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Welcome to the Party, NetSuite

Finally, it begins.

After months of hand-wringing, would-be on-demand software star NetSuite is finally in the process of going public. A Dutch auction of the firm's 6.2 million offered shares began Monday and is expected to fetch between $13 and $16 a share, resulting in at least $77 million in fresh capital after accounting for fees.

But that's a conservative estimate. NetSuite could take in $95 million or more if wide-eyed investors view the company, which aims to duplicate the functionality of an entire enterprise resource planning (ERP) system as an on-demand service, as the next (NYSE: CRM  ) . Or, better still, the next Google (Nasdaq: GOOG  ) , whose public auction at $85 a share in 2004 unleashed one of the great stock stories of the 21st century.

I have my doubts.

That's not a knock on NetSuite, per se. My read of the software is that it's uncommonly good. Good enough, in fact, to be accessible via the Safari browser on Apple's iPhone long before Steve Jobs called for third-party developers to write software for the iconic communicator.

Trouble is, ERP providers such as SAP (NYSE: SAP  ) and Microsoft (Nasdaq: MSFT  ) have vast resources. And one, database deacon Oracle (Nasdaq: ORCL  ) , employs a NetSuite insider. CEO Larry Ellison is NetSuite's majority shareholder, with a 60% stake in the company.

And it's not like on-demand firms outside of have made it big. Neither RightNow Technologies (Nasdaq: RNOW  ) nor newly public SuccessFactors (Nasdaq: SFSF  ) is booking a profit at the moment.

Nor is NetSuite. But is the stock cheap? Nope. With a projected market cap between $773.6 million and $952.2 million, NetSuite investors will be acquiring each dollar of the firm's unprofitable revenue for at least $8.03 and as much as $9.89. The latter is roughly in line with what -- a far bigger and more proven entity -- charges.

Therein lies the danger. NetSuite could be the next But it could also be priced as if it already is.

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