Sightings in SaaS

Some of the most interesting things I heard from Suiteworld day 1:

• “Let’s face it, no one wants to do accounting in the cloud, they want to do business processes.” From Zach Nelson’s morning Keynote yesterday. He’s right. Selling accounting in the cloud is silly. Selling a business process that includes vendors, customers, partners and your employees acting through the cloud is the way to go. We are just starting to see the possibilities here. More NetSuite B2B customers should be using vendor and customer portals, another point that Nelson mentioned.

• Accenture comes on board as a partner. This is how NetSuite is going to sell to the Fortune 500, or 2500, divisions, like the recent sale they announced, Qualcomm. Accenture can handle the integration between OneWorld and SAP or Oracle as well, to marry the NetSuite results with the HQ CRM/ERP package. Qualcomm gets to keep its investment in SAP while leveraging the cloud for easier, faster, simpler division accounting and reporting. It’s a nice marriage.

• Zach Nelson CEO started his talk by mentioning some of the small companies that started with NS when it was still NetLedger and still with the company after all these years. Wow that is significant.

• Then there was a lot of talk about bringing the robust technology of large companies to the SME (small and medium enterprise) market, while giving the large companies the agility of the SME. NetSuite went out of its way, frankly, to let their current customers and prospects understand that they are not walking away from the SME even while they pursue the Qualcomms of the world, but let’s face it this is going to be really hard to serve both masters. Not saying it’s impossible, just that it’s very difficult. The big packages software vendors, SAP, Oracle, Peoplesoft, all tried to serve the SME market after the Y2K glory days ended and it was a mess. They had the wrong ideas from start to finish, from licensing to implementation and support services, nothing worked well. They all blamed it on the robustness of the software, but my experience was that the software was not a problem at all. It was software and consulting managers who saw small deals as a waste of their time. It’s going to be interesting to see over time if NetSuite continues to serve the 5 to 50 person company, or if they see a constant movement of their best talent from the SME space to answer the needs of VIP clients.

• Rapid Deployment: Groupon’s ability to go live with 10 subsidiaries within 8 weeks of signing their contract is an awesome accomplishment. They will have all 26 live in 6 months or so. Yes, more awesome. So what does this tell you about the implementation? Did they document a lot of their work? Spend endless hours trying to get every manager on board with change? Let the consulting team take all the risk? No, what it means is that Groupon took the reins early on, as only a willing young startup can, and figures to lead pole to pole. Formality, risk aversion and stupid politics kills large company IT projects more than anything else. Makes me glad that Accenture has volunteered for that duty.

• The NetSuite economy grows in many different ways. There are more partners, both implementation and development and software. This is a good thing and really bodes well for the company. When you have mass like this it starts to create its own energy.

• Baker Tilly and RSM McGladrey are two of the largest midmarket accounting firms in the country, and now they are also NetSuite partners. Interesting that when you visit their websites, as well as Accenture’s, they each have two mentions of NetSuite. Baker Tilly has a page devoted to the relationship, and it’s probably just early days for the others, but it does give you pause. Are these folks all in on NetSuite, or are they just toe in the water and waiting to see what happens? NetSuite has had their fair share of toe in the water partners over time with little effect on results. Would be nice to see one of their all in partners brought up on stage once, like Explore Consulting in Seattle.  Nelson gave Explore a shout out, but really where’s the love?

• “When you are a NetSuite customer, you are an Oracle customer,” so said Oracle rainmaker Mark Hurd. Well truism or not, some people don’t like to be reminded. Dennis Howlett remarks:

There was a sharp intake of breath among media and analysts at that one. My take? Be afraid, be very afraid. -;)

I don’t think we have to be afraid, we simply have to reasonable. If you want the quality of software, the tools, the security and robustness of the big players you are going to pay the toll. Larry is not about to apologize for creating the best database in the world and give you a break. Oracle, and by default NetSuite, will have its pound of flesh.