images Eric Savitz in his Seeking Alpha blog post sites the following:

Piper Jaffray’s Mark Murphy today launched coverage of NetSuite (N) with a Sell rating and a $14 price target, well below the current level.

Murphy’s thesis is that customers are not that happy with the on-demand business software provider’s offerings. “We believe the market has yet to include the potential financial consequences of what we believe to be lower customer satisfaction levels than the broader On Demand industry,” he writes. “While we think our estimates are achievable, there is potential downside risk to our long-term cash flow forecasts if customer concerns are not addressed.”

Murphy says his due diligence with customers uncovered a “higher-than-average mix of unsatisfied customers.” He says that the product gets strong technical reviews once it is operational, but that “deployment frustrates many customers due to the over-arching nature of the project.” He also says that checks with the Better Business Bureau find a 13x higher complaint rate for NetSuite than for Salesforce.com (CRM).

Last weekend the company agreed to acquire its competitor, OpenAir, which is specializing in Professional Services Automation (PSA). The OpenAir has over 300 well satisfied subscribers, but they have to integrate their business flows with other applications, such as Financials, etc. on their own. The Netsuite, by contrast, offers fully integrated approach and sees this acquisition as an upsell opportunity to OpenAir customers. I wonder how these customers will react to the NetSuite overtures considering level of their customers satisfaction.