SuiteWorld Wrap-up – Part Two

Part two of my post-SuiteWorld reflections

I attended NetSuite‘s global conference this year (disclosure – NetSuite contributed to my T&E to attend) and it has been interesting to reflect on a company that is unabashedly growing up. Having been at all of the previous global NetSuite events, it was impressive to see attendance grow to some 5000 people, to hear the conversations ramp up a notch and to see the increasing professionalism with which the event was run. Having had a few days to digest the announcements, here follows an assessment of what we saw through this pundits lens.

What About the Social Angle?

In an analyst session with Zach Nelson, I raised my perennial question around the lack of a compelling vision from the company that provides some answers to the customer engagement question. I put it to him that Salesforce is really taking all of the mindshare when it comes to assessing the sentiment of the marketplace – harnessing conversations and bringing those into the core operations of the business. Salesforce has spent significant money on acquiring companies in this space and really articulates this value proposition strongly.

Nelson’s reaction was that as far as he was concerned, Salesforce isn’t really a customer relationship management solution but rather a prospect relationship management one. I suspect that what he justifiably meant by this was that solutions that only harness the front end of the relationship, but don’t have a deep visibility into the transactional activities of the customer are less than optimal In his view NetSuite, with it’s visibility into the total transactional relationship with the customer has this benefit. As I said that’s a justified position, but one which is, in my view, a little shortsighted. Any customer-facing organization that rests on its laurels by being happy to simply own the transaction relationship is missing out on the opportunity for new sales by harnessing the potential customers before they’ve even made a decision to purchase – this is where social media marketing and sentiment analysis tools come in.

I’m expecting to see NetSuite bridge this gap going forwards. With Their retail solution more baked now, I’d expect a very strong message about harnessing the customer BEFORE they’re event a customer to emerge between now and the next SuiteWorld in 2014.

A Vibrant Ecosystem

One thing that was very positive to see at SuiteWorld was the increasing maturity and breadth of the partner ecosystem. This ecosystem is vibrant not just at the ISV end, but also from the all important system integrator end. At SuiteWorld a partnership with CapGemini was announced – ticking off the last of the massive global consulting firms to have signed on as NetSuite partners.

In the ISV area however there was some real movement and some strong stories. On day two of the event a significant part of Evan Goldberg‘s keynote was given over to a demo by eWinery. I was very bullish about this vertically-specific solution for the wine industry when I first saw it a few months ago. I’ve long said that I believe the opportunity for NetSuite is to roll out more certical-specific solutions. I dug into this issue with Nelson and he explained his approach towards this. NetSuite is keen to provide broad solutions for general verticals (retail, manufacturing, professional services) but to leave what they call the “last mile” to partners. They’ll do broad categories, but not distinct industries seemed to be the approach. The eWinery partnership is a good example of this – NetSuite provided the broad retail and back office functionality, while eWinery came to the party with industry specific knowledge and process – it’s a logical approach and should allow NetSuite to hit a wider addressable market than otherwise.

Critiquing the Competitors

As is often the case, NetSuite put in a few jabs (actually more than a few) at its competitors. In previous years both SAP and Microsoft have come in for a lashing but this year criticism for Microsoft was lacking. This is interesting and is likely tied to the fact that Microsoft is rapidly becoming irrelevant in this space. There was one uncomfortable moment when Norm Fjeldheim, the CIO of Qualcomm, was on stage with Nelson during the keynote. Qualcomm are using NetSuite for some of their small business units and Fjeldheim made the comment that if he were Oracle or SAP he’d be worried. There was a moment of silence before Nelson agreed with him, at least when it comes to SAP. This off-the-cuff exchange shows the illogical nature of nelson’s harsh criticisms for SAP while leaving Oracle untouched. We all know that Larry Ellison is the biggest shareholder in NetSuite (in face I was part of a very small group of customers and influencers who enjoyed a cocktail event at Ellison’s amazing Woodside home), but clearly NetSuite is edging into the markets of both of these players are it’s frankly illogical to not admit that.

Nelson didn’t make a valid point about SAP’s much lauded in-memory technology HANA. He commented that while SAP talks all about technology, NetSuite is focused on delivering solutions to their customers. His point being that NetSuite uses in-memory techniques, but would rather talk about the solutions they’re delivering to the customers rather than the technologies themselves. It’s a valid criticism and one which SAP needs to ruminate upon.

Overall Thoughts

NetSuite is a company that is rapidly maturing. Their product has a depth and a breadth that we haven’t seen before and the customer wins they showcased at SuiteWorld really indicate that is now able to deliver a far greater selection of what large customers need. This maturing greatly increases the likelihood of what I have been predicting for years, namely an acquisition by Oracle. Outside of this M&A crystal ball gazing however, NetSuite seems to be doing everything right. They’ve got a long way to go to catch up with the mindshare and aspirational appeal of Salesforce, but my sense is that internally there is a realization about this and that the next twelve months will see the company really step on the gas and increase the activity on a number of levels – I’d expect to see some smart acquisitions, a strong marketing message about the future of the different verticals they deliver to, and a narrative that helps their customers (who, frankly, are often the more conservative parts of a business) see how their future looks different, and the moves they need to make to secure that future.

Overall SuiteWorld was an impressive event, as NetSuite events always are – I’m already looking forward to the next event and seeing what the company can deliver in 2014.