On-demand ERP software vendor NetSuite announced a new push into large enterprises on Tuesday during its SuiteWorld user conference in San Francisco.
Dubbed NetSuite Unlimited, the announcement is less about a specific product than about an array of partnerships, services, applications and technology improvements meant to respond to the demands of the world’s biggest companies. The move represents a further shift away from the small and medium-size businesses that have largely constituted NetSuite’s user base since its formation in 1998.
“We’ve done our best to give you the power of the big boys, and give the big boys agility,” CEO Zach Nelson said in a keynote address Tuesday.
At the core is a new version of NetSuite that offers support for unlimited users, unlimited storage and add-on applications as well as access to all NetSuite modules, according to the company. Pricing starts at around US$1 million per year, Nelson said. Even that price is much lower than what many companies are paying the likes of Oracle and SAP, he added.
Another component of NetSuite Unlimited is a new partnership with services firm Accenture, which has created an ERP (enterprise resource planning) practice around NetSuite’s software, he said. Accenture’s stamp of approval could give NetSuite more credibility with enterprise customers.
In addition, NetSuite is beginning to roll out Oracle’s Exadata database machine in its own data centre, to work in conjunction with the company’s existing data centre operations, Nelson said. In that data centre, Exadata could end up supporting larger NetSuite customers’ application instances, as well as more resource-intensive workloads such as e-commerce, Nelson said.
The move deepens NetSuite’s already close relationship with Oracle. NetSuite uses the vendor’s database and middleware, and Oracle CEO Larry Ellison remains a major investor in the company.
“We couldn’t do what we do without Oracle,” Nelson said. “They’re an unbelievable partner.”
To that end, NetSuite does not necessarily expect to replace the likes of SAP and Oracle as large enterprises’ primary ERP system.
Instead, the company is more intent on serving as the second pillar of a “two-tier” ERP strategy, wherein its software is deployed in an SAP or Oracle shop’s new subsidiaries or offices around the world and then tied back to the main ERP core. Microsoft, Epicor and other ERP vendors have adopted a similar marketing strategy. SAP is trying it with its Business ByDesign suite, which like NetSuite is SaaS (software as a service).
NetSuite presents “a major option” for two-tier ERP especially considering it is delivered as SaaS, according to analyst Ray Wang, CEO of Constellation Research. “The cloud base gives customers an opportunity to stay on legacy and evolve to cloud,” he said.
Some customers will even end up flipping the model, making NetSuite their first tier and the legacy system tier two over a period of years, he added. That’s because “the pace of innovation is faster in the cloud,” Wang said. “The ecosystem has more options to offer the client, and customers can focus on the solution, not the technology.”
NetSuite and other vendors seeking to be tier-two players are competing on their ability to manage the complexity of integration and deploy more features quickly, Wang said.
Nelson alluded to this during his keynote, touching upon NetSuite’s SuiteCloud development platform, which can be used to extend the application. “Within two years our developers will be developing only on SuiteCloud,” Nelson said. “That’s how rich this platform has become.”
There are some 4,000 SuiteCloud developers now, he added.
PaaS (platform-as-a-service) capabilities like that provided by SuiteCloud are an increasingly strong focus for SaaS vendors, who want to give customers the benefits of flexibility and a broad market of add-ons built by partners.
There will be “probably 40” announcements from NetSuite software vendor partners at the conference, according to Nelson. Some are expected to be made tomorrow during a keynote by NetSuite CTO Evan Goldberg.
With the recent Amazon Web Services outage no doubt fresh on the minds of many at the show, at one point Nelson sought to deliver some reassurances to potential enterprise customers, revealing that NetSuite has experienced on average 99.96 percent uptime during the past six years.
The company also managed to deliver a couple of high-profile customer wins to bolster its large-enterprise message.
For one, Qualcomm has signed on to use NetSuite in some capacity. NetSuite’s software “presents us with an opportunity to begin centralizing some parts of our e-commerce systems and further streamlining the management process,” said Peter Rubenacker, Qualcomm’s vice president of information technology, in a statement. More information wasn’t immediately available.
NetSuite also is planning to discuss a deal it has signed with e-commerce company Groupon. The “deal-of-the-day” website is expected to go live on NetSuite in 26 international markets, “replacing hundreds of spreadsheets with a single cloud ERP system,” according to a statement.
Groupon’s international controller, John Bosshart, appeared onstage with Nelson and discussed the company’s rapid expansion into 46 countries and 500 markets in just two years.
“Being at that pace of growth, we have multiple accounting systems out there,” he said. “We wanted to get to one platform, one component, and get there very quickly.” NetSuite fit the bill due to its SaaS deployment model and “tremendous job” handling multiple languages, he said.
Groupon signed a contact with NetSuite in early February and the first countries were up in six weeks, Bosshart added.
Also Tuesday, NetSuite announced a planned integration with social-networking vendor Yammer. NetSuite users will be able to push records from the system to Yammer for sharing and discussion with others. The integration will be completed later this year.
Comparisons will no doubt be made between NetSuite’s move and Chatter, Salesforce.com’s social-networking tool.
There’s a key difference, Nelson said in an interview. “If we had our own client it would be somewhat anti-social,” he said. “For social media to be successful in the enterprise you have to have an open strategy.”
Overall, NetSuite’s announcements are “a logical extension of what they have been doing,” said Michael Krigsman, CEO of Asuret, a consulting firm that advises companies on how to make software projects successful. “They’re riding on the increasing validation of the cloud among large enterprises as well.”
While cloud-based software removes some of the technological complexities that hamper on-premises implementations, it doesn’t present a cure-all for customers, Krigsman added.
For customers, “it’s not just about mapping [existing business] processes to the cloud, it’s figuring out how they’re going to do things better.”
