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NetSuite CEO Zach Nelson talks growth, strategy and life with Oracle

Chris Kanaracus | Jan. 10, 2013
NetSuite is one of the SaaS (software as a service) market's pioneers, having sold its growing family of ERP (enterprise resource planning), e-commerce and other applications since 1998. The vendor's results have been beating Wall Street's predictions, and may yet again in a few weeks, when NetSuite is expected to announce its fourth-quarter and year-end results.

IDGNS: How do you handle deals where you're competing with Oracle, given your deep relationship?

Nelson: We don't really avoid competing directly. If the customer wants to put us and SAP side by side, us and Oracle side by side, we're going to compete and try to win the deal. I think there's a natural separation in our strategies so we don't collide that much.

IDGNS: Oracle likes to talk about what a big advantage its new Fusion Applications have, since the same codebase can run in the cloud or on-premises. NetSuite is all about the cloud, though. Does Oracle have an edge over you with Fusion?

Nelson: Oracle has a different target market than us. That decision of whether to go on-premises or off-premises may be a bigger decision point in the CIO office at those companies. They may want to hug their server. In our companies they don't want to hug the server, they don't want to manage these applications. We're pretty religious about not putting software on site, but I suppose some industries probably require it be on-premises. But I think the segment of the market who wants it on-premises is shrinking.

Our customers have also figured out that if the guy writing the software actually has to run it, they have to write it a lot better.

IDGNS: Is NetSuite in the market to acquire a cloud-based HCM (human capital management) vendor, like SAP did with SuccessFactors and Oracle did with Taleo?

Nelson: Historically, our customers have not been demanding HR solutions. What NetSuite has been designed to do is run business processes. Procure to cash, procure to pay. We rarely, rarely get asked for HR. I think you're seeing the evolution of three core processing clouds that are somewhat independent. One's an HR process: finding employees, onboarding them and training them. NetSuite runs an operational process: how does data about sales move through your core transaction processing system? Finally there's the sales force cloud: How do you prospect and find new leads?

HR has certainly not been a priority [for NetSuite]. Is NetSuite interested in managing job reviews? Not really. That said we're always looking at where the intersection points are. We already do payroll today. We'll continue to beef up HR in terms of payroll and benefits, but when it comes to talent management and job reviews, it's not as core. We'll partner there.

IDGNS: What about analytics? Will NetSuite make any acquisitions in that area?

Nelson: We have good core reporting today. One of the biggest challenges in reports is getting the data consolidated so you can visualize it. We solve the big problem, in that [customers'] data is all in one place. We're delivering real-time BI to all user types today. That said, if you look at the things we're doing in e-commerce, the massive amounts of customer data, then you might do something different. You might see some new efforts in that area of analytics.

 

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