Netsuite goes for SAP and lines up TribeHR acquisition

Two moves by major-league SaaS provider, Netsuite, show it is working hard build its place as the provider of core business management services for the SMB and mid-sized business communities, as well as targeting the two-tier operational gambit that a growing number of larger enterprises are starting to favour.

One of these is the start of proceedings on acquiring Human Capital Management specialist, TribeHR. This company is already a Netsuite partner and user of its SuiteApp development environment, but the move shows that Netsuite sees real scope in the marketplace for closer integration and collaboration between mainline business management tools and human resources-oriented services.

It also shows this does not have to be an either/or business model, either. As well as moving on TribeHR, Netsuite will continue to develop its partnership with Oracle in human resources for the enterprise.

But first comes a an all-out push to grab some of SAP’s market share, especially as the latter seems to have lost some interest in its early attempts to move its ERP behemoth into the cloud.

So NetSuite has announced the SAP Business ByDesign Sunset Migration Program. This is pitched straight at companies running SAP Business ByDesign.

Netsuite is targeting this at those companies that it suggests are fed up with SAP’s repeated re-architecting, re-positioning and ultimate decision not to significantly invest in the development of Business ByDesign. Its alternative is its proven cloud-based business management system, currently in use by more than 16,000 organisations and subsidiaries worldwide.

Under the Business ByDesign Sunset Migration Program, Business ByDesign customers in good standing are eligible for one free year of subscription and free data migration to speed their transition to NetSuite.

Initially launched in 2007, only to be pulled back and re-launched in 2010, it is Netsuite’s contention that Business ByDesign never lived up to the lofty goals of 10,000 customers and $1 billion in revenue that SAP set for the project.

“SAP co-CEO Bill McDermott once stated that SAP would see how tough NetSuite was when he threw Business ByDesign like a 99 mile per hour fastball at us. Now, SAP is seeing how tough their customers are by pulling the plug on Business ByDesign,” said NetSuite CEO Zach Nelson. “We are ready to turn SAP customers’ pain into delight by enabling them to experience the benefits of the most widely used cloud business suite, backed by NetSuite, the industry’s leading vendor of cloud ERP software suites.”

For companies that have already invested heavily in SAP’s on-premise architecture at headquarters, NetSuite OneWorld for SAP is also available, offering a proven method for enjoying the benefits of cloud computing at subsidiaries or distributed business units via a two-tier ERP model. Companies running NetSuite OneWorld at subsidiaries can roll up data to their SAP system at the corporate level with SuiteCloud Connect for SAP, a prebuilt integration based on industry standard technologies including SOAP (Web Services), JavaScript, ODBC and CSV.

NetSuite Has also announced the not altogether unexpected move that it has entered into a definitive agreement to acquire TribeHR, a specialist in Human Capital Management (HCM) solutions. This, the company states, is the first integrated cloud ERP and HCM software suite for small and mid-sized businesses (SMBs). 

The proposed acquisition should create a single cloud solution for modern SMBs with ERP to run their core business operations as well as a rich, social HR solution to manage employees. The terms of the proposed acquisition were not disclosed.

TribeHR is already a SuiteCloud Developer Network (SDN) partner with more than 450 customers operating in more than 50 countries around the world. It now has nearly 30 joint customers with NetSuite for the TribeHR SuiteApp. It also complements NetSuite’s existing payroll product, NetSuite Premier Payroll Service.

“TribeHR was founded on the idea that the best companies are built by inspired, connected and engaged employees,” said Joseph Fung, Co-Founder and CEO of TribeHR. “The initial reception of TribeHR in the NetSuite installed base proved the power of coupling employee engagement with operational excellence, and we are going where no company has gone before in combining core business process applications with employee interaction applications."

TribeHRencompasses a full suite of HCM functionality required to recruit, manage and reward employees, including a core HRIS (Human Resource Information System) to manage essential employee information individually and in aggregate, recruiting capabilities including a social applicant tracking system (ATS) with integrations to LinkedIn and Facebook, Talent Managementfunctionalityfeaturing 360-degree feedback tools, goal management, performance appraisals, skills tracking, and values and culture tracking, social HR overlaying all the functionality of the system, and last but not least support for iOS mobile devices so employees can collaborate and connect no matter where they are.

The proposed combination of TribeHR and NetSuite ERP would eliminate the need for manual data entry across disparate systems, reducing time, costs and the risk of error.

Earlier this year, NetSuite announced the expansion of the SuiteCloud partner ecosystem with leading Human Capital Management (HCM) solutions, which included TribeHR. The planned acquisition is, therefore not totally unexpected. It will also not stop the company continuing to partner in areas of workforce management, global payroll and other complementary solutions.

For example, NetSuite plans to continue its product integration and go-to-market strategy with Oracle HCM to deliver a single, integrated solution that seamlessly connects HR and finance systems for mid-sized customers.   For large organizations where Oracle HCM is already deployed, two-tier deployments of NetSuite in smaller subsidiaries can easily connect with its corporate HR system.