NetSuite drops bombs and pushes new channel models

Published: April 15th, 2010

SAN FRANCISCO – NetSuite Inc. (NYSE: N) CEO Zach Nelson dropped a lot of bombs against competitors last night at the start of his company’s SuiteCloud channel conference. No vendor was safe; as Nelson determined that high profile software developers such as SAP AG (NYSE: SAP) and Microsoft Corp. (NASDAQ: MSFT) had fake clouds, while NetSuite had the real cloud.

However, Nelson also backed up his aggressive approach with some significant developments. The software-as-a-service (SaaS) pioneer announced new partnerships with Google Inc. (NASDAQ: GOOG) and the Amazon Web Services along with version management services for the cloud. For the channel business, NetSuite unveiled new strategies for the system integrator (SI), OEM, ISV and business process outsourcing channels.

“A year ago, we introduced SuiteCloud and new applications and are partner momentum have taken hold. But it’s been driven by the cloud computing market, where the cloud intersects telephony and computing with mobility, business computing and social networking. They’re all making their way into business and all these pieces are coming together,” Nelson said.

While NetSuite can only boast 200 business partners it has grown its channel business by 40 per cent, year over year.

The vendor has announced new initiatives for expanding its SI channel, a partner area that was basically ignored. Nelson said SIs didn’t embrace SaaS because it eliminated services opportunity. NetSuite has signed SIs such as Hein & Associates, Fujitsu Japan and Wipro. Wipro is building a global practice around NetSuite’s OneWorld solution.

GenPact was signed in the business process outsourcing channel. GenPact will build ERP outsourcing solutions on NetSuite.

One partner that is focusing on building vertical OEM white label applications on top of NetSuite is IronSolutions. Darwin Melnyk, CEO of IronSolutions, said his company created a vertical application for searching agricultural equipment online for its client New Holland Agriculture. New Holland has many equipment dealers who remarket used equipment along with new farming vehicles.

Besides the search tool, Iron Solutions built IronBuilder, a branded solution on top of NetSuite CRM that will be used by New Holland customers as a configuration tool that pulls data from an ERP system and enables them to price new and used products for sale.

David Greenberg, senior director of marketing for New Holland, said the company developed a mission and strategy to rebuild its Web presence. The goal, he said, was to drive customers to the Web site, use the IronBuilder configurator for pricing, capture leads, bring customers into the dealerships and close business.

“In the past, customers would manage equipment on an Excel spreadsheet or a yellow pad. They needed a tool that would raise a new approach to business that would help them compete on an aggressive level,” Greenberg said.

Melnyk’s team also developed customized applications such as Digital Dealer and IronGuide that appraise trade-ins. Greenberg added that Iron Solutions customized applications has led to 200 new customers with over 700 seats.

Nelson said that there are more exciting areas in SaaS for the channel to innovate than any other.

Version management for the cloud will enable channel partners to distribute customized applications to customers through NetSuite. These customizable solutions can be replicated for other customers and now these partners will be able to easily update or replace through the Version Management tool.

Nelson said this will help partners to focus on building vertical versions of NetSuite. The company is looking for more partners who are able to provide vertical solutions. “Businesses are specific like media and publishing and they need a different version of the software than a software company would. We address those vertical environments,” he said.

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