Cloud-based ERP software vendor NetSuite has been working with solution providers for a decade, but Craig West, the company’s channel chief, says the market is still in the early innings of the cloud game.
West made the comments kicking off the partner general session at the company’s SuiteWorld 2013 conference in San Jose, bringing together some 700 of the company’s channel partners.
“All of you here, you’ve got some investment in the cloud, whether it’s been 10 years, 10 months, or 10 days,” West said. “But the reality is, it is still crazy early in this adoption curve. You may feel like it’s long overdue, but you’re still way ahead.”
But West believes the company, and its partners are at an inflection point. Sharing results of KPMG study on enterprise attitudes towards the cloud, he suggested that while NetSuite, as a cloud-based app, is on the radar of the 42 percent of companies that have already bought into cloud-based applications, there’s a group that’s almost as large that’s set to take its first steps into the cloud over the next 18 months.
“Ten years of doing this has gotten us to 42 percent, so it’s exciting that another 18 months could get us another 35,” West said.
That means that three quarters of organizations have either gone to the cloud, or are seriously considering it, and NetSuite partners report that growing acceptance has changed how they approach their businesses.
“The market has completely turned around, from one where we had to beg just to be there, to one where we’re welcomed to talk about the value of the cloud and the solutions we’re offering,” said Todd Fitzwater, principal of Los Gatos, Calif.-based Demand Solutions Group, a NetSuite partner. “We used to have to spend so much time justifying cloud solutions. But now, when you go to the table, it’s because you’re asked to be there, and if you sit at the table with an on-premise provider, you’re surprised.”
VJ Africa, director of Singapore-based PGE Solutions, was even more succinct, saying that “mentioning cloud used to be the quickest way to be kicked out of a sales meeting” in Asia, but thanks to a view “visionary customers,” that is no longer the case.
NetSuite has also been investing in its channel, as West said the company has upped its partner sales rep headcount by 83 per cent, and introduced the new role of associate channel manager, whose role is to focus on partner service levels. The company has introduced 50 new channel-related marketing campaigns, and launched an RFP Desk to help partners on bigger bids. And soon, West said, the company will provide its InsideView social sharing for ERP software free to all of its solution providers.
The company does not disclose its direct/channel sales mix, but CEO Zach Nelson provided some clues Tuesday, saying that although he does not believe any software company that started out direct will ever reach a 50/50 mix, “we’re getting pretty darned close to 50/50 in terms of new bookings.”
But Nelson reiterated his belief that it’s not the vendor’s job to provide leads to channel partners, saying he firmly believes that “whoever finds the deer, kills the deer and eats the deer.” He said the company has mechanisms to manage channel conflict, but that if all parties are playing smartly, channel conflict is minimized by the sheer nature of the market on which NetSuite is focused. The company likes to say its ERP offerings were designed “for the Fortune Five Million,” although they have grown up into the enterprise space as well.
“When you’ve got five million deer out there, and you’re running into each other on a specific hunt, someone’s doing something wrong,” Nelson said, continuing his hunting analogy.