I first met our solution provider, Ray Tetlow, the founder of Skyytek, on the Oracle Small Business (OSB from now on) user forum. At the time we were struggling with version 7 of OSB. It was really incomplete and badly tested software. Not only was it painfully slow, but also a lot of the features on which we based our purchasing decision just did not work.

However, to be fair to OSB, we had a crappy QuickBooks conversion (which OSB, not Skyytek, did for us), and we were trying to customize the software to meet our messed-up business processes before we had it implemented. Honestly, we thought we were smarter than we really were and could do it on our own.

That is where Ray Tetlow entered the picture. Personable dude, professional, good salesperson. I liked him immediately. He took a look at what we were doing, commiserated with me on the sad state of OSB affairs, and told me the first thing I had to do was STOP trying to match the application to our messed-up business processes. OSB has a decent workflow -- learn and embrace that, and then make changes if needed. You might learn something about how your business actually works as opposed to how you think it works. He was right -- same thing I tell my customers now.

We engaged Skyytek, and in about 45 days we had a decent implementation of OSB. It was not perfect by any means, but at least the bleeding had stopped and "everything will be fixed in version 8." I have two funny OSB sayings from those days. One was, "Working with OSB is like having someone pounding on your big toe with a framing hammer. You are just happy when they stop." And my favorite: "Working with OSB is like being married to an underwear model who does not like sex. It has its advantages, but can be very frustrating."

I could go on and on about all the OSB product-related crap, but Ray kept us in line, and when it became time to renew, we switched from a direct OSB account to a Skyytek account. I met Ray a couple of times at various events, we hung out, and I considered him sort of a friend. I was a reference account for Skyytek and NetLeger, as it was now called (NL from now on) on a number of deals.

About six months before the end of our current NetSuite licenses were to expire, we started to negotiate a new three-year deal with Ray. The way NetSuite, as [OSB} was now called (NS from now on), parsed out the bits and pieces, the software that we were used to using was now going to cost three times as much, because now we needed the super-premium tier, or something like that. In any case, the price for 26 seats with all discounts was $125,290.44. WAY more than our previous expense for the system, but we were on a roll and did not want to mess around with our business process with a switch to a new system.

We agreed to the estimate contingent on our ability to lease the software. In fact, the estimate names the leasing company as the "Bill To." We were approved for the lease with the requirement that I personally sign for the lease. That was not acceptable to me, so I told my friend Ray that we would need some more time to find our own lease, as we did not have 125K in cash at the moment. That is when the pressure started.

The first thing that happened was that our reseller called and said if we did not close this deal "today," or something like that, then we would lose all of our discounts. I was pressured to take the lease terms as they were. I said we could get our own financing -- just give us a week.

A week later, we ran out of e-mails through the NS system -- we get something like 60,000 per year. We contacted our NS reseller and received an estimate back for an additional 60,000 e-mails for $2,388. That works out to almost four cents an e-mail. I am not sure how much it costs to send an e-mail, but at four cents per, that has to be the most profitable business in the world.

It became obvious that we were dealing with a bunch of greedy @%$holes. This also goes to show you what lock-in will do to your pricing structure. You take ethics and customer service out of the picture, and they can they can charge anything they want.

Then the real pressure started. On November 9, 2006, I received an e-mail stating that if our account were not brought current, they would lock us out of our account AND send us to collections. Keep in mind that the balance due was the estimate for the lease; no invoice had been issued or order placed, AND we still had five months on our current license that was PAID IN FULL. They actually used locking us out of our paid system as a negotiating tactic. Also keep in mind that locking us out would have put my 40-person software company out of business.

[On the November 9 e-mail,] the date of the contingent estimate was October 31. Although I cannot prove anything, to me this looks like a well-thought-out strategy between Skyytek and NetSuite. What kind of company starts this type of aggressive collection process on a longtime customer/reference account with a PAID IN FULL account after nine days?

We received a bunch of final-payment notices threatening to cut off our service, and this issue was not resolved until we started contacting the NetSuite CEO on this matter. They finally canceled the "order" on January 29, 2007. As they were prepping for an IPO, it makes sense to keep in on the books for the previous year. I wonder how many other estimates they had on the books in 2006 that they called "orders"?

During all this drama, we decided to switch to another accounting/CRM/SFA system. We contracted with Silicon Digital Systems to move our data from NS to this new system. Data migration is always a complex process, and SDI has a system where they write scripts that pull the data from one system into their database and then port over to the new system. They do it this way so we can check and test the system and then do a final data pull once everything looks good. I think it cost around $35K for this service.

SDI seemed to have enough experience, and I thought this would go somewhat smoothly. NOT.

According to NS, you own the data, but they own the access to it. Since your data is shared with many other companies, you do not get direct access to the database -- you have to go through their Web service interface. Apparently this changes all the time, so a script that works one day may not work another.

It was taking so long we had to renew our agreement that was to expire in March 2007 for another six months. Sometime around August, it was clear that SDI was not going to be able to perform on its contract to convert our data, and it would end up in court. After numerous threats, the president of SDI left this somewhat frantic voice mail explaining that NS was deliberately blocking access to our data as a punitive action for us trying to leave the system.

Pretty bold statement, but I would not be surprised if it were true. Once again, I wrote to the NS CEO and explained that I don't know what the truth is, but this is going to end up in court, and it would be best for all parties if we could just get our data and move on. He denied everything, but somehow we had clear access to our data the next day or so, and SDI could do their job. I think we got a full extraction the first of September.

Anyway, that is the long, sad story. I have all the supporting e-mails and documentation for any skeptics out there. In any case, I will never work with another SaaS vendor that does not guarantee to give us a full copy of ALL our data in a real relational database at any time. With the NS UI, all you can get is customer information in a .csv file. You have NO access to any relational or transactional data. If you want that, you have to use their Web service interface, and then at their speed or connection quality. Once you get on NS, it is almost impossible to leave. They own you, and they know it.

So this is what we learned:

1. If you are going to go the SaaS route, make sure you have full relational export access to your data, including all transactions and attachments. This should be a menu option, not something a programmer has to write a script for.

2. Find out the pricing of all the options up front, and get a fixed price for all options as long as you are a customer. If you don't, you will end up paying four cents an e-mail and thousands for extra storage.

3. Actually, negotiating price with a company like NS is pointless. There are stories out there of companies getting a 75 percent discount on the first year, spending a lot of time and money to implement, and then when they can't easily switch, the "new" pricing comes out at x00 percent of the old pricing.

4. When you negotiate a renewal with an SaaS vendor, keep in mind that they have you over a barrel and they know it. Expect to pay somewhere close to list price for renewals. Factor that in the overall cost.

5. Not all SaaS is the same. SaaS stands for "software as a service," like your cable company. Some vendors charge you a monthly fee based on the number of users that month. If it does not work out, you can easily leave. Other vendors like NS charge you for the full contract up front; it is not really a service at that point.

6. Watch out for the big fees up front for the "first seat" and complex pricing models. NS has a very complicated model where you buy the first seat for some large fee, and then the rest of the seats are sort of reasonable prices. Both Salesforce and Zoho CRM have a much simpler pricing model.

I have heard many anecdotal stories about the NS product, executive team and business practices, but just wanted to present the facts in this case. [You can see the actual e-mails and estimates on the D-Tools Blog, .]

Until now, I tried to just stick with just the facts as to why we left NetSuite. I read this post a number of times, and others here familiar with the story agreed that it was clear and factual. However, I heard from our (ex) NetSuite reseller Ray Tetlow of Skyytek, and he had a different version of the events that transpired. I told him numerous times that he was free to post any comments on the D-Tools blog or create his own blog. He declined because he was going to "take the moral high ground." I am not sure what that means in this case.

So I decided to revisit the issue to make sure I covered everything as accurately as possible and did not try and spin this any one way or the other.

We did not leave NetSuite because the software sucked. The software sucked hard back in the version 7, 8 and 9 days, but the current version we were on was OK. I am not aware of any other single vendor software company that can recreate the NetSuite lead-to-cash process. Maybe the individual parts are not as good as the competition, but having everything integrated into one system has a lot of value. Based on my extensive research, to try and recreate NetSuite functionality in a product like was going to take four separate vendors.

We did not leave NetSuite because of the price. Yes, it is expensive; the price always goes up; the product levels, packages and options constantly change; extra e-mails cost four cents each; and they brutally shifted their focus from an online QuickBooks competitor to the small end of SMB to an SAP competitor during our time with them. So yea, if you are going to compete with SAP, your price structure is going to look similar, but remember, we bought into this when it was Oracle SMALL BUSINESS not SAP lite.

Also, we are not stupid here. Switching costs are huge with any platform change, especially so with a platform like NS that does not give you easy access to all of your data. We knew it was going to be very expensive to switch. Just the hard costs of the new software platform and data-conversion costs were close to $80K. I figure the total hard and soft costs of the switch were around $200K.

The reason we left NetSuite was their business practices. I do not think I can explain it any clearer. We had a dispute over what contingent means, and as a negotiating tactic they threatened to cancel our paid-in-full account that was not set to expire for five months. I was actively securing financing for this deal with our bank when we got the first collection letter nine days after the estimate.

The only thing I can add to the story is that Ray Tetlow, the founder of Skyytek, claims he had nothing to do with the NetSuite business and collection practices, and it was out of his hands. I do not know what the truth is in this matter. What I do know is that in a face-to-face conversation with another NetSuite reseller in the fall, I was told that the reseller controls the deal.

So now I am curious. I assumed that Ray Tetlow was telling the truth, but why would another reseller make any kind of contrary statement?

I am hoping that someone with more clout than me can get to the bottom of this. Is there anyone from NetSuite that would like to make a public comment on their collection processes and reseller agreements? Maybe someone from the press could ask these hard questions.

About the author: Adam Stone writes for the D-Tools Blog, , which represents the voice of people who sell, develop and support D-Tools software products.

The preceding is a blog post that solely reflects the opinion of the author.