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NetSuite: A Not-So-Quiet Quiet Period
The on-demand provider fills its pre-IPO days with the announcement of SuiteBundler, a feature-and-function packaging system for resellers to maximize delivery of services.
Posted Oct 24, 2007
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SAN FRANCISCO -- As NetSuite wends its way through the "quiet period" leading to its initial public offering, the software-as-a-service (SaaS) provider has now become decidedly less quiet. As part of its Revolution 2007 conference here this week, to an audience of resellers and partners, the San Mateo, Calif.-based vendor introduced SuiteBundler, the newest top layer to its technology stack. SuiteBundler, designed to simplify the packaging and reuse of preconfigured customizations, enables resellers to effortlessly redeploy industry- or vertical-specific features and functions built for one customer to innumerable subsequent customers within a given industry, vertical, or microvertical.

At no extra charge beyond the basic NetSuite subscription, SuiteBundler provides developers with a graphical user interface to select elements and features of a given set of customizations, and enables them to then repackage those selections as importable "bundles" of features that seamlessly integrate with an existing NetSuite account.

NetSuite executives made a running joke of the fact that no one at the company was allowed to make any comments regarding the pending IPO. "We're on file with the SEC. That's all I can say," Zach Nelson, NetSuite's chief executive officer, told the audience. Nelson opened the conference by noting how much the company's partner community has grown since he joined the company six years ago -- from the "40 or 50" partners who attended the first gathering, which, as Nelson gleefully recalled, had been held at Oracle's headquarters, to this week's event, which he noted had "sold out" and included "well over 300 companies."

"There's nothing like face-to-face contact," Nelson told the audience. "Even in an on-demand world."

As part of his welcome address, Nelson also noted the changes that had taken place over the last year -- both at and because of NetSuite. He applauded the resellers in attendance for having picked up the gauntlet NetSuite threw down a year ago with its introduction of development platform SuiteFlex, putting the total number of SuiteFlex partners at over 600. And he recounted the number of "NetSuite replacements" that had taken place, in which NetSuite deployments had displaced competitors' offerings:

  • 2,738 QuickBooks installations
  • 430 Salesforce.com installations
  • 136 Great Plains installations
  • 607 Sage Software installations, a number that led him to cast as "no surprise" the recent forced departure of Sage North America's top two executives.


In addition, Nelson took special note of the replacement of an SAP R/3 ERP implementation at Asahi Kasei Spandex America, a division of the Japan-based $10 Billion Asahi Kasei Group.

These replacements, he said, pointed to a truth that the industry and NetSuite's competitors were apparently loathe to come around to: "Small companies need as much customization as big companies." SuiteBundler, Nelson said, was the "crowning piece" to NetSuite's technology stack, and to the effort to enable resellers and service providers to deliver reusable customizations to multiple customers. "This is the future -- that cost is gone," he said, referring to the price of continual redevelopment. "SaaS provides the platform to serve customers anywhere in the world," he added, and SuiteBundler "fulfills the fantasy of turning one-off [modifications] into reusable software." The shift, he noted, requires service providers to embrace a new approach to relationships: "It's more of a software mentality than a service mentality."

Nelson also addressed resellers' concerns about profitability, and stressed that having redeployable customizations, resellers and partners will be saved the complexity -- and cost -- of dealing with each customer's minute tweaks and demands. "By having a defined product, it's much easier to import than to create," he said. "You're going to make more [money] than we're going to make." Customers, Nelson added, "will pay for increased value," and he positioned SuiteBundler as a way for resellers to deliver that value to more customers.

Nelson took pains to draw a few clear distinctions between his company and Salesforce.com, the firm most often seen as NetSuite's closest competitor. Compared to what he called Salesforce.com's "application development platform," SuiteBundler completes NetSuite's emergence as "a business management platform." And where Nelson characterized Salesforce.com as being focused on the horizontal, netSuite, he said, is all about the vertical -- even the microvertical, such as the various slices of the "services" vertical (software, transportation, consulting, legal, and so on). And, he added, Force.com, SuiteBundler's counterpart at Salesforce.com, lacks the single biggest benefit of SuiteBundler: Referring to Force.com, he said, "There's no application in it."

NetSuite also announced an expanded list of verticals for which the company and its partners have developed offerings -- a list that departs, in places, from the usual suspects:

  • Software
  • Media and Publishing
  • IT Resellers
  • Agriculture Equipment Dealerships
  • Seaport Marina Management
  • Retail (Point of Sale)
  • Franchises for packaging and shipping materials
  • Electronics Wholesale Distribution


The company also announced that three of its solution providers have already leveraged SuiteBundler to deliver add-ons to core NetSuite functionality in the areas of:

  • Fixed Asset Management
  • Tax Automation
  • Warranty Management


Nelson also took the opportunity to reiterate some of the financials that NetSuite included in the S1 document the company filed with the SEC, including the $67.2 million in revenue in fiscal year 2006, and more than 800,000 logins to NetSuite in the most recent quarter. Nelson also giddily showed off his iPhone allowing him what he called "full access" to his NetSuite desktop; he described the origins of NetSuite's mobile-device capability almost as happenstance: NetSuite had built its applications to be "native" to Apple's Safari Web browser, and Apple "just happened" to include a full Safari browser on its iPhone operating system.

With a nod to one of those "future-looking statements" the SEC tends to frown upon, Nelson made a few predictions about the looming development of technology and what it means for resellers and the services industry. Mobile devices are "what's going to happen," he said. "This," he added, holding up his iPhone to the crowd, "will eventually kill the PC."

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