NetSuite eyes Europe expansion

A partnership with Capgemini and a new head for its EMEA business highlights how NetSuite is planning to expand two-tier ERP in Europe.

SAN JOSE---NetSuite's partnership with system integrator Capgemini is about targeting Europe as much as it is garnering large enterprise know-how.

On Tuesday, NetSuite outlined a partnership with Capgemini to implement and integrate cloud enterprise resource planning software and the business processes that go with them. The two companies will push so-called two-tier ERP, which revolves around layering NetSuite on top of existing systems from the likes of SAP and Oracle.


Jim McGeever, chief operating officer of NetSuite, said the company has operations in Europe including the United Kingdom, but has chosen to focus on opportunities in the Americas primarily.

"What you'll see now is a significant investment in international operations. In mainland Europe we're going after companies headquartered there. Capgemini is a key piece of that."

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As NetSuite increasingly moves to target larger companies, it'll inevitably run into large multinational corporations. Many cloud vendors are targeting Europe as a key growth market as they try to take on SAP on its home turf.

Indeed, NetSuite on May 9 named Peter Daffern as president of EMEA at the company. Daffern will be in charge of direct and channel sales efforts as well as EMEA operations.

McGeever noted that global companies in Europe and elsewhere have to change the way they operate to be nimble.

The challenge for NetSuite is that it has to pitch European companies that have been resistant to cloud computing relative to firms in the U.S. NetSuite also has to garner more of its revenue from international customers.

NetSuite's regulatory filings with the Securities and Exchange Commission highlight the international challenges. For the three months ended March 31, NetSuite derived 26 percent of its revenue from international customers. That tally was down from 27 percent a year ago.

For comparison, Salesforce garnered 32 percent of its revenue from international companies. Specifically, Salesforce got 17 percent of its revenue from Europe for the year ended Jan. 31.

Like NetSuite, Salesforce has noted that it has plans to expand international sales efforts.