A Clear Sign of Hosted CRM Success

NetSuite yesterday kicked off its annual partner conference, at Oracle's headquarters, to educate, motivate, and celebrate its partners. About 200 consultants and resellers attended. In his opening address President and CEO Zach Nelson trumpeted the company's latest successes and its future plans. Last quarter represented the company's first sequential growth, from Q4 2003 to Q1 2004, which Nelson said is an early indication that NetSuite will beat 2003's growth rate. In 2003 NetSuite's overall revenue jumped 300 percent, a growth rate Nelson says is largely attributable to its reseller channel. Channel-generated revenues also grew 300 percent. This growth marks a new milestone in the company's five-year history. Not only has the channel contributed to NetSuite's customer acquisition efforts, it also improved NetSuite's customer retention efforts. According to Nelson, annual customer retention rates from direct sales efforts are roughly 75 percent, whereas the retention rate from channel partners providing services is 84 percent. "This stuff is not hocus-pocus. It's reality today," said Barton Goldenberg, president of ISM Consulting, who took the podium after Nelson. "Talking to the customer out of the same side of your mouth all the time--that's real," he added, referring to the ability to deliver a consistent message to customers across the enterprise. Although Goldenberg acknowledged that licensed software vendors have lowered their implementation costs, he said that it's not enough to retain customers: "People just didn't enjoy being screwed. That's the best way I can put it. Then, the ASP industry came along." CRM application service providers like NetSuite and Salesforce.com bring enterprise functionality to the market at a fixed monthly cost. "What executive wouldn't want a real-time dashboard? With a real-time enterprise, the moment you have a shift in demand you know about it on the supply side," Goldenberg said. Following Goldenberg's presentation, Stephen Wolfe, NetSuite's senior vice president of product management, gave partners a sneak peak at what's to come later this year, such as availability in multiple languages, service company features (time-tracking, job-cost analysis, as well as job-record and access time), team selling, and corporate account management to accommodate incentives and payment plans for multiple salespeople working on the same project. Wolfe also presented features debuting this weekend. For example, users will be able to create reports from scratch with the product's ad-hoc reporting capabilities. Users will also have advanced forecasting and enhanced sales pipeline visibility. Version 10.0, which will be released in the second half of this year, will include several new upgrades, such as an offline client designed for field sales professionals, as well as advanced analytics capabilities that integrate with analytics applications from companies like Crystal Decisions, which was acquired by Business Objects earlier this year.