New Licensing Model Announced for NetSuite Warehouse Management

The News: NetSuite announced it is introducing a new licensing model that will give customers task-specific licenses for employees who do not require access to the complete set of features within NetSuite Warehouse Management. At SuiteWorld, the company’s annual customer conference, executives noted that this approach is designed to expand access to NetSuite, enabling customers to “do more with less.”

You can view a release detailing the new innovations at NetSuite’s website.

New Licensing Model Announced for NetSuite Warehouse Management

Analyst Take: NetSuite plans to roll out a new licensing model with task-specific licenses for employees who do not need full access, according to the enterprise resource planning (ERP) vendor. The first task-specific license is for NetSuite Warehouse Management, which grants warehouse employees with access only to NetSuite Warehouse Management functions for receiving, put away, picking, and shipping functions, instead of making the entire feature set available.

According to NetSuite executives, customers will be able to select either a full license or a license with warehouse-only features, but they will not be able to pick and choose which features to turn on or off. Other task-specific licenses are expected in the future, based on customer demand and whether the NetSuite Warehouse Management licensing model drives incremental use and revenue.

Enabling Customers to Do More With Less

One of the themes at SuiteWorld this year was how companies need to do more with less. Economic uncertainty, combined with a desire to operate more efficiently, has led to organizations seeking out ways to control both direct and indirect costs.

NetSuite’s willingness to create a bite-sized version of its NetSuite Warehouse Management module, with a limited feature set and reduced license cost, should resonate not only with the cost-conscious mid-market organizations that make up a sizeable part of the company’s customer base, but also with larger enterprises that are trying to right-size their technology spending through targeted cuts.

Addressing Competition From Industry-Specific ERP Vendors

The limited-feature license option likely will also help NetSuite to compete against more industry-specific ERP systems, which typically include features that are directly relevant to a given industry while leaving out more general or generic features. These industry-specific ERP systems are marketed as being specially optimized for a particular vertical and function, eliminating feature bloat that can increase complexity and cost to the customer.

NetSuite executives indicated that they are not, however, seeking to roll into every vertical. Instead, the company will be opportunistic and move into the industries where it has momentum and can provide targeted functionality. NetSuite announced that it is rolling out targeted solutions for healthcare, restaurants, and hospitality, though it was not ready to announce whether or when these or any other vertically targeted modules would receive a limited-feature license option.

Landing and Expanding Via Driving Utilization

The limited-feature license also supports the company’s land-and-expand go-to-market strategy, with the focus on getting companies established with the core functionality of NetSuite (usually basic ERP) and then expanding into other related data systems and tools.

By creating a licensing scheme that encourages use in an economical, targeted manner, NetSuite can expand its user footprint while also being sensitive to its customers’ financial constraints. If these customers derive value from their limited-feature licenses, there is a greater likelihood that other departments and divisions may seek out a similar license structure, thereby increasing the overall reach and utilization of the NetSuite platform.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

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