• February 12, 2009
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

NetSuite Retails a New Offering

It's starting to shape up as a busy announcement season, and NetSuite has just had its say. The midmarket software-as-a-service (SaaS) provider delivered a handful of notices this week; chief among them were the company's financial results for the fourth quarter and fiscal year 2008, and the North America launch of NetSuite Multi-Channel Retail Management Suite.

In what NetSuite executives described as a bottom-line surprise, the company managed to squeak out a non-GAAP profit of $534,000 for the fourth quarter -- or what amounts to a penny per share. This compares to a non-GAAP net loss of $1.7 million (3 cents per share) for the third quarter of 2008 and a non-GAAP net loss of $842,000 ($0.01 per share) for the fourth quarter of 2007, according to the company's statement. The company also improved its full-year results, reducing its non-GAAP net loss by 56 percent, from $5.7 million (10 cents per share) in 2007 to $2.5 million (4 cents per share) this year.

On a GAAP basis, however, even the company's slim fourth-quarter profit vaporizes: Net loss for the quarter was 7 cents per share, compared to a loss of $3.3 million (22 cents per share) in the year-ago quarter; net loss for the year was $15.9 million (26 cents per share).

"This is a strong performance in any quarter, and is especially impressive with business spending on equipment and software falling 27.8 percent -- the worst in a half century," said Zach Nelson, NetSuite's chief executive officer, in a statement. "Our strategy of providing an integrated suite of applications delivered on demand to small- and medium-sized businesses is even more applicable in times when cost-reduction and productivity improvements are necessary for survival."

One thing NetSuite is hoping will continue to grow its business is the introduction of NetSuite Multi-Channel Retail Management Suite (MCRMS), a vertical-specific version of the company's business management system for North American retailers. Expanding on NetSuite's prior offering for e-commerce, the new product lets retailers integrate e-commerce with point-of-service (POS) systems at multiple locations, courtesy of an integration built by NetSuite partner OnSite. As an integrated suite, MCMRS unifies inventory management, orders, customers, accounting, marketing, POS, and customer support across all channels, according to the company. Furthermore, MCRMS is intended to improve customer experience, and provide business intelligence through real-time visibility.

"In the current challenging environment, superior support for cross-channel activities can help retailers win customers and take market share from competitors -- retail Shangri-La in this difficult economy," wrote Janet Suleski, research director for retail with analyst firm AMR Research, in a summary article.

NetSuite quoted AMR's figures that only 30 percent of retailers have tight integration between cross-channel and merchandising systems, while just 5 percent boast well-integrated cross-channel loyalty services. In her summary article, Suleski noted the opportunity for improvement, and the new release's potential: "NetSuite is a welcome addition to the field of technology providers exploring the best ways to unify channels and provide complete visibility to customer activity as the mechanism for providing the best possible service."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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