Ellison-backed ASP expands into Canada

A software firm founded by Larry Ellison wants to become as successful managing applications in the small and medium-sized enterprise as Oracle has become in the database market.

NetSuite Inc. was scheduled to host an event

in downtown Toronto on Wednesday afternoon to launch the firm’s expansion into the Canadian market. The company will have its Canadian head office in Mississauga, Ont., and will be led by Steve Frappier, director of Canadian operations.

Founded in 1998 with Oracle chief executive Larry Ellison as the chief investor and majority owner, NetSuite offers an eponymous Web-based product designed to manage customer relationship management (CRM), enterprise resource planning (ERP) and e-commerce processes on a single application. The current version, 10.0, includes a feature called Upsell Manager, which helps generate sales leads based on a customer’s order history, and NetCommerce Analytics to monitor customers’ activity on a firm’s Web site.

Zach Nelson, NetSuite’s chief executive, said the company decided to expand its presence in Canada because it recently added localization features around GST, HST and language conversion.

“”It takes us a little longer to go to new markets because have to do the statutory accounting portions,”” he said. “”We’re going to establish a very significant office here both to sell service and support in Canada but also to support the eastern seaboard of the United States.””

NeSuite will employ between 150 and 200 people in Mississauga before the end of next year, Nelson said. The company will be housed in a 40,000 sq.-ft. facility that once belonged to SGI.

The company already has some longstanding Canadian customers, including Saffronrouge.com, an e-commerce provider of organic skin care, cosmetics and other beauty products based in Guelph, Ont. Jeff Binder, Saffronrouge.com’s CEO, said the firm has been standardized on NetSuite since the site launched two and a half years ago, using NetSuite to manage its ERP, CRM and even its point-of-sale at its first retail location in Guelph. Binder said he knew the value of integrated applications after working on a project in a previous job to bring together CRM, e-commerce and accounting systems.

“”That project was massive — it very expensive, and ended up failing completely,”” he said. “”No one had ever really done that yet. Having had that experience, I knew what I wanted, but I didn’t expect to be able to find it.””

Many other established firms are trying to move more aggressively into the mid-market, Nelson said, but they all face the same challenge.

“”It rarely works. Technology, from my experience, moves from the bottom up, from the price point,”” he said. “”When you design it for that segment, you have to make it easy to use.””

Binder said NetSuite’s commerce component has gotten much stronger as the company has matured. He said Saffronrouge will be using the product’s custom reporting capabilities to garner more information about conversion rates and customer retention.

–With files from Sarah Lysecki

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