SAN FRANCISCO — In the nine years since its founding, NetSuite, a provider of business management software suites hosted in the cloud, has witnessed firsthand — and benefitted from — the software industry's affair with cloud computing. In the early 2000s, pundits squabbled over the technology's promise, whether enterprises would choose to access their information via a browser instead of through desktop software, if data was truly secure, and, lastly, if it was possible for businesses to make money with software-as-a-service (SaaS).
"Every myth that popped up was soon knocked down," said NetSuite Chief Executive Officer Zach Nelson, at the company's annual SuiteCloud partner conference here last week.
These days, however, an emerging new wave of cloud computing has brought with it a new wave of myths.
At the SuiteCloud '10 event, Nelson dove into these more-recent myths, offering proof points and — introducing Suite Cloud 2.0, NetSuite's newest version of its cloud development platform — NetSuite-specific developments to crush lingering doubts surrounding cloud computing.
The new myths, according to Nelson:
1. Complex processes don't run in the cloud
In fact, Nelson argued, complex processes are actually meant for the cloud. Returning to one of his favorite euphemisms, Nelson evoked the image of a "hairball" — a reference to the complexity created by poorly integrated on-premises software. He said that not only can a complex business untangle its "hairball" of processes in the cloud, but cited return-on-investment figures indicating potential savings of up to two percent of annual revenue by moving to on-demand software. "Managing a global business," Nelson said, "you will never solve the [hairball] problem with a client server."
[Editors' Note: As part of the SuiteCloud '10 festivities, the company even hosted its first-ever "Hairball Awards," recognizing companies that lowered operational costs and boosted employee productivity by replacing legacy systems with NetSuite software. More coverage on the awards can be found at our DestinationCRM Blog.]
This myth also includes the notion that SaaS can be more expensive in the long term. As a counterpoint, one of Nelson's slides showed the experience a particular NetSuite customer: Having previously spent 3 percent of its annual revenue on SAP enterprise resource planning (ERP) software, the company now spends only 1 percent of its revenue on comparable on-demand software from NetSuite.
2. Customization is the Achilles' heel of cloud applications
"There's nothing that drives me crazier than a traditional software vendor saying SaaS applications aren't customizable," Nelson said. In fact, he noted, nearly all NetSuite customers utilize some measure of customization, the top forms of which are:
- custom records
- journal entries
- custom dashboards,
- custom code,
- orders/invoicing, and
Additionally, NetSuite recently unveiled SuiteFlow, a new product currently in Beta that aims to make customization even easier. With SuiteFlow, which offers what NetSuite calls a "code-less" application workflow development environment, companies can create applications to sit on top of an existing enterprisewide software suite. A lead-nurturing program, for example, could extend from marketing to sales and all the way to order management.
Customization control also allows partners to create vertical-specific applications. Nelson brought partner Iron Solutions on stage to demonstrate — on a new Apple iPad tablet — its work for customer New Holland, an agricultural-equipment company. With the Iron Solutions application, New Holland is able to connect with its network of dealers and manufacturers, as well as farmers and contractors that need new equipment. The end-to-end partner-built solution enables agricultural-manufacturing companies to streamline the process from inquiry to order.
Agricultural equipment is one of 20 new vertical and horizontal applications included in SuiteCloud 2.0.
3. Channels don't exist for cloud applications
Not only did Nelson dispute this myth outright, but he also predicted that the channels will produce the next wave of innovation. "I think some of the most exciting things you will see will be in the channels," he said, before announcing a NetSuite partnership that will enable developers to bring NetSuite business solutions into GenPact's business process management environment.
According to Evan Goldberg, NetSuite's founder and chief technology officer, NetSuite is so serious about channel sales that it increased employees by 40 percent in that area and is adding NetSuite account managers to the channel for added support. NetSuite is also adding an accounting channel as well as expanding its presence with channel-exclusive coverage models in the Asia-Pacific region.
As Beagle Research Group Managing Principal Denis Pombriant points out in a blogpost, NetSuite is in a different position than other cloud-based CRM vendors in that it is primarily an ERP solution provider. "In ERP, the non-cloud competition is slinging the same mud that we saw in CRM a little while ago," Pombriant writes, speculating on Nelson's aim in quieting the backtalk. "It was refreshing to hear Nelson take on the challenges one by one, offering plenty of data to confront the noise."
After dispelling the aforementioned myths, Nelson announced Cloud-to-Cloud Integration with Amazon.com's Amazon Web Services. The integration means Single Sign-On Authentication and rids businesses of what Nelson called "islands of functionality." NetSuite intends to utilize the integration to push work with systems integrators as well as new partnerships and practices with companies such as Fujitsu and Wipro.
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