NetSuite Exec Says Its Rival, SAP, Has Become A 'Hairball' Of Products

SAP acquired Swiss ecommerce firm Hybris last week to expand its presence in a market some analysts believe is worth as much as $37 billion.

The amount of the deal wasn't disclosed, but a source told Quentin Hardy of The New York Times it was "somewhat less than $1 billion."

Craig Sulivan, senior VP of international products at NetSuite, wasn't impressed.

On Thursday, he told Shaun Nichols and Dan Worth of V3.co.uk the Hybris deal was just another attempt from SAP to buy its way into a market it knows little about.

"They know they are ill-equipped to make a meaningful impact in the cloud market," Sullivan said of SAP. "They’ve resorted to their standard practice when they don’t know what to do: make an acquisition to plug a gap rather than supplement a core strategy."

Sullivan didn't stop there: He said SAP is "running scared" and predicted it would have a tough time integrating Hybris' apps and service into its own complex "hairball" of products.

An SAP spokesperson declined to comment on Sullivan's remarks. But he did note that SAP has more than 29 million cloud users and a cloud business with a run-rate of almost $1.2 billion. NetSuite is expecting revenue of about $400 million for its fiscal year, which ends Dec. 31.

NetSuite's core product is called ERP (enterprise resource planning), and companies use it to manage different parts of their business. SAP is NetSuite's biggest competitor in this space.

NetSuite has been a cloud company from the get-go. SAP, which was slow to move to the cloud, last year spent spent nearly $8 billion to buy SuccessFactors (cloud-based HR apps) and Ariba (online marketplace for businesses that sell to businesses).

NetSuite has been branching out into new businesses, and ecommerce is one of them, so it's not going to let SAP tread onto its turf without some trash talking.

But with its Hybris deal, SAP seems more focused on Salesforce.

Earlier this week in a call to announce the Hybris deal, both of SAP's co-CEOs took veiled shots at Salesforce's $2.5 billion acquisition of ExactTarget, which makes tech for email and marketing campaign.

They seem to think Salesforce's customer relationship management services, which companies use to keep track of their dealings with clients, are too focused on email marketing.

SAP's Hybris buy, on the other hand, is all about "defining the next-generation CRM. And it's not about email, I can assure you," SAP co-CEO Jim Hagemann Snabe said in the call.

SAP co-CEO Bill McDermott said most CEOs don't care about "sending out email blasts and go in some hit rate on emails, especially since we will delete it anyway."