I wrote in January I expect this to be the year of the vertical for cloud applications. There are too many horizontal cloud apps in accounting, HR and CRM, not enough in industry specific functionality. Every event I have gone to since, I have viewed from that lens. SuiteWorld 16 last week was no different.
CEO Zach Nelson pointed out they now have customers across every one of 1540 SIC codes including exotic ones he joked about like "coin-operated amusement devices”. Almost to validate Nelson, an Alphabet (Google’s parent) exec remarked on stage they were recommending NetSuite to a wide array of divisions including Nest which makes home devices and Calico which is focused on anti-aging research.
The reality, however, is there are plenty of utilities who would love to replace SAP billing, ditto with retailers with Oracle merchandising, and health care providers with Epic electronic health records. They are not calling NetSuite. Not yet anyways as these currently fall outside of NetSuite’s areas of focus.
NetSuite’s specific industry strengths were sharply in focus on day two of the event where they had 5 parallel sessions for Software/Internet, Retail/Commerce, Wholesale Distribution and Manufacturing, Services and Nonprofit sectors. I attended the Software track and it was very well done. Product functionality and customer executives showed NetSuite’s appeal across the lifecycle from start-ups to “growth at scale” to public companies. NetSuite own executives like Founder, CTO and Chairman, Evan Goldberg and CFO Ron Gill talked with credibility about different needs and challenges in each phase and how their solution met them.
I spent time with two senior NetSuite execs in the Wholesale/Distribution sector (which is NetSuite’s most mature) and two manufacturing customer CEOs – one at EPEC, a tech design and engineering company and Urban626 which makes the URB-E light scooter.
In each of the focus sectors (other than non-profit which Jessica Twentyman of Diginomica covers here) NetSuite can showcase 000s of customers and years of product growth – definite signs of maturity.
In a Q&A, Nelson pointed out they can see adding a couple of new industries a year going forward. Jason Maynard, EVP Strategy and Corporate Development highlighted the role of partners (NetSuite says 70% of their deals involve at least one SuiteCloud Developer Network (SDN) partner with a SuiteApp built using their platform). In a side conversation, Goldberg told me they follow the lead of customers when deciding on verticals. He said they have not seen much interest from law firms so the service sector offering will likely not evolve into e-discovery or other nuances attorneys need.
Another area of NetSuite growth is in multinational functionality with enhancements for global entity management and inter-company accounting. NetSuite has historically been competitive in 2 Tier ERP scenarios and this should further strengthen its position there as well as in single tier ERP at the enterprise level.
The recurring theme from many sessions = NetSuite has a formidable offering in the “Order to Revenue” cycle for many industries. On day one of the event, NetSuite introduced SuiteBilling, an order-to-billing-to-revenue solution and I heard several of their execs use a variant of the slogan “If you can sell it, we can bill it, and recognize the revenue”. Revenue recognition will be a strong suit for NetSuite as enterprises prepare for compliance with standards like ASC 606.
In the past I have written about NetSuite’s retail industry strength and support for omni-channel commerce. At this event, I saw that extended to omni-business-model - any product, any service and any subscription as-a-service. Add to that NetSuite’s multi-national strengths, SuiteCloud Platform PaaS capabilities, and partner diversity and you can see how its solutions are attractive to a wide number of industries.
While I would love for NetSuite to start developing more industry specific operational modules I am pleased to see the revenue side capabilities that many a SIC code customer can adopt. At this stage, I believe NetSuite has one of the most evolved industry strategies in the cloud application world.