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On July 21st, 2009, NetSuite announced its intention to acquire Project Based Solutions (PBS) ^[2] rival Quick Arrow for $20M.   A few quick facts about the acquisition

• Existing customers will continue to be supported. NetSuite has committed to supporting the QuickArrow solution.  Customers have the option to move to NetSuite and OpenAir.  NetSuite will not force customers to migrate from Apache.  NetSuite will maintain QuickArrow’s Austin, TX based offices and staff.
  POV: QuickArrow customers should explore the opportunity to align their ERP with NetSuite to take advantage of future synergies and integration points.  Standalone QuickArrow customers should wait for the combined future product road map before evaluating any options.   Expect NetSuite to keep its promise as it would make no sense to acquire a company and not retain the customer base.  NetSuite’s acquisition mitigates financial viability concerns with QuickArrow.
• Acquisition signals commitment to services industry business. As with the $26M OpenAir acquisition ^[3], the addition of QuickArrow will extend NetSuite’s support of professional services verticals such as business and IT consulting, legal, accounting, and government contracting.  NetSuite’s services resource planning (SRP) capabilities include investments in key processes such as marketing, sales, quotes/orders, projects, services delivery, charges, invoices, and revenue and finances.
  POV: QuickArrow adds another 35,000 users bringing the estimated total number of subscribers to about 80,000.  This significant market presence in North America gives NetSuite the opportunity to create not only economies of scale in product development, but also additional capabilities such as international expansion, third party project tool integration, and regulatory compliance support.

The bottom line – NetSuite signals its intent to go on the offense for the services industry business

Project based solutions delivered in SaaS provide rapid benefits and allow vendors such as NetSuite to go on the offensive into the install bases of larger competitors such as SAP and Oracle.  Case in point, NetSuite’s two acquisitions in the PBS space ^[4] removes key competitors and provides it with 1000 customers in a growing market centered around project based businesses.  QuickArrow brings key customers such as Symantec, Genesys, Thomson Reuters, Informatica, and SalesForce.com.   Given NetSuite’s track record, one may expect the ERP SaaS leader to continue to make acquisitions to round out its capabilities in Project Based Solutions ^[2].  Expect other SaaS competitors and on-premise giants ^[5] to follow suit as this market heats up and SaaS becomes a preferred delivery option.