San Francisco – In its first major public event since it went public in December, ERP and CRM on-demand vendor NetSuite (NYSE: N) brought together media and customers Wednesday to launch OneWorld, an add-on module that moves the vendor from the mid market to the low-end of the enterprise as it targets multinationals with subsidiaries in various geographies.
Based in San Mateo, Calif., NetSuite has traditionally targeted the mid-market with its on-demand suite for ERP, CRM and e-commerce functionalities, competing with other on-demand vendors such as Salesforce.com and on-premise vendors such as SAP (NYSE: SAP) and Microsoft (NASDAQ: MSFT).
With OneWorld however, NetSuite is targeting new ground by adding capabilities to help multi-nationals reconcile financial transactions across geographies in real-time and gain drill-down into those numbers at the subsidiary level and the international level, while at the same time maintaining local control and still meeting local unique business requirements such as taxation and currency, all on one platform.
NetSuite CEO Zach Nelson said the vendor took it to the first level by bringing together the Web site, sales and accounting on one system, rather than trying to integrate disparate systems together. The next challenge was to take that model international, across subsidiaries, and he says that’s what OneWorld does. Increasingly, he said, businesses need to sell internationally to survive.
“We’ve taken this one-system architecture and applied it to a multi-company environment,” said Nelson. “You’re running in a single instance of NetSuite, but with local control and local visibility on a single data source.”
In the past, Nelson said companies would try to solve this problem by writing a large cheque to SAP and Oracle (NASDAQ: ORCL) but all they’d get was multiple profit and loss statements, no drill down and no true multi-company analytics.
“What that environment does not provide at any cost is real-time visibility and drill-down into the business,” said Nelson. “(OneWorld is) a single integrated application to run a global business, which is really multiple businesses in one. You have global business control across every instance of your business.”
OneWorld is available now for US$1999 in addition to NetSuite’s regular platform and user fees. Nelson said test customers have gotten up and running on the platform within six weeks.
“The ROI on this is essentially immediate for our customers. The minute it’s up and running it has paid for itself,” said Nelson. “But it’s not money savings (that’s most important) but visibility, finding little problems before they become big. The right way to run a company is fewer systems, not more. You’ll never solve the problem by adding systems, you’ll only solve it by reducing systems.”
Sheryl Kingstone, director of the enterprise research group with analyst firm Yankee Group, says what NetSuite is trying to do with OneWorld isn’t new, in the sense it’s an old problem it’s trying to solve. It’s a problem we haven’t yet solved well though, she said, and with the new module NetSuite will be firmly competing with SAP.
“This is putting NetSuite into much more of an enterprise play. It solidifies them in the mid-market and little higher…mid-market to mid-enterprise,” said Kingstone. “It’s extremely competitive with SAP, particularly when you consider where SAP intends to position (Business ByDesign).”
With businesses beginning to embrace cloud computing and software-as-a-service (SaaS), convincing multinationals to consider an off-premise solution will increasingly be less of a challenge, said Kingstone. However, she said Europe, and Canada, lag behind the U.S. in SaaS adoption.
“The more companies that wake-up and realize they don’t have to have that (integration) mess the more companies that will open-up to on-demand,” said Kingstone.
NetSuite partner EnabledSuccess has already completed a OneWorld implementation with one of its clients. Paul Doucet, president of the Ottawa-based solution provider, calls OneWorld a real step forward for NetSuite.
“It will allow us to bring the power of NetSuite to companies to which it was not previously a viable option – organizations with multiple legal entities operating in various jurisdictions,” said Doucet.
The client now using OneWorld has realized impressive operational efficiencies and reporting improvements, moving from six different general ledgers on six different data bases with no consistency and no connection to their CRM to one seamless platform.
“Now they’re able to produce reports instantly and consolidation is a breeze,” said Doucet. “We have a number of other organizations already expressing interest in such a product which we will now be able to present to them. We look at this as a real growth opportunity for our company.”
