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NETSUITE OFFERS UP ALTERNATE MARGIN PLAN

Craig WestGet your money now or later? That's probably the best way to explain NetSuite's announcement of a new margin plan. I'm not sure it's quite as earth-shaking as the company is representing. But it's probably good in offering resellers a different way of getting their money. Currently, NetSuite VARs get 50 percent of the money on a the sale and implementation in the deal's first year and then receive 30 percent of the value of the contract annually as long as the customer stays on the system.
The new plan gives them 100 percent of the value the first year, but only 10 percent annually thereafter. "It’s become clear to us that traditional midmarket VAR community is struggling with how to embrace the cloud-based solution," said Craig West, the company's VP of channel sales. Resellers can pick the older margin plan or the new one on a customer-by-customer basis, but once that's chosen, it's locked in for the life of the customer. The margin calculations also don't include support or professional services purchased from NetSuite. West said the 100/10 plan becomes more expensive about the third or fourth renewal. The 100/10 plan is being offered for a limited time, although the limits haven't been defined. Also, NetSuite isn't letting everybody in the door. West said the company would be selective, choosing VARs that have experience in mid-market financial systems. At the Morgan Stanley Technology, Media & Telecom Conference this week, NetSuite CEO Zach Nelson described the new program to attendees. He described the outcome this way: "We have aggressively courted the traditional midmarket resellers. That will be an army of sales people and an army of implementers."
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