Understanding NetSuite Cost: How Much Does NetSuite Really Cost?

When considering the adoption of any software or technology, it is essential to have a clear understanding of the costs involved. NetSuite, a widely used cloud-based business management software, is no exception. In this blog post, we will explore the various factors that determine the pricing and licensing of NetSuite, providing you with the necessary information to make an informed decision for your business.

Understanding NetSuite Editions and Cost

NetSuite's pricing model is fundamentally built around the concept of a Suite The specific suite your business requires hinges on factors like your company's size and the particular functionalities you need. For example does your business contain multiple legal entities? If so, you would to jump to Mid-Market Edition regardless of the number of employees or users you have..

Exploring NetSuite's Suite Options In the language of NetSuite, these suites are categorized as:

1. NetSuite Starter Edition: Perfectly tailored for smaller businesses with less than 10 users or those with limited requirements. The pricing for the starter edition starts at approximately $1,000 per month.

2. NetSuite Mid-Market Edition: Expertly designed for mid-sized organizations with more than 10 users and/or multiple legal entities. The pricing for the starter edition begins at around $2,500 per month.

3. NetSuite Enterprise Edition: Specifically suited for large enterprises with extensive operational demands. The pricing for the starter edition starts at approximately $5,000 per month.

NetSuite Pricing Breakdown: User Licenses Explained

When configuring your NetSuite solution, one key aspect to consider is the licensing cost for each named user. NetSuite takes a named user approach to licensing, not concurrent.  

NetSuite offers two primary types of user licenses:

1. Full User License: The full user license is the standard license for most NetSuite users, providing complete access to all features within your NetSuite implementation. It is designed for users who require comprehensive interaction with the system across various functionalities. The cost of a NetSuite user license has recently increased from $99 per user per month to $129 per user per month. A full user license is necessary for user roles such as financial controller, sales manager, CFO, and other similar positions.
2. Self-Service License: This license is perfect for users who require basic access to NetSuite, such as time and expense entry or accessing HR policies through an intranet. These licenses are a cost-effective solution as they are sold in batches of five, with the cost of one batch being roughly equivalent to a single full user license. This setup offers a budget-friendly way to grant limited system access to a group of users.

User Limitations and Package Upgrades It's important to note that the editions imposes a cap on the maximum number of user licenses you can purchase. Once this limit is reached, upgrading to the next edition becomes necessary to accommodate additional users. Moreover, many NetSuite base packages inherently include the cost for a certain number of full user licenses. Typically, each package also comes bundled with a 5-pack of self-service user licenses to start.

NetSuite Pricing for Advanced Modules

NetSuite's extensive range of add-on modules is a major advantage, as it provides businesses with the flexibility to cater to their specific needs. These modules can be easily enabled and configured within your NetSuite ERP system at any time during your subscription. However, it's important to keep in mind that removing an add-on module can only be done when you renew your contract.

The cost of most NetSuite Advanced Modules ranges from $499/month to as high as $899/month, with a few exceptions.

Commonly licensed advanced modules include the following:

• NetSuite Advanced Financials
• NetSuite SuiteBilling
• NetSuite Revenue Management
• NetSuite Planning & Budgeting
• NetSuite Multi-Book Accounting
• NetSuite OneWorld
• NetSuite Dunning Letters
• NetSuite Fixed Assets Management
• NetSuite Electronic Bank Payments
• NetSuite Contract Renewals

NetSuite Inventory Management & Order Management Modules

• NetSuite Advanced Inventory Management
• NetSuite Advanced Order Management
• Grid Order Management

NetSuite Commerce Modules (SuiteCommerce)

• NetSuite SuiteCommerce
• NetSuite SuiteCommerce Advanced
• NetSuite SuiteCommerce InStore
• NetSuite SuiteCommerce MyAccount

NetSuite Supply Chain Management Modules

• NetSuite Procurement
• NetSuite Warehouse Management System
• NetSuite Demand Planning
• NetSuite Quality Management
• NetSuite Work in Process (WIP) and Routings
• NetSuite Work Orders and Assemblies
• NetSuite Advanced Manufacturing

NetSuite's Service Tier Costs

Overview of Service Tiers NetSuite has refined its service tier offerings to ensure they closely align with the evolving needs of its customers. This update simplifies the structure and increases the capabilities of each tier, providing a scalable ERP platform suitable for businesses of varying sizes and complexities.

New Tier Structure and Naming Conventions The previous five-tier system (Shared, Tier 3, Tier 2, Tier 1, and Tier 1+) has been streamlined into four tiers: Standard, Premium, Enterprise, and Ultimate. This change not only simplifies the naming convention but also consolidates the tiers to better match customer needs. For instance, the former Tier 3 and Tier 2 have merged into the new Premium tier.

Simplified Calculations for Service Tiers Replacing the business data storage component with a monthly transaction line count, NetSuite has made it easier for businesses to understand and choose the right tier. This count is based on a rolling six-month average, providing flexibility for occasional spikes in transactions without immediately necessitating a tier upgrade.

Increased Capacity in Each Tier NetSuite has significantly increased the limits for file cabinet storage and user count across all tiers. For example:

• The Standard tier now offers 100 GB of file cabinet storage, compared to the previous 10 GB in the Shared tier.
• The Premium tier, which combines the old Tier 3 and Tier 2, allows up to 1,000 users, an increase from the former caps of 150 and 800 users respectively.

Integration and SuiteCloud Licenses The number of SuiteCloud Plus licenses, crucial for managing integrations, has also been adjusted in the new tiers. For instance, the Enterprise tier now allows a maximum of 6 SuiteCloud licenses, up from 5 in the old Tier 1. Notably, the minimum requirement for SuiteCloud licenses has been removed, acknowledging that some organizations might need a higher tier for user count or transaction volume, but not necessarily for integrations.

New Service Tier Capacities and Limits:

• Standard Tier: 100 Users, 100 GB File Storage, 200,000 Monthly Transaction Lines.
• Premium Tier: 1,000 Users, 1,000 GB File Storage, 2,000,000 Monthly Transaction Lines.
• Enterprise Tier: 2,000 Users, 2,000 GB File Storage, 10,000,000 Monthly Transaction Lines.
• Ultimate Tier: 4,000 Users, 4,000 GB File Storage, 50,000,000 Monthly Transaction Lines.

All tiers above Standard now include a sandbox, providing an additional advantage for development and testing.

The Cost of Implementing NetSuite ERP

When it comes to implementing NetSuite, the cost can vary widely depending on the specific needs of each business. Standard implementations, (excluding customizations or integrations), typically range from two to three times the yearly fee of the NetSuite license. This means that businesses can expect to pay anywhere from $25,000 to well over $150,000 for their NetSuite setup.

The total cost of implementing NetSuite is influenced by several factors, often referred to as cost drivers. These cost drivers include:

1. Extensive Analysis in the Discovery Phase: During the initial discovery phase, businesses evaluate their specific needs and plan accordingly. This analysis helps determine the scope of the implementation and contributes to the overall cost.

2. Tailoring Through Customizations: NetSuite is a highly customizable system that can be adapted to fit a business's unique workflows. However, customizations require additional time and effort, which can increase the implementation cost.

3. Development Efforts: In some cases, businesses may require extra programming or setup tasks to meet their specific requirements. These development efforts can add to the overall cost of implementing NetSuite.

4. Integrating with Other Systems: Many businesses already have existing software ecosystems in place. Integrating NetSuite with these systems requires time and expertise, which can impact the implementation cost.

5. Training for Effective Utilization: Equipping staff with the skills to use NetSuite efficiently is crucial for a successful implementation. Training costs should be factored into the overall budget.

Implementing NetSuite requires careful planning, customization, and integration to meet the unique needs of each business. The cost of implementation can vary significantly based on factors such as analysis, customizations, development efforts, system integration, and training. It is important for businesses to carefully consider these cost drivers and budget accordingly to ensure a successful NetSuite implementation.

Illustrative Example of NetSuite Cost

Here's a breakdown of what the costs might look like for a business that's outgrowing QuickBooks and looking for more robust financial and inventory management software for around 15 users.  

NetSuite License and User Costs Example

1. NetSuite Mid-Market Edition Subscription:

   • Monthly Cost: $2,499
   • Annual Cost: $2,499 x 12 = $29,988

2. User License Costs:

   • Number of Users: 15
   • Cost Per User: $129 per month
   • Total Monthly User Cost: 15 x $129 = $1,935
   • Annual User Cost: $1,935 x 12 = $23,220

3. Advanced Inventory Management:

   • Monthly Cost: $499
   • Annual Cost: $499 x 12 = $5,988

Total NetSuite Subscription Cost (Annual):

• Mid-Market Edition + User Licenses + Advanced Inventory = $29,988 + $23,220 + $5,988 = $59,196.

One-Time NetSuite Implementation Cost:

• Total Implementation: $65,000.

Total First Year Cost for NetSuite:

• Subscription Cost + Implementation = $59,196 + $65,000 = $124,196

Contextualizing the Investment for the Business: For a growing wholesale distributor, this investment in NetSuite represents a significant upgrade from QuickBooks and Fishbowl. The Mid-Market Edition and the Advanced Inventory Management module are particularly suited to handle the complexities of a growing distribution business, offering capabilities like real-time inventory tracking, efficient order management, and comprehensive financial reporting.

While the upfront implementation cost is substantial, it's a one-time investment that sets the foundation for more streamlined and efficient operations. Over time, the efficiencies gained from using NetSuite can lead to cost savings, better data-driven decision making, and the ability to scale operations without the need for major system changes.

Navigating NetSuite Costs With Confidence

Understanding the cost of NetSuite is crucial for businesses considering this powerful ERP solution. While it's clear that NetSuite offers a range of benefits—from streamlining operations to providing advanced analytics—the question of investment remains paramount, especially when budgeting and financial planning are at stake.

NetSuite's Value: A Balance of Cost and Benefit NetSuite’s comprehensive features, such as its unified platform, scalability, and robust security, come at a cost. However, this cost is often balanced by the long-term savings and efficiencies gained. Given that NetSuite’s pricing is customized based on specific business needs—including user count, desired modules, and service tiers—getting an exact cost upfront can be challenging.

Tailoring Your Investment with NetSuite Every business is unique, and so are its software needs. This is why a one-size-fits-all approach to pricing rarely works. NetSuite understands this, offering tailored solutions that align with your specific operational requirements and growth objectives.

Discover Your NetSuite Pricing with Our Calculator To help you navigate this complexity and gain a clearer understanding of your potential investment in NetSuite, we offer a specialized NetSuite Pricing Calculator. This tool is designed to provide you with a customized estimate that considers your business size, module requirements, and service tiers.

Further Assistance and Personalized Consultation If you need more detailed information or a personalized consultation, our NetSuite specialists are ready to assist you. They can help interpret your calculator results and discuss how NetSuite can fit within your budget while meeting your business needs.

Final Thoughts Investing in NetSuite is not just about adopting new software; it's about investing in your business's future. With the right information at your fingertips, you can make an informed decision that aligns with your financial plans and strategic goals.

Contact Us for a Personalized Discussion About Your NetSuite Cost Today!