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In this article, we're going to dive into NetSuite license pricing. If you're in the market for an ERP system and are considering NetSuite, this post will walk you through the pricing structure, share some tips for securing the best deal, and point out common traps to avoid.
First off, let's address the elephant in the room—NetSuite is not cheap. If you're currently using QuickBooks or even Excel, be prepared for a significant price jump when moving to NetSuite. This isn’t a minor increase; we're talking about a substantial financial investment. While I won’t be delving into specific prices in this post, keep in mind that NetSuite is a top-tier software solution. It brings a lot to the table, but switching to it is a major leap in cost. It’s firmly in the small-to-mid-market software category, which comes with its own price tag.
Please note, this post doesn’t cover implementation costs or other related expenses. That's a topic for another post. Just remember, beyond the license cost, there’s a whole other layer of expenses involved in getting the system up and running.
I like to use an analogy to simplify how NetSuite pricing works. Imagine walking into a McDonald’s and ordering from the menu. McDonald’s menus are fairly straightforward, but NetSuite operates with over 100 different SKUs (product codes), each offering various add-ons, licenses, or specific features. Some of these are bundles, which combine core NetSuite functionality with additional modules.
Some of the most common core SKUs include:
While these categories cover a large portion of NetSuite’s clients, there are many more available.
When you purchase a core SKU, it comes with several features. Think of it like ordering a Happy Meal—it includes the burger, fries, and drink, plus maybe a toy. However, just like you might not want the toy, there may be features in your chosen SKU that don’t add value for your business.
Many people consider buying individual SKUs to save money, but NetSuite’s pricing model doesn’t work that way. Buying individual features can often cost the same—or even more—than purchasing a full bundle. It’s typically best to buy a core SKU that aligns with your needs and then add specific features as necessary.
An important aspect of NetSuite pricing is the tier system. Each SKU comes in three tiers:
These tiers also determine the range of features available. It’s crucial to choose the tier that best matches your needs, whether that means focusing on the number of users or the specific functionality each tier offers.
NetSuite licenses are sold in increments of one year or longer (e.g., two, three, or five years). It’s important to note that the license term begins as soon as you sign the contract—not when you go live with the system. If your implementation takes longer, you could end up paying for software you’re not yet using.
NetSuite offers plenty of room for negotiation, and discounts are very possible. Don’t be afraid to push for a better deal! It’s not uncommon to secure discounts of 20 to 30 percent—or even more—on your NetSuite package. Sometimes the sales reps will be upfront about available discounts, but in many cases, you’ll need to ask.
While you can purchase NetSuite directly from Oracle, you also have the option of buying through a partner, such as a solution provider. These are consulting agencies that sell NetSuite licenses, handle implementation, and provide ongoing support. They are incentivized differently than NetSuite’s own sales reps and can often offer better pricing, personalized service, and increased accountability.
NetSuite’s fiscal year ends on May 31st, and sales reps are highly motivated to close deals during this period. If you time your purchase for Q4—especially close to May 31st—you might be able to secure a larger discount, potentially as high as 40 percent or more.
Be cautious about short-term contracts. While NetSuite may push you toward a one-year contract, this can lead to significant renewal price increases—sometimes as much as 15 to 20 percent. Opting for longer contracts (three to five years) offers greater pricing stability and can lock in your initial discounts.
Negotiate contract terms like a renewal cap and a price lock. This is arguably the most important and under-utilized tip in this article. A renewal cap limits how much your price can increase annually, typically to 4 or 5 percent instead of getting hit with a 15% price bump after your first year. A price lock ensures that any additional features you purchase later will maintain your original discount rate, preventing you from paying full price later.
While NetSuite is a comprehensive system, some modules—such as SuitePeople or the marketing module—are not its strong points. If you need advanced functionality in areas where NetSuite falls short, consider integrating third-party tools instead of relying solely on NetSuite’s offerings.
Work with a NetSuite partner if possible, negotiate hard for discounts and renewal caps, and be mindful of the features you really need. NetSuite’s pricing can be complex, but with these tips, you’ll be better equipped to make an informed decision and avoid common pitfalls.
I hope you found this blog helpful! Let me know if there’s a specific topic you'd like me to cover next. Thanks for reading, and I’ll see you next time!