Sightings in SaaS

Posts Tagged ‘NetSuite and NetSuite Consulting’

In my last post I talked about how the Small and Medium enterprise IT market was fractured based on experience. There are the Newly Born who see opportunity in IT systems, the Reincarnated who have extensive experience with systems and keep bringing their knowledge to the startups they work for, and the Buried, who have buried costs in current systems and have never understood the need for better systems.

NetSuite, I maintain, has an excellent opportunity with the Newly Born and the Reincarnated, and I believe this shows in the client list, both ours and the larger NetSuite customer base.  So is there any chance to talk to the Buried, to get them excited about NetSuite, to bring them on board? And who do we talk to over there? The owner, the office manager, the IT guy?

One way to tackle the problem is to take a look at how the competition does it. Want a great example of business system marketing, read this article about Microsoft’s latest edition of Great Plains, from Mary-jo Foley of ZDNet :

(A quick PowerPivot refresher: Codenamed “Gemini,” PowerPivot is integrated with SharePoint Server 2010 and SQL Server 2008 R2. Microsoft is touting PowerPivot’s benefits as integrating “massive amounts of data on the desktop from virtually any source”: and the performance fast calculations and analysis on large data volumes.)

Like previous GP releases, the 2010 version will include a built-in connector allowing two-way information sharing between GP 2010 and Microsoft’s on-premises Dynamics CRM and its cloud-based and/or partner-hosted CRM Online offerings. In addition, by taking advantage of the presence functionality in Office Communications Server 2007 and its Office Communicator client, GP 2010 gives users the ability to right-click on a contact to send that person information with fewer steps.

Now, these two paragraphs may not seem interesting to you, and that would make you normal; however, if you are an IT guy at an SME, these are marketing gems. They are subtle and press all the right buttons. They don’t blare “look, long term job security!” but they make the point very well, indeed. In just those two little paragraphs there are 7 different products mentioned: PowerPivot, Sharepoint, SQL Server, GP, CRM Online, Office Communicator Server and Client. If you could get your boss to invest in this, you could buy that little cabin on the lake. May not have a lot of time to hang there, but you could own it.

The upshot is that it is useless to talk to the IT guy. He has no interest in hearing about a single, integrated system with no infrastructure. And the office manager, well that’s also probably a waste of time. They hate learning new systems, unless the current system starts creating unwanted overtime. That really leaves the owner. In some cases whenever the ownership hands over to a new person, son or daughter or buyer, there is an opportunity to talk to someone with some energy for the business who can see the difficulty of running an organization with a 100 data silos. The message?

The message has to be that NetSuite gets you out from under the thumb of your staff. Everyone who has ever been the new manager at an existing business knows what I mean. The current employees try to run you. They attempt, with all their wits, to box you in, to make you accept the current state of affairs as the only, the necessary state of affairs. “We don’t do it that way because it can’t be done that way.” They despise change. NetSuite generates change, and not just for the sake of change, but for the sake of better business practices, more measurable input and output, greater visibility and better decisions, including which employees to keep.

Every year, there are tens of thousands of SME’s that change hands. This is the secret passage into the market of the buried. There is a narrow window of hope for these companies. With some subtle marketing NetSuite ought to be able to talk directly to the new managers and let them know that there is a system that, together with their iron will, enables them to take back their business, get it on better footing, and grow it like they know it can grow.

Finding customers among the Buried is not easy. It requires the right message to the right audience. It also requires acknowledgement that a lot of the Buried are really lamp posts. But when they change hands, it’s a whole new opportunity.

I just finished reading an interesting article by fellow EI Mike Krigsman in his IT Projects Failure  blog.  There is also an interesting video interview with NetSuite CEO Zach Nelson about the value of NetSuite, cloud computing and NetSuite implementation.

One thing came to mind for me as I listened to Zach and read Mike’s analysis; that is, the SME, small and medium enterprise,  market is really substantially different from the large enterprise market in one very important aspect: Experience.

In the SME market there are the Newly Born. These are companies that have gotten started within the last 10 years and have grown substantially. They have managed to achieve this growth, in many cases, without the benefit of a well thought out IT plan. They probably have an off the shelf accounting package, email, possibly a small crm system and a lot of spreadsheets. Someone hosts their website. A service bureau does their payroll. Regardless, they have grown and now number 50 employees or so.

At the next level there are the buried. This is a company, sometimes of considerable size, that is now on the second or even third generation of ownership. They have systems, somewhere, and the systems are capable of reporting month end results. Again, they look to third parties for a lot of their needs, like payroll, website, etc. But for the most part, their systems and the costs associated with them are buried.

Finally, there are the reincarnated. These are organizations led by people who have done this several times. They have worked for large companies, and led new startups. They often have venture or angel capital and have as much business savvy as large organizations. They may begin with a limited set of applications, but over time they formulate an IT plan that enables their revenue growth and keeps costs in check. They understand the value of systems. They have been there before and they personally know the costs of on-premise software.

Now which of these three companies is a good candidate for NetSuite? Well, I can take a quick gander at our own client list and tell you that about 1/3 of our clients are the Newly Born looking to upgrade to something better and the other 2/3s are the Reincarnated. The Buried show up here and there, but very rarely. From time to time a new owner takes the reins of one of the Buried and they start down a new path, but by and large the Buried are a very difficult market to sell anything into. Even in the best of times it’s hard to make inroads in this market. Why is that?

Well, the largest cost of on-premise systems, by far, is the enormous distraction they create to what should be normal business operations. Yes, I agree with Nelson that there is huge value to one system, huge value to not having to ’spin up a server’ and even huge value to cloud implementations over on-premise. In the end, however, it is avoiding the cost of distraction that provides, to me, the real value of NetSuite and other cloud computing applications. At the Buried, the distraction has now become the normal. People don’t even notice it anymore.

My wife and I saw this firsthand recently when we stopped by a local establishment for dinner and, while waiting for a table, had a drink at the bar. While standing there and placing our order, the system went down. The bartenders made a simple announcement to the rest of the staff and they all started to manually take orders. It became paper based in a matter of minutes. I remarked about it to our server and her reply was “Oh, we’re used to it, it happens all the time.”

This is what the Buried live with every day. They have simply acclimated themselves to the fact that their systems are what they are. It may take a week to produce an inventory report in Excel but once it’s created it’s only a couple of little tweaks every month to fix it up and off we go. Multiply that effort by 200 or 300 and there you are, an information system built on the desktop, ready to go! The Sales Manager(s) may spend hours approving written commission and expense reports, but they’ve worked it into the schedule, no worries. The costs of creating, running and maintaining this ’system’ are buried, and will remain ever so. The auditors might grumble, but they tend to grumble a bit anyway.

The difficulty for NetSuite is telling a story that helps the listener understand how the world changes when you have a integrated system that relies on real, and real time, data. The key is “Who is the listener?” I’ll talk more about that tomorrow. Right now, I must honestly get back to work helping one of the Reincarnated implement NetSuite.

This came across the wire earlier today, pretty good news for NetSuite:

Nucleus polled NetSuite customers to gauge their success and satisfaction with their decision to entrust mission-critical business functionality to cloud computing. Ninety percent of the customers surveyed rated their satisfaction as four or five out of five — satisfied or very satisfied, and no company rated their satisfaction below three. When asked to elaborate on the reasons for their satisfaction, NetSuite’s ability to drive cost reduction was mentioned as a key driver. By offering tremendous scalability and breadth of functionality, with little to no IT expertise required to install and manage, NetSuite has earned long-term satisfaction and loyalty. “Because the application has been validated by users as an effective tool in cost reduction, deployment footprints at existing customers are more likely to increase rather than decrease,” wrote Nucleus in the report.

I’ve long said that running a system, or especially, many systems, has a huge hidden cost. Some might get away with it by putting the brother-in-law in IT, but believe me there is no way that the systems you maintain do not have a cost, I don’t care who runs them.  And there is also a cost to the systems that you do not run, mainly in the time and effort people expend manipulating data on spreadsheets.

6,600 customers, that’s pretty good, too!

Over the weekend I met a fellow in a local hardware who was looking for some very unusual screws. We got to talking and I found out that he supplements his retirement pension by re-conditioning dental chairs, of all things. Evidently it’s a decent money maker for him and he enjoys the hobby.

The conversation started me thinking about the current states of software and how this might actually reflect the state of the economy overall, not just in this downturn but in long term fundamental changes in the economy.

Software is in harvest mode, just about everywhere you look. What is harvest mode? When products reach the end of the life cycle they are kept around because they still have some value and market cache. We don’t continue to invest in them because the investment will no longer pay off. So we simply harvest whatever revenues we can while keeping a very close eye on costs.

In the software world, there are actually companies that buy older products and continue to harvest maintenance fees for years, especially true in the software for busines verticals. A friend of mine who works in a local steel service center owns one of these. The company purchased the software 20 years ago to help them manage inventory, processing and scrap. Then about 8 years ago the company that wrote the software sold off to a harvester. They now have a single person who supports the code base, but the product is no longer actively sold. There are after all only so many steel service centers in the world.

But what we are seeing today is something completely different. We have non-vertical, on-premise ERP/CRM software that is being harvested by the company that orginally wrote it, in the case of SAP, or by the companies that purchased it, in the case of Oracle or Sage. One way or the other, it seems that all 3 companies have come to the conclusion that it is useless to invest money in their now graying software products.

SAP’s steady decline went by another hurdle this past weekend when the current CEO left unexpectedly and two guys were promoted into the top spot. You can read extensive apologies here. Oracle has almost 100 acquisitions under it’s belt, making it a software harvester extraordinaire. Sage also has a host of harvest products. In fact in the on-premise space if you aren’t being harvested, you are a harvester.

On the plus side, harvesting means that your on-premise system will continue to run and be supported, more or less, by someone for the foreseeable future. On the down side, this means that you will continue to pay a lot of maintenance fees for the foreseeable future with little if any new features/functions. You have software on life support, basically, and that is both costly and a sorry state of affairs.

Why this is happening is difficult to say because the reasons are nearly as numerous as the underlying products. Sage for example still has some products that are not real time, but instead rely on batch processing. You would think it makes sense for companies using something like this to look around for something new, more useful and modern. There must be two reasons that they are not interested in changing: The newer software does not offer enough value to pay for the investment and trouble to change; the company is no longer making the income it once did and therefore has little to spend and little faith in the future. There’s some truth in both of these, but taken together they really pack a punch.

Think about a company that wholesales/distributes dental supplies, a b2b business. There was a time when the population in their area was surging and dental offices popped up like flowers. They became a strong regional player with a one or a few competitors, and all of them did well. But over the past few years business has changed substantially. First there are fewer new practices opening in their region, and the ones that are there have begun finding better values online. They can deliver next day, but it actually costs them more to hire a driver, a cost that he must pass through to customers, than it costs an internet distributor to send next day air. Huge efficiencies have happened in their market, and all have squeezed their margins.

What does a company in this space do to compete? They could also sell online, but they don’t have the expertise in materials management nor the capital to bring to bear to run an enormous, national brand warehouse. So, like the software companies, they go into lockdown, or harvest mode. They continue to service their region, keeping a very close  eye on costs, but they are unable to afford huge new investments in the business. Including software. So they keep on with their old system and eventually they will run out of reasons to exist altogether. Meanwhile, dentists squeezed by better oral care buy used, re-conditioned chairs instead of new ones. These are also available on the Internet.

In short, the Internet has thrown a wrench into the works of many mainline companies and as a result they have turned off new investments in technology. When I go over my NetSuite client list I can see a lot of companies that we implemented the software service for but only 2 of the more than 90 companies are mainline wholesales/distributors . Interestingly, one of my first clients was an Arizona company called Lifestyle and Leisure Creations, a wholesaler of massage equipment and supplies who sold out to a larger competitor.

That’s probably a strategy that  a lot of businesses need to be looking at. Purchasing competitors, especially at current discounted prices, can be a useful way to expand your customer list and restore some pricing strength. But you still need to gain greater efficiencies and the best way to do that is to think about investing in better technology. If you have a growing company across a large geography, you need to see where you are everyday and at every location. It’s not good enough to just throw together results manually at the end of the month. This is how on-demand software as a service can really help. Your entire company can work off a single account of the software, giving you real time results from all branches, warehouses, etc. And you don’t have to add the very expensive computing infrastructure that used to be necessary.

Again, looking over our client list, I see a dozen brand owners. These are wholesale/distributors who have gone an extra step and now are also manufacturing the products they distribute, using third parties in most cases. Brand ownership is one way of averting the steady decline of growth death spiral.

If your margins are getting hit hard and you’re thinking growth through aquisition or  brand ownership is the only way to continue the company, then you have to consider on-demand software. Like you, it operates unbounded by geography. And while on-premise software continues to struggle, NetSuite’s SaaS ERP/CRM grows and takes their customers.

I have not had the opportunity to post in a while. Have been completely caught up in travel with several NetSuite go-lives this year. Things are finally calming down for a short period and I can catch up on taxes, baseball news and the blog.

Talking about baseball, my recent travels took me to St. Louis where my gracious hosts were so kind as to take me to the area know as The Hill, a predominantly Italian area of the city. We had a great meal at one of the many local eateries, but the highlight for me was the passing of a ball yard where former major leaguers Joe Garagiola and Yogi Berra once played. That was kind of cool. The whole neighborhood was very nice, even on a snowy winter night.

Good-bye to Curtis Granderson. The Tigers traded the best Tiger to the Yankees, which I am sure makes my friend and baseball nemisis Paul Greenberg happy. Best to Curtis, I for one always loved his defense.  New York Yankess, ugh. Don’t get me started. I always like the way that they pronounced ‘Yahnkeeees’ in “Last of the Mohicans.”

I also actually saw it rain in California. I have probably spent a whole year of my life, a week or weeks at a time, in CA, and cannot remember it raining. This trip in rained everyday and hard. Fremont was flooded, and the storms only added to the overall picture of a California under deep stress. The cab drivers, the waiters, the client and the folks at the hotel all talked about the local and national economy. For once I did not hear any snarky remarks when I mentioned that I was from Michigan. That was in itself a revelation.

But don’t get me wrong, I am not celebrating the hurt the West Coast is currently undergoing, or anyone else’s for that matter, including our own here in the Upper Hand. To the contrary, I am a little nervous because so goes California so goes the country. It is such a big part of our economic engine that when I hear about the commercial real estate vacancy rate I have to wonder how long before we’ll see a real and regular pick-up in activity. In my darker moments I wonder if we are not heading into the 2nd dip of this recession. We will eventually pull out of this, but will we be any smarter? Does the political class, all of them, realize that we have now run out of other people’s money? I’m not sure.

At any rate, we have been fortunate to continue our NetSuite consultancy into the New Year with several new clients. Helping these companies start to use NetSuite made me wonder how companies operate across wide geographies without a tool like NetSuite. How do you keep far flung sales people, warehouses, support staff on message, working with purpose, productive, connected? We have so many different modes of communication now that we often take for granted how difficult it is to create an effective team and get everyone moving in the same direction. It takes more than IM or cell phones, or smart phones. If you are operating virtually, meaning that you have employees that do not come into a central office everyday, then you really should think about an online place where the company can meet, where everyone can add their efforts to the team and understand their contribution. You need to connect everyone to headquarters. How?

Well, I hear the IRS calling my name, telling me that I need to get everything over to the accountant. Best to all of you in this New Year, and I hope we all pull out of this in one piece.

Every once in a while I write a post that’s crazier than most. These normally happen late at night when my internal defenses have given way to a glass of wine. This post is along those lines. The basic question that I’ll try to answer is “Will the Cloud and SaaS save the current roster of Enterprise Software from the Dinosaur like extinction of its forebears?”

I’ll start by asking what  can you expect if you travel around the world looking for a tasty chicken dinner?

In Vietnam you can buy a live chicken, rest is up to you.
In China you can buy a chicken that’s been killed, you pluck and eviscerate and cook.
In Paris your chicken has been plucked, you eviscerate and cook.
In Des Moines the chicken has been plucked and eviscerated, you cook.
In New York the chicken arrives on your table plated, garnished and sauced

Now it may not seem like the world of software and the world of chickens have a lot in common, dear reader, but don’t give up yet. There is a point that I want to make here. A recent conversation with the Enterprise Irregulars around the difficulty of moving ERP systems forward with the business brought some interesting ideas to the fore. It all got started with an article by the now famous, in these parts, Thomas Wailgum in CIO about a study partly commissioned by CIO and Enterprise analyst IDC concerning this very question. Wailgum’s title says it all “ERP’s Paralysis Problem and the Repercussions for Businesses Everywhere.” The repercussions, as you might have guessed, are not good.

First,the premise, more exactly, is that ERP systems can prevent companies from seizing business opportunities because the systems are lumbering giants not given to flexibility, agility, growth and change. This leads us to conclude that the deeper the functionality of the ERP system the greater the difficulty of meeting business opportunity challenges. ERP in other words suffers from the New York Chicken problem: Once it’s served there is no turning back. You can’t change the recipe or cooking method at that point.

It’s an interesting thought. I am not sure that it is 100% on the mark, but having worked with Oracle ERP software for nine years I can attest from personal experience that there is more than a grain of truth here. Brain Sommer has a good post about some of the real sticking points in ERP systems that make changes and additions so difficult. This one stuck out:

5) Code block insanity – Just because your accounting modules can support a 30 segment code block doesn’t mean most companies should use this. Moreover, what views a company will want in its code block will change over time. Unfortunately, most financial software products (and all the feeder systems that supply accounting transactions to them) make changes to the code block akin to a complete re-install of the software. Nothing brings rigidity to ERP like the code block.

I’ll take the thought one step further – why do we have a code block, this huge accounting nightmare that attempts to pump all possible corporate knowledge about what the company sold and purchased into the general ledger from the subledgers where the transactions take place? When they began to create software for financial transactions they had only a general ledger, so to see as much data as they possibly could they tagged all the transactions in ht GL. Business software became accounting centric, and remains so even after real time relational systems came on board with multiple subledgers that can report out vast quantities of detailed information. Why do you have to update the GL with sales data when it exists in such fabulous detail in your CRM/Order Management system?

So what does a large enterprise do? They run Oracle, SAP, or something similar. Does the enterprise just forgoe new opportunities? I can’t imagine that , especially since the people who run large enterprises normally come out of sales and sales is where most of the new opportunities get their start. These folks are not going to be patient for long. Eventually the line of business, lob, will go ahead and start to do whatever they have to to tackle new business, even, in many cases, if that means writing custom software.

Now, developing custom software may not seem like such an odd pursuit to you and you would be correct – if it was the 1980s or earlier. But when so many large enterprises went to systems like SAP and Oracle they lost their development teams. That was the cost justification of the new ERPs. In the bad old days all large companies employed large teams of developers who built their custom business apps from the ground up on what came to be know derisively as legacy platforms, from IBM, Burroughs, etc. Coding custom software is like the chicken in Vietnam or China. Well, at least now you have more refined tools and platforms, so we will say it is more like China.

Well, apparently the wheel has turned again. Large Enterprises are again back to the custom software job enthusiastically and doing it with the aid of all the modern IT tools, platforms and business models – outsourcing, offshoring, onshoring, LAMP stack, Cloud, Free Open Source Software, you name it. They are coding software at a pretty good clip evidently, again in an effort to meet business opportunities.

Being on the cloud and developed in the SaaS, software as a service, model may help some of the newer entrants to the Enterprise software market avoid the New York chicken problem because the cloud can give a company greater access to partner software add-ons. But that is not a given. They must still walk a tightrope between offering a robust application that includes most basic needs while giving the Enterprise with more complex requirements a path to customize those requirements using the applications itself. Every NetSuite implementation, to be perfectly honest about it, requires a fair amount of explanation of what is not possible. You can run a lot of business processes in the system with no further customization and coding should be rare, but to have a system that truly represents your business today and your meets future opportunities, you will need to customize a quite a bit and code a little. It’s not an easy tightrope to walk obviously, and the balance struck is a subjective proposition.

However, I would also submit that every buyer contemplating the decision to move to one of these new enterprise systems should have a hard discussion about how much they want to customize and code, and how to do it in a way that prevents them from falling into the New York chicken problem themselves. For my part, I suggest that clients hold off on any customization except the most absolutely vital, and wait to add code completely, until you are live for six months. You will be surprised by how much your requirements will change once you know and understand the system.

The myth, not sure if it is still current, that SaaS prevented customization, has largely been itself eviscerated by Netsuite’s Business Operating System and Salesforce.com’s Force.com development platforms. These systems are not only open and customizable, they also encourage customers to make the applications meet business opportunity challenges.

Only time will tell if SaaS Enterprise vendors avoid the same fate as their older brothers like SAP and Oracle, but it is a good time to ask the question. Who would have thought 10 years ago that ERP would end up costing you money?

There, done. It had to be said and now it has been said. I no more liked saying it than you liked hearing it, but the truth will out, and now it’s done. Take a deep breath.

By not only having a financial software company write a new version of their software on the force.com platform but by then entering into a joint venture with said company to market the newly combined CRM and Financial software product, Salesforce.com validates what we have been writing and saying these five years: To wit, it does not make sense for Small and Medium Enterprises, SMEs, to try themselves to patch together various applications when there are integrated products already on the market. Integrated apps, as in a suite, are an enormously beneficial idea for any company but especially for the SME who does not have the time, manpower or cash to build bridges from one app to another.

In our long experience it is only the largest enterprises that have the necessary resources to pull off the interfaces between applications, and even then it is usually not done well. And to be perfectly frank, integrated suites are not perfect either; I make no argument to the contrary. However, when you are making the decisions for your SME you do not have the luxury of considering a best-of-breed-applications-stitched-together-and-maintained-by-professional-IT-staff approach to your business. It is simply not in the cards. Even if it were you will have a hard time explaining to yourself, and any one else who might be listening, why so many organizations across the world and across so many industries have abandoned the best of breed approach for their core applications and gone to an integrated suite (Oracle, SAP, etc.).

When we talk to SMEs who currently have several key applications from various vendors running core functions in their company they normally run them in complete silos, using spreadsheets to paper over the disconnects. They have either abandoned their interfaces (we still have not met a company that uses the SF to QB interface successfully) or never even bothered with them. That’s reality.

Salesforce has evidently seen the light themselves. I will hazard the following prediction: Over time SF will sell their standalone CRM to very large companies who have large, direct sales forces, and they will sell an integrated suite to the SMEs of the world. They really have no other choice. They are being surrounded in the SME market by a ton of CRM competitors who have matched their functionality. Add to this NetSuite and SAP’s redesigned Business by Design due out any year now and SF really needs to both differentiate its products from the Zohos of the world and confront the integrated suites as they take market share in a world newly interested in cloud computing.

So bravo to Salesforce.com and the newly minted FinancialForce. It will be a presence in the market, I have no illusions about that. It also validates NetSuite’s long maintained position that an integrated suite is the key to running a better information system and finally a better enterprise.

I read this article yesterday about SAP’s recent update to prospects, analysts and press about their new SaaS offering and it took me a bit to digest. How is this possible that you can screw this up so monstrously when you are one of the largest software vendors in the world?

One reason is that SAP was always an application company and what they know really well are business processes, the backbone of business applications. Thousands of the world’s largest companies run on SAP and you cannot this away from them.  But when you are creating a new SaaS service you have to not only think about the applications, but the database and the overall system architecture differently, and for a company that never ran a data center this was apparently a bridge too far.

But it’s not like SAP was the first into this market. Their were literally dozens of SaaS providers by the time that SAP stepped into the fray. But apparently none of them provided any guidance or wisdom to SAP when they made decisions about how to do a SaaS offering.

That they screwed it up royal is not a joke. It’s a sad truth. Nothing would give the SaaS model more credibility than an offering from SAP. NetSuite’s CEO Zach Nelson has often said that he knew a large competitor would announce a SaaS offering and then fail to deliver, validating the market and then not delivering all in the same graceful fall down the stairs. But, as I was kidding a friend the other day, it’s almost like they are doing it on purpose at this point. By not delivering and having as many issues as they have, are they causing the market to question the viability of SaaS?

Well, that’s madness, plain and simple, but what else can you say about a product launch this poor? It’s hard to compute. But I have learned never to underestimate the sheer arrogance of people, especially after having ridden a 20 year wave of success. Is it possible that we could be wrong? You stop asking this question at some point in the ride that SAP enjoyed.

Was just notified that AMR Research is hosting a Webinar on SaaS ERP with AMR Research Chief Research Officer Bruce Richardson, Commco President and CEO Franklin Christopher – they are a NetSuite customer – and NetSuite CEO Zach Nelson. Should be an interesting hour. You can register here.

I have attended several of these in the past and I always find it interesting to hear how a particular company uses NetSuite for their business. Every company is different and NetSuite has the flexibility to accomodate a great deal of complexity. So if you are thinking that the cloud might be the right place for you, then this might be the right webinar to attend.

The most important question facing the company considering an ERP system, whether it is a replacement or a first time purchase, is ‘Does this system fit my business?’ It is a daunting question to answer, and most companies realize over time that the better question is ‘Is this system flexible enough to meet my business needs, not just today but in the future as well?’ It is impossible to meet all of a company’s needs out of the box, so flexibility is key. I’m sure that in this webinar you will hear a lot about flexibility. I hope you find it an hour well spent.

I thought this was an interesting interview with Zach Nelson, NetSuite’s CEO, in a recent Forbes publication.

The questions were tough and right to the heart of NetSuite’s business and SaaS – software as a service, especially on security.  On several occasions Nelson mentions that the target maket is th 5 million companies in the segment just below the Fortune 500. This might be a ‘bit’ of an exaggeration but we’ll give it to him. These are actually good size companies, most of them. They probably have over 200 employees and several locations, and many of them have of course an employee count in the 1000’s. 

My one question for Nelson, which was not asked, is how NetSuite is going to help to create a SaaS ecosystem in its targeted customer base. For example, if a company is going to use a SaaS ERP and CRM system then you have to expect it is also going to use a SaaS HR System, and a SaaS Supply Chain, etc.. As I wrote recently, NetSuite suffers in my opinion from a lack of competition from other SaaS ERP systems in this market, and helping to create a SaaS ecosystem would be one way to crack this nut.

Of course, it’s a lot easier said than done, as anyone in business knows. There is a lot less collaboration between software firms that have synergistic, as opposed to competitive products, than one would expect. Alliances are difficult to start and often end up creating more problems than they solve. NetSuite has also used some of the proceeds from 2007’s IPO to purchase some products that gave it broader functionality – like OpenAir and QuickArrow, both in the Professional Services Automatoin space. Buy or ally – probably not a question NetSuite or others can answer at this time, and this also makes alliances more difficult. 

At the very least, some of the key SaaS players in various software verticals should really think about creating a unified force. It would be great to see Saleforce.com, SuccessFactors, Taleo, Concur, NetSuite, HelpStream and several others together in a SaaS showplace.