NetSuite aims for SAP's manufacturing heart

NetSuite aims for SAP's manufacturing heart

Summary: NetSuite CEO Zach Nelson's grand plan: Allow SAP to talk about databases, HANA analytics and its cloud efforts, while he aims to grab the application giant's core industries, notably manufacturing.

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SAN JOSE---NetSuite CEO Zach Nelson quipped that "while SAP is talking databases" customers are more interested in deployment time, agility and the flexibility needed as product companies increasingly look like services outfits and vice versa. NetSuite's next frontier: Manufacturing, which accounts for a big chunk of SAP's revenue.

The upshot is that Nelson's grand plan is to allow SAP to talk about databases, HANA analytics and its cloud efforts while he aims to grab the application giant's core industries, notably manufacturing. Nelson, along with Roman Bukary, vice president of manufacturing and distribution at NetSuite, positioned manufacturing as a natural fit for the cloud approach.

"When you look at the speed to market pressures manufacturers face the cloud becomes a natural way to run the business," said Bukary at a press conference. "The cloud is a natural way for manufacturing due to market pressure not because NetSuite says so."

Dueling enterprise software vendors: NetSuite partners with CapGemini, Autodesk, eyes manufacturing companies | At SAP Sapphire, co-CEO McDermott plays ball with customers | SAP bets big on the cloud, unifies under 'HANA Cloud Platform' | SAP introduces Mobile Secure; mobile device management

NetSuite's San Jose customer powwow was at a smaller scale relative to SAP's Sapphire event, but it's worth noting the duel. Andrew Nusca highlighted how SAP co-CEO Bill McDermott was positioning the company for the future. Consider it a hipper SAP if you will.

Nelson outlined NetSuite for manufacturing at his keynote in San Jose. "The last industry moving to the cloud is manufacturing," said Nelson.

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The upshot is that NetSuite is partnering with Autodesk `to target manufacturers. Nelson also pitched an architecture that will integrate a messy global supply chain, connect various partners and then integrate SuiteCommerce to transact with consumers and suppliers.

The rather messy view of global manufacturing goes like this:

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"There's a sea change in manufacturing. Not everything will be outsourced anymore. You see things coming back onshore. 3D printing changes things," said Nelson. "These trends will drive new approaches in manufacturing. Manufacturing is a massive hairball."

With various tools ranging from unified billing to aggregate services, subscription and product based billing cycles to a two-year effort to roll out NetSuite for manufacturing, Nelson is going for SAP's heart.

Here's a look at SAP's revenue by industry for 2012.

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Before today, NetSuite was largely targeting services companies as well as retailers. That left manufacturing largely to SAP. NetSuite's Nelson introduced its first manufacturing customer with Memjet, a printer head company.

Martin Hambalek, director of IT at Memjet, used to implement SAP. Naturally, Hambalek pitched the cloud and time to deploy.

As for NetSuite's latest efforts to target companies that make products, Nelson said that the company is specifically looking at discrete manufacturing. Discrete manufacturing refers to companies that make actual products such as components, devices and sporting goods.

Nelson added that manufacturing is "the last industry we'll add for a while."

To target manufacturing, NetSuite has tripled its outlay for development over the last three years, said Nelson. 

What's notable is that if NetSuite happens to get traction in manufacturing it could force SAP to play defense. SAP would laugh off that notion today. After all, NetSuite's manufacturing efforts will take a few years to pay off. In the end, Nelson is planning to make SAP sweat.

Topics: Enterprise Software, Cloud, SAP

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