'I still get on the phone for a $5k deal' - NetSuite CEO's anti-SAP mission

SaaS - you're selling to a 30-year-old sales bod

The received wisdom of SaaS companies is they’ve snuck into customers through the browser. Like open source, the easy availability of SaaS has meant companies are using it before those in a position of responsibility know of their existence.

“There was no sneaking in the back door,“ Nelson shoots back. “Dealing with the chief executive or chief financial officer from the beginning is a multi-person decision. [But] the mid-market is the toughest market to sell to on the planet because you are selling to the CEO and you have a 30-year-old sales person who is an expert in their company.”

“[The way] we got into these large enterprise deals was with these partners,” Nelson tells us. “The final tipping point was seeing Accenture and Deloitte build cloud practices. They are well known for SAP and Oracle practices. It says that not just the mid market wants SaaS - it proves the world’s largest companies are interested in SaaS, too.”

In the SAP and Oracle world, consultants were the dreaded black suits, who descend upon ERP and CRM projects to over complicate them and help ensure they run behind schedule and break their estimated budgets. Ellison once mocked “black suits” of IBM while coveting IBM’s consulting business, a business that’s integral in getting Oracle’s ERP to work in individual companies through customisation of modules or workflows.

Whatever the history, the fact that NetSuite is now working with enterprise-grade consultants marks a big departure from where the company began - as a lightweight Javascript front end that was easy to install and use.

It’s also a reality check to supporters of software-as-a-service and those prophesying doom for on-premises software - who have been cheered by the Gartner numbers.

This is a slippery slope for NetSuite, to adopt the tools familiar to Oracle and SAP that have helped cement one less-than-positive aspect of their reputation among customers.

But customisation goes with the territory, according to Nelson. He said the basic version of NetSuite was built to run a software company, and so needs tailoring to verticals such as agriculture or telecoms – where Accenture, for example, happens to have practices. Customisation is done on the business logic, UI and by adding database tablets, he says. “NetSuite has 90 per cent of the functionality needed for their [customers’] business but that last 10 per cent is the last mile,” he says.

The difference, Nelson claims, is Accenture’s Oracle and SAP consultants were experts in the Oracle and SAP software itself - they had to be - but not, he argues, in the customers’ businesses. With NetSuite, consultants need know more about the customers' businesses because the suite doesn’t require a deep understanding of any proprietary languages, APIs or workflows.

NetSuite’s strategy is to have existing customers keep buying while attracting new business. Nelson is also pushing SuiteCommerce, launched last year, with the core ERP suite taking orders from a series of different end points – devices, point of sale, web, Twitter. In this world, NetSuite no longer builds front-ends for each device and screen.

No plans for Windows 8...

In January, NetSuite bought point-of-sale (POS) company Retail Anywhere, which runs on iPhone and iPad devices in addition to traditional retail POS hardware. The software is designed to queue and synchronise retail transactions with a central system and consolidate transactions. Now those transactions will be synchronised and consolidated with NetSuite’s headless ERP system.

The deal gives NetSuite's ERP core a distinct retail twist.

NetSuite also has versions of its apps available for the iPhone and Android, and a project’s underway writing the client UI in HTML5. There are no plans for Windows 8. “Our real focus is to make NetSuite a headlines machine for internal and external users,” Nelson says.

If Nelson is right and core ERP systems are now being replaced, then NetSuite can anticipate growth. But can NetSuite eclipse Salesforce?

Despite the outsized popularity of Salesforce's CEO Marc Benioff, Salesforce is actually still a relatively small firm compared to Oracle and SAP - which count their money in units of tens of billions of dollars. With sales for Salesforce and NetSuite growing at a similar rate - between 30 and 35 per cent annually - there's plenty of opportunity to expand. Further, Nelson argues, it's going to be harder for SAP to expand down into NetSuite's mid-market audience than for NetSuite to move up.

Nelson also reckons he's not lost the common touch that helped him win business in the first place, and helped reassure that SAP customer back in 2005. That will be important as NetSuite grows using the same "black-suited enterprise consultant" technique that helped give ERP its bad name in the first place.

"I still get on the phone for a $5,000 deal," he says. He has to, because those doing the buying are business chiefs who have final sign-off on important IT deals. "You deploy NetSuite in the heart of the business. This is the ultimate CEO app. I spend a lot of time with CEOs," Nelson says. ®