Why NetSuite ERP Is Less Expensive Than On-Premise Alternatives


NetSuite is one of the best cloud ERP systems, used by over 40,000 organizations across the world. From strong security & reliability, to inclusion of best practices, the software suite has many reasons for its popularity. However, it also significantly lowers costs for businesses, making it a viable financial option for small to medium size enterprises.

Why NetSuite Is Affordable:

The largest difference between NetSuite and on-premise ERP options is that NetSuite is a cloud ERP software. Businesses using NetSuite don’t have to pay for and manage their own IT infrastructure, including hardware, servers, IT technicians, staff, and more. This lowers capital investment drastically.

With a lower capital investment, the barrier to entry for ERP software implementation is also lowered, meaning smaller companies can now more easily afford it. But another important benefit of this is that it speeds up time to deployment. Businesses don’t have to spend time purchasing and setting up their IT infrastructure. Instead, they get started much more easily and far more quickly. (Timelines for proper ERP implementations, which often take a year or longer, can drop by 50-75%)

Now, of course, just because a company doesn’t have to make its own infrastructure investments doesn’t mean that these costs totally disappear. The cloud provider, in this case NetSuite, still has to have its own hardware, servers, IT staff, and so on. Therefore, these costs are now moved into the operational investment side of things.

So why NetSuite if these costs are just moved from one place to another? The answer is that this method still lowers costs overall.

There are a few reasons for this. First, NetSuite is in essence bulk purchasing all of these IT investments for all of their customers. This means that when they improve their systems, the cost is spread out over all their customers, rather than falling on one customer alone, as is what happens to a company when it handle its own on-premise ERP. This also matters for security improvements, reliability, upgrades, etc.

As the company in charge, NetSuite also specializes in making these improvements to its system. It’ll therefore be more efficient than a business that has to manage both the IT infrastructure of its ERP software and its business, which is likely completely unrelated.

Finally, in certain situations, such as demand spikes, NetSuite reduces costs for companies too. If a business wants to be prepared for that sort of situation with an on-premise system, it’ll need the necessary capacity ready at all times. But with NetSuite, the company can just ramp up usage when the need arrives.

NetSuite also offers a host of other advantages. To learn more, see here.

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