Lessee...Roxio CD Creator 8.0, Norton Internet Security 2006, Logitech V400 Notebook Mouse and Oh Just Throw In Netsuite CRM+ And Maybe That ERP Thingy
I was reading Denis Pombriant's blog t'other day and came across his thinking on the NetSuite - CompUSA deal. which, to sum up in a word, he called "shrewd." I not only think he's right, but that he might even be underestimating it. While probably not in the realm of a "disruptive innovation," the term that Clayton Christensen, author of "The Innovators Dilemma" and "The Innovator's Solution", two of the more important books that don't appear on the left side of this blog and should, used to identify those technologies that overturn the existing market technologies, I would classify it as a "very very smart (and creative) move" and certainly is the first of its kind.
When I first heard it, I thought, how in the world.....? Certainly, software has been sold in retail outlets forever from Quickbooks to ACT to Elder Scrolls IV: Oblivion. But how do you sell service on a retail shelf? Do you create a NetSuite box with a picture of a hot woman smiling pointing to a dashboard and leave it empty and give it shelf space? Its not like selling Norton Internet Security 2006 or something which is software that has a subscription attached. You can't really sell the browser - I mean you can, but Microsoft or Mozilla might get mad. So what are you providing at retail? Air?
Then I found out the deal. NetSuite, a former client, didn't brief me on this (though I think they tried and I didn't pick up the signal being oblivious to things like this), which was oddly depressing in an "I don't get depressed actually by not getting industry briefing" sort of way. So I'm relying on secondary sources and their press release to get this info. But I have to admit, I really admire this one. Its a great experiment with a certain amount of real risk attached AND a smidgen of panache, They are taking a chance with something that could be fabulous for them - or slap them right in the face - real hard. I think it will succeed and probably has salesforce.com and Right Now chomping at the bit at the moment. Though, of course there's no reason those guys can't do it too. Best Buy is still showng off its six pack abs - though some flab is appearing. But the appeal isn't gone yet and no one locked them up as far as I know
The Deal
So here's the deal.
- NetSuite and CompUSA will roll out at 10 stores in Connecticut & NY July 27 with a pilot.
- All of CompUSA's 1100 SMB sales reps will be able to sell NetSuite tout de suite. That's "immediately" for those of you who are just not as erudite as I is. You're just so crudite.
- Post-trial (after Connecticut and NY closing arguments), the deal will be done at all 220 CompUSA stores that have business centers, which will highlight and demo NetSuite in the stores.
NetSuite business partners - a network they have been aggressively expanding over the last few months, don't suffer here either. The partners will both get residual money from the sale of NetSuite at CompUSA and typically will be the solution providers for the CompUSA-purchased "implementation." So this seems to be a win-win for all involved.
What makes this particularly shrewd is that NetSuite just extended its sales team by 1100 members making it easily the largest in the on demand world. Granted, this sales team won't only be selling NetSuite products but who cares about that? They WILL be selling NetSuite products, where they weren't before and NetSuite comes up smelling really good here.
My only question is a little nitpicky I think and in the grander scheme of things, not critical.
When I attended the launch of their groundbreaking version 11.0 (AJAX enabled) which I wrote about here, I thought they made it clear that their strategy was to go after the upper end of the midmarket - which, as far as I can tell, is hardly the people and businesses that would use CompUSA for their IT needs. But that said, who am I to say that? I don't know that. I'm just speculating. I'm not Nostradamus except in my approach to generalities and forecasting, so I don't know - maybe $500 million companies do use CompUSA - but imagine the size of the shopping cart. "That'll be 2100 copies of Norton Internet Security, 1450 copies of MS Office, and a copy of Halo 2 for the Xbox 360." Its not a big deal, but I'm assuming the focus of this deal (as I've read) is on small and mid-sized businesses (I presume the smaller end), which is not what they said. But that is only a curious fact. Frankly, if I was faced with an opportunity like this, I'd do exactly what they did. Make it happen. That means that they are doing something that is as Denis said, shrewd and I think of breakthrough potential for their market share.
I'll tell ya. While there is some risk here - simply because its never been done before, it is also a great move - because its never been done before. Thinkin' big, NetSuite. Very shrewd, very cool. I'm definitely gonna be watching.
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