Cloud ERP vendor growing rapidly, but no sign of profit…
Having recently concluded its SuiteWorld annual conference, cloud ERP pioneer NetSuite is on a charge, with a rapidly expanding client base, revenues which have blown past the billion-dollar mark and growth which has seen the company become the sixth biggest software business in the world. That’s thanks to the maturity of its offerings and, no doubt, the growing acceptance of cloud as the preferred architecture for enterprise software developments.
If all that sounds rosy, and indeed it does, what could possibly stop the march of this vendor? Well, like many other cloud companies, it still isn’t making any real money. Despite consistently increasing revenues year-on-year, there is still no indication of when, if ever, it intends to actually turn a profit.
Be that as it may, let’s look at some of those numbers; at its SuiteWorld conference, recently concluded in San Jose, the company said it grew revenue from $67 million in 2006 to within a whisker of $1-billion by this year. Customers have gone from 10,000 to 30,000 in 16 countries. And it is Gartner that says NetSuite is the world’s number 6 software company.
What is it that is fuelling this growth? Kiwi merino clothing company Mons Royale provides an example. It deployed NetSuite OneWorld for financial consolidation, inventory management, multi-currency for AUD, NZD, Euro, Swiss Franc and Japanese Yen and multi-language support for English, French, Swiss, Norwegian and Japanese, and tax compliance across its head office in New Zealand and seven subsidiaries in Canada, the US, France, Switzerland, Norway, Japan and Australia.
With NetSuite OneWorld, Mons Royale said it has real-time insight across its business, facilitating more accurate and strategic decision making. The company said it chose NetSuite for its rapid deployment, customisability and integration platform and scalability. As is to be expected with a modern ERP solution, a number of manual processes have been automated, while global inventory management was introduced.
Mons Royale COO Ben Irving said the implementation has been transformational. “For the first time we have a single source of truth available from our headquarters in New Zealand, which enables us to make more strategic business decisions, as well as deploy our most valuable resources on growing the business, versus back office business administration.”
Across the Tasman, the Lingerie Company of Australia has implemented OneWorld to replace several legacy systems across its head office, wholesale business and 13 retail stores in Australia. OneWorld now takes care of its accounting, CRM, point of sale, demand and supply planning, inventory management, order management, warehouse management, invoicing and payroll.
Lingerie Company CEO Tim Rosenfield said NetSuite OneWorld equips it to access and analyse each customer’s complete transaction history and turn that data into customised engagement. “As a business, we can now engage with our customers in a much more meaningful way, and this largely has to do with how we obtain, analyse and manage our data,” he explained.
“Being able to offer our customers items based on their purchase history and engage with them in a way that makes them feel valued, is crucial to our business. To ensure we are providing the best level of service to our customers, we also need a responsive stock analysis system to offer the desired items to our ANZ customers in a timely manner.”
These are results which should be expected from a mature, proven software solution and indeed, NeSuite has no shortage of customer wins in Australasia and elsewhere, which have seen the company enjoy market share growth of 45%.
Perhaps the only real question remaining is, ‘When will that translate into profitability?’ And that’s a question NetSuite isn’t answering right now.
