“Unlimited” rules at NetSuite’s first all-customer event

Zach Nelson NetSuite

NetSuite CEO Zach Nelson

For most of its history, cloud-based ERP vendor NetSuite has been focused on what it likes to call “the Fortune Five Million” – that is to say, the SMB market.

But at SuiteWorld, the company’s first all-in user conference, the company declared its intentions to look up… waaaay up the corporate rankings.

Zach Nelson, CEO of NetSuite, introduced NetSuite Unlimited – a version of its cloud-based systems for the world’s largest businesses.

To support that Unlimited vision – which starts at $1 million per month and ramps up from there based on desired modules and functionality – the company has announced new partnerships with large system integrators, among them Accenture.

Nelson, announcing the company’s first joint with Accenture on Qualcomm’s subsidiaries, said the drive into the high end of the market was not to the detriment of its heritage of SMB customers, and said it wasn’t lost on him that he was talking about big enterprises in a room full of the company’s core of SMB customers. So what changed? Nothing, except perhaps NetSuite’s self-awareness, according to Nelson.

“Our foundation has always been the small and midsize customers, but we underestimated the power of our solution,” he said.

NetSuite began waking up to just how badly it had missed the mark, he said, with the launch of OneWorld about two years ago. The product promises ease of integration across national borders, giving subsidiaries a localized view of the business but rolling up all of the numbers to headquarters.

And as bigger customers started talking to NetSuite, so too did larger system integrators. “We haven’t changed our channel program at all,” Nelson said. “These guys that we’ve introduced this year, we didn’t change anything for them. What changed is the market.”

In fact, the channel is on a growth spurt within the company – accounting for 40 per cent of Q1 revenue books for NetSuite. In 2010, that number was 32 per cent, and the year before that 23 per cent.

The enterprise focus should be a good thing for the company’s partners, Nelson suggested, because by moving from the SMB world into the enterprise, he’s avoiding the challenges that face his competitors coming down from the enterprise.

“Every time I sell upmarket, my margins expand. Every time SAP comes down-market, their margins compact,” he said. It wouldn’t be a NetSuite event, after all, without a little bit of gratuitous competitor bashing.

If SMB has been the foundation of the NetSuite house as Nelson asserts, then the enterprise is the new top storey. But it will benefit from the approach the company took with its SMB products, particularly because in Nelson’s estimation “the toughest thing to add after the fact is ease-of-use, and that’s been the design centre for our products back to the NetLedger days.”

Also under the “unlimited” announcements, Nelson disclosed plans to introduce Oracle’s Exadata and Exalogic high-end systems into its data centre – no surprise since Nelson and CTO Evan Goldberg are ex-Oracle, and Larry Ellison was a major early-days investor in NetSuite. What was a surprise, perhaps, was the presence of Oracle president Mark Hurd on the keynote stage to herald the NetSuite announcement.

“If you’re a customer of NetSuite, you’re also a customer of Oracle,” Hurd said.

The declaration was met with mixed emotions amongst the SuiteWorld crowd.