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Netbooks Resurfaces from Hibernation as WorkingPoint: SaaS for SMB with Nicer UI but Much Less Functionality

I’ve previously covered Netbooks, provider of an Integrated SaaS Business Suite for Very Small Businesses.

The company had an affordable On-Demand integrated business management solution for the   VSB – very small businesses, the “S” in SMB / SME: typically companies with less then 25 employees, sometimes only 3-5, and, most importantly, without professional IT support, in which case Software as a Service is a life-saver.

NetBooks tried to cover a complete business cycle, from opportunity through sales, manufacturing, inventory / warehouse management, shipping, billing, accounting – some with more success then others.   The process logic, the flow between various functional areas was excellent, but it was rendered almost unusable by a horrible UI. And it didn’t scale… so the company disappeared for a long year, completely re-building their code base.

Read on

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NetBooks: Integrated SaaS Suite for Very Small Businesses. Almost.

When I started this post 2 months ago, it had a more tongue-in-cheek working title: NetBooks – the Little Gem in Hiding – clearly a play on Dennis Howlett’s  post, NetBooks – a little gem.  That’s because despite Dennis’s positive review of this new SaaS solution for small businesses I found their website a major turn-off .   I did not find a feature-list, screen prints, demos: the closest they had was a contact form to request a scheduled demo.  Failure!  You can’t reach the “long tail” of the market via outbound sales; your site needs to be absolutely transparent, so potential customers can find all feature / price information at their fingertips, then just try-and-buy. 

But what a difference a few weeks make!  Having checked back, now NetBooks offers decent product information, online videos, in fact you can now set up a free trial account with sample data in minutes.  (While it looks like just another contact form, the process is automated, I received my email confirmation within a minute.) Self-navigation definitely beats just watching vid’s. Kudos to NetBooks for fixing a major shortcoming so fast!  (Note to self: don’t leave half-written posts, they may have a short shelf-life…)

Let’s look at the actual system now.  NetBooks aims to be an On-Demand integrated business management solution for small manufacturing businesses – in fact for other types of businesses, too, as long as they hold inventory and ship tangible products.  They cater for  what they call True Small Businesses (TSB), which I referred to as  VSB – very small businesses, the “S” in SMB / SME.  Typically companies with less then 25 employees, sometimes only 3-5, and, most importantly, without professional IT support, hence Software as a Service is a life-saver.

NetBooks tries to cover a complete business cycle, from opportunity through sales, manufacturing, inventory / warehouse management, shipping, billing, accounting – some with more success then others.  Manufacturing, Inventory, Shipping and their integration to Accounting appear to be a stronghold.  If you’re in sales, you’d like to see a Sales Catalog, if you’re in the warehouse, you want an Inventory List, and if you are in manufacturing, you need a Production Elements list: they are all one and the same, allowing you to define a product structure (Bill of Materials, BOM) with different physical characteristics, reorder points, pricing levels, warehousing requirements, marketing notes…etc.   In other words, different functions can update their own slice of the same information and it’s shared with others (of course in a small business several of these functions may very well be carried out by the same person.)

Not having any procurement / purchasing functions appears to be a glaring omission: after all, if you’re in manufacturing, you will likely need to buy some components / materials. 

Another function, nominally present, but rather weak is CRM.  I can set up a Revenue Opportunity list, track contacts, events, even financial terms per record, but what’s the point if I can’t turn these into a Quote, later a Sales Order?  In fact I have to start a sales order from scratch, and it does not update the opportunities: unless you close them out, they will show as prospects long after you shipped the order, invoiced the customer and received payment.

Sales Order creation appears to be  a watershed event in NetBooks: that’s when the system comes alive, integration gets better from here, with information flowing through nicely.  Completing the order creates a shipping document, confirmation of the shipment creates a a billing request, invoice.  Even external services are integrated well, like UPS for Online Shipping and PayCycle for payroll .  There’s a complete “document trail”, you can start from the accounting side, too: from Accounts Payable (invoice) you can trace all actions back to the shipping doc, sales order…etc.

I understand why Dennis with his accounting background considered this system a gem:

As an accountant by training I often make the mistake of taking the number cruncher’s view. On this occasion I don’t have to. The way NetBooks is organized, you enter it according to the role you fulfill. That means you only ever need use the screens that are pertinent to you.

Real-world people record their real-world transactions: manufacturing, physical movement of goods, and the system records the facts in Accounting.  NetBooks  is an accounting system at it’s heart, but one without the need to deal with accounting screens.  This should not come as a surprise, given Founder Ridgley Evers’s own background: he was co-founder at QuickBooks, the de facto standard for small businesses.

Most of the sample data in the NetBooks trial system appear to have come from Evers’s real-life business: Davero Ingredienti, a purveyor of olive oil products, and I think this very well represents the type of small business NetBooks may be ideal for: relatively stable, has a good repeat customer base, receives a  lot of inbound orders and needs to execute on manufacturing and shipping to these customers.  It badly lacks stronger Sales features, and a more flow-oriented thinking to support aggressively growing businesses.

The User Interface is nothing to call home about. You certainly won’t find the lively charts and dashboards seen at Salesforce.com, NetSuite, SugarCRM, Zoho CRM …etc.  But having a simplistic UI is one thing, making it outright boring is another, and hard to use is a capital crime.  In NetBooks you basically navigate through small text lists, then double -click on an item to drill down to more details, wait long (the system, at least the trial one feels very slow) for several overlapping screens to pop up. You have to close or move around some of these pop-ups to see what’s underneath.  And whoever came up with the idea of clicking on those tiny arrows should be banned from web design for life.  

 

Seriously, this isn’t just the lack of rounded-corners-gradient-colors web 2.0 goodness: the poor UI, the microscopic arrows to click on render NetBooks a pain to use. 

Although I’ve been quite critical in this review, I still like the NetBooks concept: give very small businesses an integrated system they previously could not afford. NetBooks starts at $200/month for 5 users, additional users seats are $20.  That’s a fraction of the current “gold standard” in the space, NetSuite – although the step up to NetSuite also brings a wealth of new functionality.  Finally, SAP’s Business ByDesign is worth mentioning: when it becomes widely available, it will be the most function-rich SMB SaaS solution – but their entry point is about where NetBooks’s upper limit is.

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Web 2.0 & Enterprise, Round 3: Enterprise Software for Small Businesses

(Updated)

This post is a continuation of Web 2.0 in the Enterprise – Round 2 in which I reflected on some thoughts brought up by Stephen Bryant in Five Reasons Web 2.0 and Enterprises Don’t Mix.

The Web 2.0 in the Enterprise TIE event I previously referred to was hectic, trying to cover way too many subjects in 90 minutes, with one common underlying assumption: Enterprise means large corporations. The theme of the night was how these Web 2.0 technologies and business/communication approaches will “seep in” to the large enterprise from the bottom up.
What is then Enterprise Software? Typically SAP, Oracle et al come to mind, and I can hear the roar “Enterprise Software is Dead” – well, is it?
If we define Enterprise Software as the traditional heavyweight, expensive, pay-huge-license-fees-upfront, then try-to-implement-forever model it is certainly challenged from two ends, by Open Source and the SaaS model. But there is another definition that is largely being overlooked:
Software that allows a company to conduct it’s everyday business, supporting most of the core, fairly standard business processes any company performs repeatedly.

With this definition, Enterprise Software has a whole new, largely unpenetrated market to enter: that of small businesses, referred to as the SMB or SME segment. Such enterprise functionality has traditionally been beyond reach for a typical small business, for two major reasons:

  • Cost (license, hardware, implementation, maintenance ..etc)
  • Lack of IT resources (integrating applications, designing processes, dealing with multiple vendors ..etc)

SaaS is the right answer for both, since it allows the SMB user to start using the functionality without an upfront investment, does not require implementation, upgrades, maintenance, worrying about backups and security ..etc.

Of course several Open Source packages are available completely free, which is a perfect solution for the cost problem, but I think most of these packages are by geeks for geeks; i.e. you really have to be quite IT-savy to implement, integrate, upgrade them, and as we stated most small businesses simply do not have that type of resource. Yes, that means the Silicon Valley tech-startups are not a true representation of the SMB world
Likewise, I don’t believe SOA, best-of-breed packages working together are an option for the SMB market, for the same reason. They will play an increasingly critical role in larger enterprises with a professional IT organization, but for a few more years SMB’s are far better off with integrated, All-In-One type On-Demand solutions.

Of the Web 2.0 companies Stephen mentions in Five Reasons Web 2.0 and Enterprises Don’t Mix two are offering Integrated On-Demand solutions:

  • NetSuite
    Stephen lists NetSuite along with Salesforce.com, and while they are in the same club, the significant difference is that Salesforce.com is only CRM, while NetSuite offers an integrated CRM+ERP package. They both are trying to become a “platform” via NetFlex and AppExchange, respectively. Both companies are definitely pushing upstream, going after the Enterprise market as in the first definition, i.e. large (or midsize) corporate customers.
  • 24SevenOffice
    Coming from Europe this company is lesser known. They focus on the SMB market and offer a modular but integrated system with a breath of functionality I simply haven’t seen elsewhere: Accounting, CRM (Contacts, Lead Mgt, SFA), ERP (Supply Chain, Orders, Products), Communication, Group Scheduling, HR, Project Management, Publishing, Intranet. Essentially a NetSuite+Communication, Collaboration. I’ve taken their test-drive (currently IE only) and liked it. I would debate how they structure their menu-system, as functions like Product, Inventory, SCM are all hidden under Financials.

Back to the economics: if SMB’s could not in the past afford Enterprise Software, the same held true for the Software Industry: they could not afford SMB’s, since there was just no way to make the numbers work. The cost of customer acquisition vs. the very low license fees made it an uneconomical model, whether via direct or channel sales.
Once again, technology comes to the rescue: the Internet, and largely Search Engine Marketing changes everything. Joe Kraus, Founder of JotSpot and previously Excite sums it up:
“ Ten years ago to reach the market, we had to do expensive distribution deals. We advertised on television and radio and print. We spent a crap-load of money. There’s an old adage in television advertising “I know half my money is wasted. Trouble is, I don’t know what half”. That was us. It’s an obvious statement to say that search engine marketing changes everything. But the real revolution is the ability to affordably reach small markets. You can know what works and what doesn’t. And, search not only allows niche marketing, it’s global popularity allows mass marketing as well (if you can buy enough keywords). “

Another benefit of SEM is that while traditional advertising can pick the right demographic groups, it cannot pick the right time, only a fraction of the target audience is in “change mode”, looking for a solution. That’s the beauty of Search Engine Marketing: obviously if you are searching, you have a problem and are looking for a solution, which is half a win from the vendor’s point of view.
Small Business Trends recently published a survey on “Selling to Small Businesses”, which supports the increasing importance of SEM: “A full 73% of vendors attract small business customers through search engine results”

Finally a quote from Ziff Davis again: “Products for the long tail and SMB market, where 72 million businesses spend $5k or less each year, are a much easier play” Wow, I don’t know where those numbers come from, but if I were a SMB-focused software vendor, I’d certainly like them … there’s a goldmine out there.

Update (2/22): Perfect timing for this report to come out just now: U.S. SMBs to Spend $2.2 Billion on Software in 2006, Says AMI-Partners

Update (4/17): Interprise Suite (recently debuted at Demo 2006) claims to be “The FIRST Accounting / ERP / CRM Solution to Bring the Power of the Internet to Small and Mid-sized Business“. While I take issue withe the claim to be “first”, considering the breadth of functionality it’s definitely an option to consider for SMB’s .

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