NetSuite looks to provide home for cloud-hungry Sage partners

Published: May 17th, 2012

SAN FRANCISCO – NetSuite Inc. (NYSE: N) grew its channel business by 50 per cent in 2011, and channel chief Craig West says he’s hoping for continued growth as partners dissatisfied with the cloud direction of vendors such as Microsoft Corp. and Sage Software Inc. begin to look for alternatives.

West, vice-president of channel sales for the cloud-based enterprise resource planning (ERP) software vendor, said they’re seeing three discrete types of partners migrating to NetSuite. The first is traditional midmarket value-added resellers (VARs) with strong ERP competencies, their traditional bread and butter. The second are former Microsoft partners.

“We’ve seen a really significant uptick in folks from the Microsoft community coming to us this year,” said West. “The (Microsoft Dynamics Master VAR Program) disintermediated a lot of mid-tier VARs in their program.”

The most interest in NetSuite today though, said West, is coming from Sage partners.

“That’s the community that seems to have suddenly fallen beyond the point of no return in waiting for the vendor to deliver cloud solutions they can represent. There’s nobody I talk to more than Sage partners right now,” said West “There’s a lot of decision-making that has a lot of Sage partners scratching their heads.”

One Sage partner that has recently signed with NetSuite is Axis Global Partners, a Florida-based partner with offices in Toronto and Ottawa. Manny Buigas, an Axis principal, said they’ve been a Sage partner for over 15 years and will continue to offer Sage’s Accpac and Pro ERP offerings for customers looking for on-premise solutions. But with more and more customers looking for cloud options, he said adding NetSuite to their portfolio just made sense.

“To be successful you have to listen to your clients and be where they want to be. We’re following the demand,” said Buigas, saying while Microsoft used to be their biggest competitor, today more and more its cloud-based solutions. “We wanted to extend our offerings so we didn’t have to say no to anyone. Some of the people coming into the market are only looking for (cloud-based) products, and if you don’t have it you’re not in the game.”

NetSuite recently completed a North American partner roadshow designed to identify five to eight potential Sage or Microsoft partner recruits in each city, with stops in Vancouver and Toronto. West said the two Canadian stops were among the best attended, with a lot of Sage attendees.

He’s hopeful a few partners will be signed through those events. NetSuite has six to eight partners in the Toronto-area already but Vancouver is a greenfield opportunity. NetSuite has around 15 partners in Canada, up from about 12 a year ago, and 150 or so worldwide. He added recruiting experienced ERP partners is a key part of his channel growth strategy.

“We find it’s very difficult to enable on core ERP competencies. We need firms that know how to do these projects, such as how you extract data from an old system,” said West. “We’re investing in enablement. We can take folks that know how to do these projects and make them NetSuite experts in no time.”

Time from partner signing to first sale has been dropping since NetSuite launched new onboarding and enablement tools last year, and West said his team grew by 100 per cent last year to better support the channel, hiring new relationship managers and tactical deal supports.

About 40 per cent of NetSuite’s new recurring revenue came through the channel in 2011, as did about 40 per cent of NetSuite’s overall revenue in the first quarter. That’s the same percentage as one year ago, but West noted that the overall pie has also gotten bigger. Business overall grew by 32 per cent, while channel business grew by 50 per cent.

“I don’t know if we have a goal (for channel centricity), we’re just trying to maximize and optimize the channel. We believe firmly our hybrid go to market strategy,” said West. “My goal is to make it as big as I can on the partner side. I’m looking at where we have white space in geographies, and for great opportunities like with the Microsoft and Sage communities.”

Follow Jeff Jedras on Twitter: @JeffJedrasCDN.

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