NetSuite Announces Aggressive Plans To Move Into The Enterprise

NetSuite was kind enough to invite me to the analyst day at its SuiteWorld 2011 user conference — an event packed with product, strategy, customer, and partner information. The focus was clearly on its platform and ERP solutions. Here are my thoughts and takeaways:

  • NetSuite wants to ride the SaaS wave into the enterprise. NetSuite is the only SaaS-based ERP suite of scale. It reports that its data centers get 2.2 million unique logins and 4 billion customer requests a month. However, NetSuite wants to do better. It wants to take its well-tested and well-adopted solution in the midmarket and extend into the enterprise. The timing is right, as Forrester reports that enterprises are ready to consider SaaS-based ERP solutions. In fact, NetSuite reports that sales to enterprise customers increased 37% between 2009 and 2010.
  • NetSuite has a solution package targeted at the enterprise. NetSuite announced a new “Unlimited” package for about $1 million, which includes all modules, unlimited storage, applications, SuiteCloud customizations, subsidiaries, and unlimited users. The exact pricing is based on functionality and number of users (which starts at 500), and scales up from there. It is a package targeted to compete with traditional on-premise ERP vendors as well as SAP’s on-demand solution, Business ByDesign.
  • NetSuite offers quick time-to-value for enterprise customers. NetSuite highlighted Groupon as the poster child for realizing quick time-to-value for complex, multilingual, multinational deployments. Groupon went live on NetSuite OneWorld in five international markets within six weeks; 26 markets are expected to be live in another three months. Qualcomm has also signed with NetSuite to adopt its ERP system in 140 global locations based on its ability to support multicurrency financial operations and multinational tax rules in real time.
  • NetSuite is investing in its data center infrastructure. NetSuite announced that it will use Oracle’s Exadata database systems for its cloud solutions to ensure adequate performance and scalability.
  •  NetSuite has invested in enterprise-grade partnerships. NetSuite announced value-add partnerships with Accenture, RSM McGladrey, a professional services firms providing tax and consulting services, and NEC, an IT integration firm targeting solutions for large enterprises.

But it’s not all about the enterprise. NetSuite also announced partnerships with ISVs (Yammer, Callidus Software, Citrix, Concur) to develop new applications for and integrations with its platform. NetSuite also announced integrations with Google Apps, new mobile (iPhone and iPad) apps, and a slew of new core product enhancements.

During the analyst day, NetSuite reiterated its differentiators: its cloud-based solution, with a 10-year head start over its competitors; its unified data model enabling the management of end-to-end processes from eCommerce, CRM, and ERP; cost efficiency; and flexibility. However, enterprises demand customization, deep functionality, and integration that extend far beyond the  needs of midmarket enterprises. NetSuite has done well in the midmarket, where these requirements are not as deep. It will be a challenge to see whether NetSuite can deliver as it makes inroads into the enterprise.

Categories: