Jim McGeever, former President of NetSuite, now EVP of that global business unit at Oracle joked things had changed significantly after it invested over $ 9 billion to acquire NetSuite. “SuiteWorld has moved to Las Vegas, our safe harbor statement is much shorter…”.
Actually, the message at this week’s SuiteWorld event was things will remain the same, but with lots more investment from a rich benefactor especially to expand global reach. McGeever said he had been told to ignore calls from other Oracle units unless they specifically benefited NetSuite. Mark Hurd, CEO of Oracle confirmed “we have 140K employees at Oracle. Their job is to stay out of the way of NetSuite”
In q&a session after another with analysts (NetSuite did a nice job organizing several thematic sessions) the executives were confident and handled our questions openly.
The “more, better, forever” expectations Hurd has set for NetSuite became clear in a slew of announcements
- 13 new field offices around world going from 10 to 23, with 50% more headcount
- Leveraging Oracle’s network of global data centers, NetSuite will grow from five data centers to 11.
- More development centers – new ones in Argentina, India, China and Japan
- Lots of pleas for employee referrals – “we are hiring!”
- More verticals. In his keynote, NetSuite founder Evan Goldberg presented updates on verticals they have been maturing for a while including Retail & Distribution (and adjacent ones like Fashion and Apparel), Software (with emphasis on billing and revenue recognition as ASC 606 standards kick in), Manufacturing (especially high-tech with contract manufacturing needs and related multiple layers of Bills of Material), Services and Nonprofit. In a slide, Hurd also announced new aspirational ones including Financial Services and Ad Agencies
- Introduction of SuitePeople, a realization of its HCM vision that began with the acquisition of TribeHR a few years ago.
- Introduction of SuiteSuccess – a framework for ensuring customer success by incorporating their functional requirements into product features and methodologies to guide implementation success.
Let’s be realistic though. The acquisition only closed a few months ago. The “more” will manifest itself in many other areas going forward
- Clarity in how global functionality will roll out. In the past customers like Groupon and American Express Global Travel have dictated countries for which NetSuite needed to prioritize functionality. Going forward NetSuite will have more proactive scheduling of country support. The rollout schedule (we heard a few variations during the event) should become clearer over the next few quarters, as will leverage of partners like Celergo for global payroll functionality.
- Leverage of functionality across verticals. One area which got significant focus during the event was on the billing functionality, but today it is aimed on the SaaS vendor sector (and there at relatively uncomplicated, early adopters). In the future, as NetSuite expands its industry footprint it will have to tackle pricing/promotion/dimensional complexities in CPG and fashion industries. If it decides to go after Utilities or Telcos, it will have to address scale and complexity of the billing engines unique to those markets.
- More refined Oracle thinking around “two-tier ERP”. It’s a concept multinationals have long implemented on their own – an Oracle or SAP in larger regions, a Great Plains or JD Edwards in smaller markets. With NetSuite, Oracle gets the opportunity to take over the integration and standards multinationals have had to provision on their own.
- Customers will have to adjust to bigger deals as NetSuite positions itself as the suite replacement for what it calls the “cloud hairball”. As an example, McGeever claimed SuitePeople “is so integrated into our suite, you cannot buy our HCM alone”
- ISV partners of NetSuite will get to increasingly consider Oracle’s infrastructure-as-a-service as an option for their compute/storage/network needs.
- SI partners of NetSuite will increasingly have to develop dedicated practices and customize their versions of SuiteSuccess to have credibility in this growing space. In the past, SIs have been reluctant to make significant investments around NetSuite
- Expect more baiting of competitors. Oracle believes SAP is particularly vulnerable with a lack of broad cloud ERP suite offering (beyond its SuccessFactors, Ariba and other point solutions it has a weak BYD ERP offering. Its next-gen S4HANA implementations to date have been largely on-premise or in private cloud). During the event, Hurd said “we will do everything in our power to help partners take business from SAP”. SAP did not help its cause during the SuiteWorld event. Analysts were abuzz about the SAP earnings call where the audio dropped during a question about cloud offerings, and when the transmission recommenced, SAP said the issue had already been addressed. Beyond SAP, expect NetSuite to go after other point solution competitors and those who do not subscribe to multi-tenancy in their cloud offerings.
So, lots of positive energy at SuiteWorld, but also lots of questions which will get answered as Oracle and NetSuite get to know each other better. As one analyst remarked “they are still in the honeymoon phase”.