Customers are running away from NetSuite

This is an excerpt from the Abridged Mind Blog site which makes some interesting insights into the churn rate and disatisfaction rates of Netsuite customers.  I’ve found if you simply google “netsuite sucks” you can find a large number of hits compared to competitive products

———————————

Nice quarter announced yesterday by NetSuite.  Fourth quarter revenues increased by 57%, with full year revenues up 62%. It all looked great until I read the customer number. Over the last 5 years this company has lost more customers than it has been able to add.

This is one of those things that just failed to register the first time I saw it. In scanning the company’s S-1 filing with the SEC there is a note that the customer base was “over 5,400”. That should have caught my eye. It didn’t. But today, reading the earnings press release I saw the company added 432 customers during Q4, bringing the customer count to “over 5,600”. Interesting. I would not have expected it to be 5,832 as there has to be some churn in this business. But what does it say when your rate of churn is about half of your customer add rate?

This serves to validate the discontentment that is captured in the comments following these two blog posts by Dennis Howlett.

NetSuite nightmares – Sept 27, 2007. Comments
NetSuite nightmares: part deux – Jan 10, 2008. Comments

In light of this dissatisfaction the customer add issues make sense. And by the way, it’s much worse than this most recent quarter indicates. Take a look at this press release on the NetSuite website. That’s a release from March of 2003 which boasts that the company had surpassed 6,000 customers. Do you mean to tell me that all of the customer adds you could muster over the last 4-3/4 years have not been enough to offset the churn in your existing customer base? That’s incredible.

2009-03-31T11:19:38+00:00 March 31st, 2009|Industry Insights|1 Comment