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Company: NetSuite
Started: 1998
Located: San Mateo, California
Geography: Global
Market: Cloud Computing Business Management Suites
Products: NetSuite Accounting/ERP, CRM, eCommerce, NetSuite OneWorld, Suite Cloud Platform and OpenAir PSA
Key Customers: SuccessFactors, Smashbox, Solarwinds, Intuitive Surgical, Isuzu Truck, GestureTek, Virgin Money, Six Apart, Cash Edge, Oakland A’s, Ashi Kasei Group, Cartridge World
Website: NetSuite
Blog: Cloud NetSuite
Twitter: @NetSuite
Recent News:
NetSuite OneWorld Strengthens Links at Wireless Matrix
Independent Survey Finds High Satisfaction Amongst NetSuite Customers
I asked Mini Peiris, NetSuite’s VP of Product Marketing a few questions about their business and her view of the SaaS market as we move into 2010.
Did you start out as a Software-as-a-Service company?
Yes we were founded in 1998 as a SaaS or Cloud-based solution. The company was started Evan Goldberg and Larry Ellison, providing cost-effective business management software for small and medium sized businesses or divisions of large enterprises. We’re now the #1 cloud business management suite, with over 6,600 customers.
Our original focus was on small businesses and over time we have moved up market, . When we started NetSuite, we were based around financial management and we have now developed an entire business management suite across ERP, CRM and Ecommerce. Then in 2008 we launched NetSuite OneWorld for global businesses or their divisions, that are looking for a comprehensive business or financial management suite.
Why do your customers buy from NetSuite?
The value of purchasing NetSuite software is we allow our customers to focus on operating their core business instead of running and maintaining all different types of business management software and infrastructure. Most companies operate a hodge podge of different systems for financials, CRM, support, eCommerce and inventory. This requires substantial initial and ongoing investment, time to manage and resources to upgrade.
Cloud Computing reduces a lot of this IT pain by allowing customers to pay as they go, and eliminating the need to buy, maintain and upgrade expensive hardware, software, and infrastructure. NetSuite offers a fully integrated web-based cloud business management suite, which offers significant business benefits, such as CRM solution that is fully integrated into financials and into inventory, which creates a much more efficient order to cash process. Some of the big benefits include significant ROI because you can do more work with fewer employees and the work is more accurate. Older systems require business analysts who create and maintain sales orders, conduct ad hoc reporting, data management across systems and a lot of re-keying.
Our customers also like that they can centralize their data, centralize their customer data and have a single version of the truth.
NetSuite customers can leverage our standard analytics, run real-time reports, dashboard and fulfillment, without having to try and integrate a hodge podge of information using Excel. All of this all included and completely integrated with our system, so customers don’t have to pay a separate fee.
We typically service companies who have outgrown Intuit’s QuickBooks, struggled with having to maintain Microsoft Great Plains with multiple other business systems, and we’ve even had SAP R/3 customers convert to NetSuite, who have become weighed down by the IT costs, and multi-million dollar upgrade costs.
For example, Asahi Kasei Spandex America moved from SAP R/3 to NetSuite and reduced their IT spend from 3% of revenue to 0.1% of revenue with NetSuite - with NetSuite providing an easier to use, modern, integrated and cost effective completely web based solution. In fact, NetSuite has been shown to be 50%+ more cost effective than traditional on-premise solutions. Our sweet spot in the market is companies with 11-1,000 employees in high tech or software, wholesale/distribution, retail/eCommerce, manufacturing or services verticals, and our solutions are used across the globe.
What do you see as the key trend emerging in the SaaS industry?
A major trend is the enterprise adoption of SaaS. For example, we are seeing significant share of our new business bookings for our NetSuite OneWorld solution, our solution for global companies or divisions of global enterprises.
The increasing media coverage of SaaS and Cloud Computing is definitely a driver, because the significant cost savings and business efficiencies are very attractive to CIOs and they are starting to take a closer look at Cloud-based solutions. Even during the economic downturn, Gartner rated NetSuite for the first time as one of the Top 10 Financial Management Systems vendors in 2008 by market share - and the fastest growing in that Top 10. And IDC recently rated NetSuite one of the Top 10 ERP solutions for sub-1,000 employee organizations .
ERP upgrade cycles are coming up again like they did 3-5 years ago and customers are faced with either upgrading or switching their systems, and NetSuite’s solution provides the ideal solution to slash IT costs, and get off the upgrade treadmill.
Cloud solutions are becoming more highly tailored towards specific industries. NetSuite’s SuiteCloud platform provides the ideal platform for ISV’s to deliver industry specific cloud apps to market. For example, RootStock Software is a NetSuite partner that is building a manufacturing resource planning application on top of the NetSuite platform, because they can take advantage of NetSuite’s native ERP, CRM and eCommerce functionality and their application logic for manufacturers. ISVs can even market and distribute their applications through our marketplace at SuiteApp.com.
Traditional software resellers and solution providers are looking to transform their business models as the traditional on-premise market slows down and buyers become more skittish around large capital outlays. Cloud computing offers the opportunity for resellers to provide truly cost effective and compelling solutions to their customers. This transition is happening worldwide, and NetSuite’s cloud pay as you go solution provides the opportunity for resellers to to build a recurring revenue stream, and better fit with their customers’ needs. With our NetSuite Solution Provider program, partners can leverage NetSuite to make this transition. In fact, we recently announced the NetSuite SP100 Program which enables resellers to get paid 100% of the first-year revenues on new sales of NetSuite.
At our upcoming SuiteCloud2010 event in San Francisco in April, NetSuite partners will be coming together, sharing ideas and best practices and seeing how others have both built natively on top of NetSuite’s platform, as well as integrated with it.
What is your outlook for 2010?
Well, we’re pleased that at NetSuite we just closed out our 2009 fiscal year with record revenues.
In a recent Gartner forecast they are projecting that SaaS ERP/CRM versus traditional ERP/CRM, SaaS will grow at a much stronger growth rate. As Cloud Computing gets more play and enterprises continue to upgrade, this should be good news for us.
Given we are starting a new decade and many could argue that SaaS started in during the last ten years, I thought it would be appropriate to recognize leaders of the SaaS movement. Here are the winners of the Montclair Advisors 2010 SaaS Hall of Fame:
Most Influential SaaS Company: Salesforce.com
Salesforce has have been the most vocal proponents of the SaaS business model for the last 10 years. They are also the largest SaaS Company based on revenues ($990M) and market value ($8.5B).
Most Influential SaaS Individual: Marc Benioff
As the CEO of Salesforce, Marc has been the major evangelist for the past ten years. His recent book Behind the Cloud is a great primer for entrepreneurs who are considering starting their own SaaS Company.
Best Transition to SaaS: Concur (Steve Singh)
Concur was the most visible company to move their business model to Software-as-a-Service from a traditional on-premise model. He moved his company from a low of .90 a share to creating a company with revenues of $250M and a market cap of over $2B.
Biggest SaaS Acquisition: Omniture (Josh James)
Adobe purchased Omniture firm for $1.8B in October 2009.
Largest SaaS IPO: NetSuite (Zach Nelson)
The largest SaaS IPO so far is Netsuite’s public offering in December 2007 for $185M. This event made Larry Ellison quite happy since he owned more than half of the company.
Largest SaaS Deployment: SuccessFactors (Siemens)
In 2009 SuccessFactors announced the largest SaaS applications deployment to date with Siemens where they will deploy their performance management software for more than 400,000 managers and employees.
Biggest SaaS Comeback: Dave Duffield (Workday)
After his company PeopleSoft was acquired by Oracle, Dave Duffield formed one of the most successful pure SaaS companies, Workday, designed to create the next generation of ERP solutions.
Most SaaS Customers: Salesforce.com
Since they are one of the original SaaS companies it is not hard to believe they would have the largest customer base but they are clearly much larger than any other SaaS company with more than 65,000 customers.
Most Influential SaaS Analyst: Bill McNee (Saugatuck Technologies)
Bill, a Gartner Group alumni, has built his firm, Saugatuck Technologies to be exclusively focused on Software-as-a-Service and Cloud Computing for the past ten years.
Most Influential SaaS Journalist: Phil Wainewright
Phil has been a blogger and journalist with many different publications including ZDNet doing a comprehensive job of covering SaaS industry events, companies and trends.
Most Influential SaaS Pundit: Jeff Kaplan (THINKstrategies)
Jeff has been a very visible figure at industry events, associations, publications where he has promoted and commented on SaaS trends and players for the past ten years.
Most Influential Investment Firm: Bessemer Venture Partners
Byron Deeter and his colleague Philippe Botteri published a very popular Top 10 Laws for Being ‘SaaS-y’ as well as having invested in many leading SaaS companies.
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