Special Report: NetSuite's kung fu fighting talk

20th Jun 2007

Stuart Lauchlan

By Stuart Lauchlan, news and analysis editor

Last year NetSuite upped its marketing ante with a witty mickey take of Star Wars – featuring the evil Darth New Kid who bore an uncanny resemblance to rival Marc Benioff of This week’s launch of NetSuite 2007 in London saw another entertainment theme in play, this time the 1970s US TV series Kung Fu.

Mysticism is rather more the bent of Benioff, while eastern philosophies have long informed the combative strategies of Oracle’s Larry Ellison, but NetSuite CEO Zach Nelson was quick to note: “We’re not really a typical Zen company.”

This was the first time that a NetSuite release had premiered outside of the US. The new version has three main planks: Easy ERP, Global CRM and SuiteAnalytics. "Easy ERP is something of an oxymoron,” said Nelson. “We’ve introduced Netsuite assistants for set up, data import, matrix items, forms, e-commerce set up and e-commerce content.”

"To date there has been no real global control over CRM. What multinationals need is to manage subsidiaries of firms in a single instance of NetSuite. You can have hierarchical view of the organisation in real time. We also have a single data model so we have single data warehouse sitting under NetSuite and added more and more layers of BI functionality to the products. Our first dashboard had pre-canned KPIs. In 2004 we let third party BI tools link to it. In 2005, we added on-demand dashboard alerts. Now we’re announcing abilty to embed any formula you like into the applications so that you can do excel–like calculations."

It’s all about adjusting the balance between power and ease. "Power and ease have often been in conflict in business software," said Nelson. "If you look at the high end of market, it’s about adding power to manage multinational companies. It’s about complex management. At the lower end it’s all about ease of use. Users aren’t comfortable about using those high end applications. In many cases this enforces bad accounting practices. It sometimes doesn’t support your complex business needs. Technology is shifting the balance of power and ease. People often think that the business processes of an SME are not as complex as those of large organisations, but that’s not actually the case."

Public enemy number one

Nelson turned his attention to other vendors to illustrate that some represented power and some ease. “SAP is characterised by lot of power and not so much ease,” he said. “[Former technology leader] Shai Agassi in 2005 said that companies wouldn’t be willing to pit core business processes out on the internet and that software as a service would not effect core operating processes. Funnily enough he’s not with the company any more. They did some market research outside of Bavaria and their CEO said that they would use All In One. Shortly after, they said that the top secret A1s would be delivered on demand and that it would be delivered this year, although that’s slipped. Now it’s changed from being all new code to the old code base.

"To date there has been no real global control over CRM. What multinationals need is to manage subsidiaries of firms in a single instance of NetSuite." Zach Nelson, CEO, NetSuite

“On the other hand, is ease without power. It makes some parts of salesforce automation (SFA) easy, but SFA is only one part of the business. The real flaw is the concept of web services. Web services are supposed to solve every possible problem. can’t even couple its own processes. If a representative wants to process an order, they type the order in Word, print their order, then walk to finance, leave in basket, where someone finds it and then retypes it in Oracle. But is consistent to its message of the death of software – there’s no software involved in the process whatsoever.”

The most scathing criticism was reserved for Sage, NetSuite’s ‘public enemy number one’. “The Sage business model is to buy lots of products, then live on the maintenance revenue from them. But that means they have so many code bases that they can’t really innovate on any one. You can see how many accounting code bases they have, or how many sales. Sage can’t integrate Line 500 into its own CRM products. Even within its own product sets, there are completely separate code bases. It’s as easy to move from Line 50 to Netsuite as it is to move to Line 100. Oracle putting millions of dollars to develop Fusion to pull together its code bases, but there’s nothing like that going on in Sage.

“The Netsuite approach was to build an integrated suite from the start. It’s a single database – not one each for e-commerce, CRM and ERP. It completely delivere on demand.”

Entering the mainstream

So what do the punters think? ACAL Plc is one of the early adopters of NetSuite 2007. Steve Carr, sales and marketing director, ACAL Plc, said: “One of the interesting things to us is the globalisation. We wanted sales guy to have full access. We wanted it to be a sales aid. We run six different sales teams so we needed to customise the system to be able to do all the forecasting together. We wanted to be able to track all the sales teams. We wanted to share information. All the sales teams had ability to share information across all the sales teams. Each national instance will look identical. From sales guys viewpoint we wanted to be easy to use. Some of the guys aren’t particularly IT literate. It’s going well.”

"We looked at other packages that dragged data together. For a business our size, you just can’t justify the expense for what we needed. We’re finalising roll out of NetSuite now.” Steve Ratcliffe, commercial director, Wolsey Securities

Carphone Warehouse/Opal is one of the biggest NetSuite users. “We offer services such as residential, broadband and we have business customers like Man United,” said Marie Vernon, head of customer services at Carphone Warehouse/Opal. “We have customers large and small coming to us with issues relating to service. We’ve been using NetSuite for four years. Prior to that we had a standard desktop application. We first used NetSuite for integration with faults reporting. We have gone from 40-50 users to 2,000 agents in call centres. Sometimes I feel we’ve taken NetSuite to another stage. TalkTalk has its own implementation so we have two versions talking to one another. If it wasn’t for NetSuite and web services I’d need around 500 people – but we’ve been able to keep headcount down.”

Steve Ratcliffe, commercial director at Wolsey Securities, has done a great deal of customisation to NetSuite. “We’re a specialist investor in house building. Most NetSuite customers sell things. We don’t. But we have vested interest in ensuring that our partners are able to sell houses, that’s how we get our money back. I come from house building background. In 1994, we started out looking for an accounting system, but needed metrics. We never expected people to be that close to the data. We bought various packages, none of which spoke to one another. We looked at other packages that dragged data together. For a business our size, you just can’t justify the expense for what we needed. We’re finalising roll out of NetSuite now.”

NetSuite argues that SaaS is now entering the mainstream. “Initially SaaS came in to organisations as something that IT didn’t want to do but people needed the functionality,” said David Bradshaw, principal analyst at Ovum. "Now it’s becoming a strategic decision and IT is getting involved in the buying process. IT departments were initially defensive, but lately they’ve been saying that if someone can bring in functionality and we can have it up and running quickly then it’s one less piece of hassle for us.”

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