Net Gain for SaaS Buyers: New Partnership Promises Sustained Integrations

The news that Ultimate Software and NetSuite have established a formal strategic partnership to deeply integrate their applications as well as refer each other  to customers and prospects looking for joint enterprise resource planning (ERP) and human capital management (HCM) solutions looks like a win for enterprise clients as well as the enterprise software marketplace.

While the deal struck some as a defensive response to the growth of Workday, which has expanded from human capital to include financial & accounting functionality, HfS sees it as a  move to respond to enterprises that are struggling to create and sustain integrations on Workday as well as SAP and Oracle cloud solutions.

Cloud software providers ferociously debate two different development approaches: those that allow for customizations or those that only offer configuration and select application programming interface (API) integrations. In the latter, any needed functionality or data fields are added to an update request list for consideration as a platform-wide addition at some point in the future. Proponents of this “pure” cloud approach argue it ensures consistency and stability of their platforms as well as the ability to support and sustain their own chosen integrations.

The reality is that no one single software can nor ever will be the only application that an enterprise can use to run operations, given constant external market and internal company change and innovation. A commitment by Ultimate and NetSuite executives to maintain all existing and future integrations including customizations at no cost to customers is a big win for the marketplace.

NetSuite had aspired to be the end-to-end platform to run mid-size businesses in the cloud initially but quickly identified the need to customize and integrate with others. It ended up developing the SuiteCloud platform to be able to enable and sustain those customizations and integrations over time. For its part, Ultimate uses Informatica to do its integrations for clients and has developed the UCloud platform to allow more flexibility and reliability to its customers alongside on-going UltiPro solution innovations.

Of note, recent HfS Blueprint primary research interviews with Workday customers revealed that Workday itself supports a limited number of integrations with solutions such as benefits providers.  Any custom requests beyond that must be done by certified consultants working for Workday or a limited number of preferred partners. Customers themselves currently cannot be certified to do these integrations and are not even allowed that level of technical access to their Workday tenancies.

With the news of their partnership and commitment, Ultimate and NetSuite are offering enterprise customers more operational capabilities but also more value by establishing and maintaining these complex and in many cases differentiating integrations. The two solutions will exchange data such as employee records, general ledgers, time, expenses, commissions, and point of sale information to eventually provide even further value to enterprises trying to assess true business and workforce performance and productivity.

HfS will wait to see proof points of the partnership including public client wins before declaring this a success, but this move does address a real need that clients are identifying in the broader SaaS marketplace today.