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SCMP Reporter

The US company has opened in Singapore and also plans to take its integrated business software to China and Japan

Silicon Valley firm NetSuite believes the time is ripe to bring integrated, on-demand business management software to the region's small companies, as broadband network expansion in Asia spurs  online business activity.

NetSuite, a privately held application services provider controlled by Oracle chairman and chief executive Larry Ellison, established its first regional office in Singapore earlier this month and plans to set up shop on the mainland and Japan over the next 12 months.

The firm delivers a low-cost, integrated package of customer relationship management (CRM), enterprise resource planning (ERP) and e-commerce applications online to small and medium-sized enterprises (SMEs).

'We've been doubling our business every year since we started our international expansion, and we expect to continue doing that in Asia,' NetSuite chief executive Zach Nelson said.

He said that the region led the world in adoption of high-speed data networks, providing an advanced infrastructure on which to bring software as a service to small businesses.

According to market researcher iSuppli, the mainland alone will have 34 million broadband subscribers by the end of the year, compared with 39 million in the United States.

Mr Nelson said NetSuite's delivery of a complete business management system online helped SMEs integrate their business processes and achieve compliance with industry regulations, allowing them to be on the same footing as larger enterprises without the huge software licensing cost.

Erin Traudt, analyst for software as a service research at International Data Corp, said: 'The software on-demand delivery model is helping to reinvigorate the software industry and turns an attentive ear to customer needs and wants.'

Mr Nelson said NetSuite had more than 7,500 corporate customers in North America, Europe and Asia. NetSuite opened its office in Singapore on September 8. This operation will deliver sales, support and consulting to customers across Asia.

The majority of NetSuite's sales comes from North America, but Mr Nelson said its fast-growing international business would help the firm hit the US$100 million annual revenue mark in the next few years.

In Hong Kong, the firm had claimed about three local customers from among its targeted SME market. Jed Yang, branch manager at Hong Kong-based semiconductor distributor ICMart, estimated the firm had saved more than US$10,000 in implementation and systems integration costs at each of its offices since adopting NetSuite.

With offices in the US, South Korea and the mainland, ICMart had been using Microsoft SQL database and financial software from QuickBooks for several years. But as business expanded, that software set-up became unwieldy to scale.

The switch to NetSuite was prompted by the company's need to deploy a unified ERP, accounting and CRM package that could handle its growing business.

ICMart looked at software applications from SAP and Microsoft, but those were deemed too expensive. 'They would have cost twice or three times what we eventually spent on NetSuite,' Mr Yang said.

Mr Nelson said NetSuite would increase its Asia headcount to about 60 this year and form new alliances with value-added software resellers and systems integrators.

About 30 per cent of the firm's annual revenues come from its channel partners, which number more than 150.

Despite its lead in bringing an integrated platform for CRM, ERP and e-commerce to SMEs, NetSuite has a strong rival in New York-listed salesforce.com, which is also pushing market acceptance for hosted on-demand applications.

Still, Mr Nelson said that more companies had moved from fragmented CRM and ERP implementations to NetSuite's one system approach.

NetSuite claimed that more than 100 companies had switched to the company from salesforce.com and other legacy accounting applications such as Intacct, Great Plains, QuickBooks and Peachtree. It said thousands of other enterprises had switched from a variety of other combinations of accounting, e-commerce and sales force automation packages.

In a recent Yankee Group report that examined the cost of integrating CRM and ERP applications, NetSuite's offering was credited for being much less expensive over a three and five-year period compared to a combination of stand-alone CRM and ERP systems.

Mr Nelson said that maintaining cost and productivity differentiation augured well for NetSuite, which hoped to soon carve a niche on the mainland and other untapped markets in Asia.

'The software on-demand delivery model is helping to reinvigorate the software industry'



NetSuite has sights set on small Asian firms