NetSuite CEO talks Oracle, SAP and company growth plans

Summary:Netsuite's CEO suggested that "the big idea no one has done is to build an application designed to run a business," adding most of them are designed to run departments.

SAN FRANCISCO -- NetSuite CEO Zach Nelson had strong words about where the business software company stands in the mid-market but also acknowledged where it needs to grow.

Speaking at the 2013 Goldman Sachs Technology and Internet Conference on Wednesday afternoon, Nelson specified there are two things driving growth for NetSuite.

For one, he said, NetSuite sells to larger companies. But more interestingly, he continued, is the mid-market where he argued that "companies are valuing the technology we're delivering and the way we deliver it more compared to three years ago."

"In the mid-market, it's NetSuite as the far as the eye can see," Nelson boasted. He suggested that Oracle could build a similar infrastructure, but SAP has already failed.

Reflecting he assumes that NetSuite is "the first cloud software company ever founded," Nelson suggested that "the big idea no one has done is to build an application designed to run a business," adding most of them are designed to run departments.

"We're doing quite well, and this is the beginning of it," Nelson affirmed, adding that's because "we're essentially Oracle's and SAP's largest customers in that way," positing "that's a good sign this approach is going to work across the board."

Nelson explained that "if you look at large enterprises spending millions on SAP and Oracle, they're spending on the top tiers," but there are still "hundreds of steps below that." That's where NetSuite comes in, he went further, with two-tier enterprise resource planning (ERP) deployments.

The chief executive said that this approach removes the "Tower of Babel" in which companies have varying back-office systems all over the world and replaces it with a common platform in local currency, but still unified worldwide.

Citing that NetSuite sells to the "Fortune 5 Million," Nelson highlighted e-commerce, in particular, as the newest horizontal driving growth for the integrated software suite.

Nevertheless, Nelson admitted that NetSuite has been "capacity-constrained" for the last two years, following up that means the company is not meeting demand. Thus, Nelson outlined four objectives for NetSuite going forward:

  • How do we grow at 30 percent or more for a long time?
  • Focusing investment in three core product areas: OneWorld cloud ERP solutions, SuiteCommerce ("Commerce-as-a-Service" delivered via the cloud), and deeper functionality in billing
  • Brand advertising worldwide
  • Incremental investment in customer success -- especially large corporate customers

He added that we're also going to see NetSuite "double-down" on deployments with global technology and consulting firms, such as Accenture and Deloitte.

On the competition, Nelson was fairly blunt, asserting that Microsoft doesn't even mention ERP while Sage has a different set of problems -- specifically that it doesn't "have a way to get to the cloud efficiently." Other mid-market players, he concluded, have disappeared into private equity companies.

"In the mid-market, it's NetSuite as the far as the eye can see," Nelson boasted. He suggested that Oracle could build a similar infrastructure, but SAP has already failed.

For SAP, Nelson continued, the bigger issue is the business model, which he remarked doesn't allow them to make the transition that NetSuite has made. As NetSuite has "moved up market," Nelson described that he sees corporations with "huge SAP deployments" worth millions, and they're still using Excel to run a business.

He said simply that he finds this "shocking," boasting later that "we're bringing enormous value at a fraction of the cost of SAP."

More coverage from the 2013 Goldman Sachs Technology and Internet Conference:

Topics: Tech Industry, E-Commerce, Enterprise 2.0, Enterprise Software, Software Development

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.