NetSuite Targets Salesforce Clients with Discounts

BOSTON, Oct 22 (Reuters) – Software maker NetSuite Inc (N.N) launched a marketing campaign on Wednesday to win customers away from rival Salesforce.com Inc (CRM.N), offering them 50 percent discounts over current fees.

NetSuite, which is majority-owned by Oracle Corp (ORCL.O founder and billionaire Larry Ellison, is focusing the new marketing drive on pricing at a time when businesses are increasingly cutting back technology budgets.

The discounts are only targeted at Salesforce.com, whose software helps sales staff manage their work. Those programs are known as customer relationship management software.

NetSuite also sells other types of software, including accounting programs, and may expand the discounting to include other rivals and product areas, said NetSuite Chief Marketing Officer David Downing.

"We are probably going to be launching similar salvos at some of our other competitors," he said. "In a bad economy, pricing plays a bigger role in decision making."

NetSuite will offer customers who dump Salesforce.com with up to 100 hours of professional services to help with tasks such as migrating to the new system and staff training.

Salesforce and NetSuite are among the most prominent business software makers that deliver their products as services over the Web, using the same approach that Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) and Google Inc (GOOG.O: Quote, Profile, Research, Stock Buzz) have used to deliver email, maps, calendars and other programs to consumers.

AMR Research analyst Bruce Richardson said NetSuite’s campaign is likely to generate some buzz, but that he is not convinced it will lead to many customer wins.

"Even if you take advantage of the price, you still have to migrate all that data. There’s still lots of challenges," Richardson said. (Reporting by Jim Finkle; Editing by Gary Hill)

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