NetSuite – Sales Success, Keeping the Ecosystem Happy and a Hint of Future Moves

I’m in Sydney en route to a CloudCamp in Canberra and taking in a day of the inaugural NetSuite APAC SuiteCloud event. Over lunch with NetSuite CEO Zach Nelson, APAC MD Chris Schafer and a bunch of customers and channel partners, I got to talk to people about some interesting issues – both relating to NetSuite and more generally cloud apps. I also got an inkling of some exciting stuff – I’ll leave that part for last.

Firstly the success NetSuite has been seeing in this region. It’s pretty interesting that, despite the financial crisis, NetSuite has grown 83% in ANZ, this at the same time as SAP is seeing a decline in its growth rate. This is also backed up by a strong increase in channel partner numbers (in this region NetSuite is rapidly moving from a direct to an indirect sales approach). I questioned Schafer as to whether SAP’s ByDesign product was a competitor in this market, Schafer was quick to laugh ByDesign off pointing out that on their own website SAP pitches ByD as a product for those who don’t want any sort of customization – this in direct contrast to NetSuite who are actively pushing the customization breadth that their application brings.

I spent some time questioning Zach Nelson about the developer ecosystem. He’d given the example of a fixed assets module that OnlineOne had built on top of the NetSuite platform. I asked OnlineOne if they felt threatened that NetSuite would eat their lunch and in a move similar to that Twitter pulled on its ecosystem, mimic the functionality natively within the application. Both Nelson and OnlineOne where quick to state that they rely on open dialogue and that NetSuite development managers indicate pretty clearly where their priorities lie – therefore avoiding any surprises for the developer partners. OnlineOne were also keen to point out that their fixed assets module is now sold into a global marketplace, something they couldn’t have achieved on their own – there’s value in being tied to the big guys!

Now moving on to the exciting stuff. I questioned Nelson about the concerns customers have about US domiciled data – the Patriot Act, foreign Government’s’ data sovereignty requirements and network latency conspire to make this a problem area. Nelson did point out that they have the ability to store particular types of information onshore – in this case you might have, for example, sensitive contact information stored locally with other data in the NetSuite datacenters. Nelson did indicate that NetSuite will continue with it’s current level of building out a datacenter every 18 months or so – when questioned whether Europe would be the next location, he declined to comment beyond pointing out that APAC is NetSuite’s fastest growing region – this and some comments he made regarding concerns customers have about Singapore based datacenters could lead one to suggest that either an Australian, a Philippines or a Malaysian based datacenter may be on the cards.

Lastly, and perhaps most excitingly, I had a discussion with Chris Schafer about NetSuite’s approach towards the social web. I pointed out that other vendors, most notably salesforce with chatter, had taken the social horse by the reigns and were moving fast in this area. I suggested that NetSuite needed to play catch up fats. Schafer wouldn’t confirm anything but did agree saying that “a social play makes perfect sense” (all the while with a wry grin on his face). We then discussed whether a build or buy approach works best – Schafer pointed out that NetSuite much prefers products that re built on its own platform, this and some obtuse comments made about NetSuite developers thinking hard about the problem lead me to conclude that NetSuite will be launching a social offering as part of its core functionality, in the near future.

All in all it was an interesting couple of hours. NetSuite is having great success in this region, are gaining partners and customers rapidly and are thinking about the big problems in the space. Meanwhile the incumbent vendors are grappling with the problems of moving customers from on-premise to the cloud, all the while not crucifying their channel partners – I know whose shows I’d rather be in!

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SuiteCloud 2010 Here I Come

This week sees me stateside for a whirlwind four day trip. I’m here to participate in SuiteCloud, NetSuite’s annual partner conference (disclosure – NetSuite covered my expenses in attending this event). I’m really looking forward to spending some facetime with some people I have much to talk about with. In particular I’ll be having sessions with Zach Nelson and Evan Goldberg , CEO and CTO respectively. With them I really want to talk about their apparent moves over the past six months or so to move NetSuite up the food chain, gradually building out the functionality, partnerships and processes that sees them become a viable option for larger and larger businesses.

In something of special interest to me, I’ll also be meeting with APAC Managing Director Chris Schaeffer. APAC is a surprisingly large growth area for Cloud Computing and I’m looking forward to talking with Schaeffer about the reasons for this and the difficulties trying to sell into a market that is both geographically spread out but also one which has a huge number of different languages and cultures.

I’ll also be speaking with NetSuite customers – their perspective and stories are, after all, more valid than any marketing spin from within the company can ever be – I’ll be running interviews where possible to tell some customer stories after the event.

Lastly I’ll be attending the NetSuite awards – while these functions can have the tendency of being lovefests with a preponderance of tuxedos and champagne (for reference, I don’t own a tux and don’t drink champagne), NetSuites attempts over the past 12 month to build a large and robust partner channel will mean that these awards will be really interesting to watch.

And Who Said SaaS Wasn’t Customizable? – NetSuite Rewrites the Rules and Embraces Design Thinking in the process

I spend a lot of time talking to organizations about moving to SaaS an often I hear their concerns around the apparent lack of flexibility that SaaS apps give them. In the broader context this argument speaks to the points raised by Dennis Howlett in his recent post about design thinking as it relates to enterprise software design. First a little background – in a former life I consulted as a design strategist, broadly speaking helping organizations in myriad sectors to rethink their products, processes and people to achieve what I always referred to as Design (capitalization intentional) something I articulated as the creation of a product or service that embodies design across all parts of it’s creation – a simplistic and much-used example would be the iPod that embodies many design aspects (hardware/product, software, service delivery, distribution and, essentially, the emotional design aspects).

Anyhow, what does this have to do with NetSuite’s latest release. Well NetSuite (see disclosure) is announcing this morning functionality that begins to move ERP software from an analytical and process driven experience to a design-led experience. What they’re beginning to create is the ability for software to mold to an individual user’s and organization’s personal paradigm. That’s a lofty ideal, and it’s early days, but looking deeply into the release gives me some confidence in taking this stance.

SuiteFlow is essentially a move to a flexible platform, in this case embodied in a graphical tool that allows for custom drag and drop customization for ERP. Users can create and alter custom workflows to support the way they and businesses need to work in real-time—whether the goal is to implement a more efficient automated collections process, create a rules-based lead nurturing process or overhaul receivables management. In a punch that sees NetSuite respond to the fears raised by on-premise vendors about lack of customization for SaaS apps, and to position themselves as a vendor enabling design-led thinking, NetSuite is taking the fight to the legacy players saying:

Businesses today face numerous challenges when trying to customize traditional on-premise applications to meet their specific process needs. Legacy software requires costly technical expertise and ongoing maintenance to design, implement and manage complex custom processes. The business users who know the most about the processes are frequently disconnected from the technical design phase and are powerless to make the real-world improvements necessary to accurately replicate workflow. The result work is often dated by the time of rollout because business dynamics have changed, and worse yet, the customizations can result in trapping the enterprise into a particular software version which cannot be upgraded. This old-world approach to business process management (BPM) is both costly and inefficient.

Which is a pretty strong argument – while on-premise software CAN be customized, if that customization is difficult and slow, and if it requires costly technical help to implement, it is, in-effect, useless. NetSuite and other SaaS vendors are bring simple customization to end users and in doing so driving quick and accessible gains in a rapidly changing business environment.

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There’s more to this than meets the eye but first a look at what functionality SuiteFlow brings. Users can:

  • Create workflows that automate business processes across finance, marketing, sales and service
  • Adjust business processes based on the needs of the business or organizational change
  • Deploy workflows that move an organization from manual paper and email-based collections processes to automated cash management
  • Utilize workflows that improve conversion rates by intelligently and automatically nurturing leads
  • Eliminate maverick activity such as rogue sales discounting by implementing auditable approval processes.
  • Improve performance with dashboards that provide clear visibility into process performance, bottlenecks, and improvement opportunities.

But what is even more exciting than the end user benefit that SuiteFlow can bring is what it can mean for specific verticals. I’ve written in the past about the need for SaaS vendors or the resellers that partner with them to provide customized applications that are tailored to distinct verticals. I recently wrote a post about Google’s moves to automate some of the services that the resellers provide and questioned whether or not this was a threat to those resellers. The general response was that it in fact provides an opportunity for resellers to provide added value services on top of the applications – so to does SuiteFlow, and the broader NetSuite SuiteCloud ecosystem provide opportunities for resellers to build highly customized and differentiated applications tailored to specific verticals – all the more so for NetSuite given the breadth of touch points within a business that they provide solutions for. As NetSuite say in their release:

In addition to providing enterprises with greater utilization of resources and shorter time-to-value, SuiteFlow also helps developers and independent software vendors (ISVs) get to market faster with their vertical applications built on the SuiteCloud platform.   ISVs already appreciate the point-and-click rapid prototyping available with NetSuite’s form and interface customization tools.  With SuiteFlow they can now apply this same advantage to business processes for their specific applications, greatly reducing development costs.

Of course one of the inherent benefits of SaaS customization, as opposed to on-premise customization, is that customizations do not create version lock amidst the fear that an upgrade will break the customization. Any process or workflow defined in SuiteFlow is automatically carried forward with application upgrades.

But stepping aside from the details here, I believe that SuiteFlow and related moves by other vendors (salesforce.com’s chatter for example) see software distancing itself from the ivory towers of IT and become truly a partner for change.

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