-front expenses. "We are knocking down some of the fiscal barriers," said Craig West, NetSuite vice president of channel sales, in an interview. "We're investing around [partner] enablement."

NetSuite launched the SP 100 initiative last year in an effort to overcome hesitation by some solution providers to carry Software-as-a-Service applications. The centerpiece of the program was an offer to let partners keep 100 percent of first-year revenue from new contracts and 10 percent of annual renewals -- a deal that gives resellers more up-front revenue than NetSuite's standard offer of 50 percent of a contract's first-year revenue and 30 percent of annual renewals.

NetSuite's partner base increased 40 percent in 2010, largely because of the SP 100 initiative, although West declined to provide specific numbers. "It was a wildly successful initiative for us," he said.

During an earnings call a few months after NetSuite launched the program in March CEO Zach Nelson said the effort had brought some 100 new partners to the company.

Although NetSuite intends to discontinue the 100-percent-of-first-year-revenue offer at some point, West said no end-date has been set for the program. The 100 percent first-year/10 percent renewals option requires a minimum two-year contract and West said partners choose that option over the 50/30 option on a contract-by-contract basis.

The new offerings for partners include free first-year training for three sales representatives and free first-year training for an unlimited number of employees in cloud technology implementation methodologies. West said NetSuite is also assembling a global enablement team to work with partners.

NetSuite also will provide new partners with sales leads to help them get started and offer "top-performing partners" access to ongoing sales leads, according to a NetSuite statement.

"We have had our eye on the cloud computing space for some time, and with the newly added enhancements made by the NetSuite SuiteStart Service, I knew the time was now for us to make the move," said Bryan Majewski, Managing Partner at solution provider Baker Tilly, a recent recruit to NtSuite's partner program. "Between the flexible revenue sharing and the comprehensive program support, we are confident we will be successful partnering with NetSuite," he said in a statement.

NetSuite is facing increased competition from big companies such as SAP and young companies such as Intacct in the SaaS ERP application market. Last week, at a partner conference in Savannah, Ga., SAP made a big push to recruit solution providers to carry its Business ByDesign on-demand ERP suite that competes head-to-head with NetSuite.

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