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!