It’s been such a busy few weeks. I have never had a more “free” schedule and yet everything seems so completely packed!! I had an excellent YES+ workshop in Amsterdam and people shared some very amazing experiences. The course on Google continues. Discussions around cloud and social media are on, and yet I feel completely packed despite being ‘free’. Since early last year, two companies have had a rather special focus from the regular large enterprise software players of SAP, Oracle, Microsoft, IBM, SFDC, Capgemini, Accenture, Deloitte etc… These are (drum-roll please) – NetSuite and Workday. In this post, I want to start with giving a short but somewhat comprehensive overview of NetSuite, before we deep dive later on!
What NetSuite does
What is Cloud? What is business management? What is the software they are making? Cloud very simply out is the internet and the business management software are the various offerings around business processes in a company.
NetSuite delivers various offerings around ERP / Accounting, CRM, Professional Services Automation (PSA) and E-commerce solutions. While they maintain a SaaS model, (no more a differentiator in the market anymore), NetSuite works on a 2-tier strategy I find rather compelling giving an integrated enterprise wide system, with a good user interface (I got a certificate from one of their sessions) and a nice role-based dashboard view. They’ve amassed over 13,000 clients in about 14 years and since early 2012 to now, the company has shown a phenomenal investor and wall-street confidence.
The market cap has more than doubled from 3.7B$ then to about 8.1B$ as we enter the last quarter of this calendar year. NetSuite has an industry focus on various verticals such as Manufacturing, Energy, Healthcare, Professional Services and, Retail and Wholesale Distribution among others. Considered one of the best integrated solution in the SaaS ERP market, NetSuite is particularly strong in the Professional Services Automation (PSA) and e-commerce solutions which cover about 20% of the market share.
The NetSuite Strategy
One of the things I particularly liked was its global presence and using partners to expand faster. Have bases in California, Ontario, Sydney, UK/Middle East/Africa, Singapore and Hong Kong, NetSuite has grown particularly ‘Down Under‘. Partnering with experienced players like Capgemini, they open the flood gates in Europe. Partnering with Oracle (no surprises) NetSuite has a better deal with their strategy.
But two things catch my attention is their focus on Mobile and Big Data. Looking at connectivity on the fly and Predictive Analysis, they started from the SMB market and ‘satellite’ locations of large enterprises. Now, they are ready and prepared to bring the game to next level! NetSuite from the start envisioned this and this can be seen courtesy its PaaS strategy. NetSuite has its own platform ‘SuiteCloud’ which connects NetSuite with SAP, SFDC, Google Apps and Oracle! Coupled with its Two-tier ERP strategy which makes sure it can cut into the legacy systems market with increased agility and reducing localization concerns, the “cloud model” is a winning bet. Even from a technology standpoint Larry Ellison cleverly has ensured the development happens in the Java environment and operates on an Oracle database!
However, my “expertise” (if I may say so) is in the space of alliances and partner management. It’s interesting to look at the NetSuite Partner program. It is quite comprehensive with various ways to ‘reach’ out to clients and customers. Accenture, Deloitte and Baker Tilly, for example, are building relationships with NetSuite as “SI Partners” and positioning themselves as experts from a solution perspective. Given their referral and ISV approach it’s not a surprise that the company’s indirect sales are growing faster than direct sales and the North America channel operations have grown 50 percent year-over-year!
Can anyone escape competition? NetSuite is no exception! It has several. Here I list 4 of them in a little detail while 3 others are food for thought.
Intuit with Quickbooks. NetSuite is an online application; QuickBooks came as an installed software that resides on an office computer. NetSuite’s cloud model and remote access gives it a big advantage! Infact, QuickBooks converts are the most popular upgrade source for NetSuite.
Aplicor is another competitor. Aplicor also delivers on-demand ERP software. Both companies deliver ERP application suites but the target markets differ. NetSuite’s corporate culture is closely identified with Oracle and a majority of its customers are small businesses. Aplicor has strong reputation among its customer and business partner community with customers largely middle market companies
The Sage Group is the third competitor to list. Sage have legacy systems with deep software functionality, large customer bases and a mature VAR (value added reseller) distribution channel. Sage also has an impressive SMB market share and is the primary competitor to the Microsoft Dynamics accounting software.
Microsoft has a product portfolio called Dynamics which has succeeded in achieving SMB market share in the traditional on-premise market, however, it is still to gain recognition as a SaaS ERP system leader. Reports suggest that NetSuite faces Microsoft Dynamics as a competitor if a customer is uncertain about their choice in on-demand or on-premise delivery. NetSuite is a strong competitor to the Dynamics solutions when viewed from functionality & flexibility and provides the big advantage of subscription-based pricing, which Microsoft has tackled well.
SAP & SFDC
With SAP, the main product NetSuite are competing against is Business By Design (although they are “closing it” it will still remain as specialized applications). However with Salesforce, given the large third-party solutions available and especially in the CRM SaaS space of larger deals, NetSuite is no match for Salesforce.
Oracle – ? ! 🙂
NetSuite is clearly a company to watch out for! They’ve been growing and I’d expect this trend to continue. As we move into a world where technology is growing faster than ever, and we’re connected to various devices and applications at almost any given time, I remember His Holiness Sri Sri Ravishankar saying that “Technology has shrunk the world into a global village and spirituality will turn it into a global family“. It becomes more important for us to remain ethical and use technology to fulfill the need of many rather than the greed of a few!
Until the next post