25 years ago this summer, Evan Goldberg founded NetSuite, the cloud ERP platform for small and mid-sized businesses, after an earlier venture had shown up the need for better visibility into day-to-day business finances. Much has changed in the past quarter-century, but that same desire to fill an unmet need today drives many of NetSuite's customers as they build their own businesses. Goldberg says:
I think the flexibility that we're seeing businesses pivot is unlike what we've seen before. They're using so many different types of products in their individual lives, I think the next generation doesn't separate work and personal as much as maybe we did back in the day.
The benefit of that is they're really able to bring their lived experience into their businesses ... A lot of the exciting ideas that I'm seeing are a very similar story, where someone had a need, and they could not find a product to satisfy it and they're like, 'Yes, I have to build this myself.'
Goldberg was in London this week for the vendor's SuiteConnect conference, where business visibility and joined-up data remained a strong theme. His opening keynote showed off new features in Oracle Netsuite's data analytics, planning and budgeting tools, along with new native integrations to popular e-commerce and point-of-sale platform Shopify and third-party logistics provider ShipStation. Other capabilities on display covered HR, inventory management, customer self-service account management, and subscription billing.
The rise of subscription-based business models is creating a new breed of business that doesn't fit into traditional categories. Goldberg has called these hybrid businesses, because they sell a mix of products, software and services, often bundled together into a monthly subscription. He explains:
Almost every product company is trying to figure out how they can become a subscription company. You see it on Amazon all the time — you buy some staple, and they're like, 'Well, do you want us to deliver this to you every month?'
I think you might call them 'subscription natives' — young people starting companies now are used to this idea that you pay for something by the month, it could be anything. That's the first thing they think of, 'How can I build a sustainable long-term revenue stream out of this great product idea?'
Inevitably, I think, that leads to these companies that don't fit easily into the old model of distributor, manufacturer, retailer, software company, project-based service company, non-project-based service company. They just cross so many boundaries.
This is a type of company that he believes NetSuite is well placed to serve, because it has always catered for both product and services businesses, as well as its experience of handling the complexities of revenue recognition in subscription businesses, due to a strong SaaS contingent in the customer base. He continues:
We fortunately never really chose a side. We always tried to satisfy both software companies, service companies, manufacturing. We've always tried to do the product and the services and, by the way, non-profit ... So we're really reaping the benefit now because these companies are crossing so many boundaries ...
How to account for all that is complex, and it's done differently sometimes in different geographies. That's definitely what we excel at. Part of it is just being able to let you do that globally because our customers are already doing business in so many different regions.
Harnessing AI for business
Another up-and-coming trend he's seeing in NetSuite's customer base is the rise of companies that are using automation and AI to provide professional services at scale. He says:
Some of the most interesting businesses I see are people that are taking traditional professional services and figuring out how to deliver them en masse, whether it be design services for your home, [or] a company that does graphic design ...
I think people taking stuff that used to have to be done by specialists, and now can be done on in a mass form with AI and other technologies, I think that's some of the most interesting stuff I'm seeing happening right now.
NetSuite is harnessing AI in its own platform, too, transforming ERP from a historical system of record to offer predictive suggestions based on analysis of that data. He elaborates:
AI does have the potential to provide huge benefits to businesses, really making these systems more of an intelligent assistant, rather than just a record tracker. And helping making the systems work better for users, because we can compare users and see what things have worked and what things that other users have liked, and surface those to users.
[It's] intelligent assistance, both on the use of the product, and of course the data within it. That's a super exciting area, that we're addressing systematically, just trying to continue to find new areas that AI can add value within our application.
One of the challenges of evolving a cloud product, of course, is the need to deliver those changes within a system that people are already using to run their business. While there's plenty of innovation ahead, it also needs to make sense to customers. He sums up:
One of the things we've gotten better at as a company over 25 years is balancing our perspective with those of our many different types of customers — doing really good user research, but also following some of our instincts that come from us being entrepreneurs and using our technology ...
We're really investing in the next generation of NetSuite and trying to make sure we're as vibrant 25 years from now as we are today ... That's very exciting for me, to utilize the lessons we've learned over 25 years. And again, I've often called it a heart transplant in a moving ambulance. We've really got to hone our skills at making bold leaps, while bringing everybody along.
As one of the earliest pioneers of cloud-based business software, NetSuite has always learned much from seeing how its customers have used its platform, and from providing for their evolving needs. End-to-end processes and visibility across all of an organization's operations remain as crucial as ever, along with growing flexibility to explore new business models. This is in line with the trends that diginomica outlines in our Frictionless Enterprise framework, where these digitally connected platforms become a catalyst for opening up new ways of working and doing business. Even after 25 years, the pace of business innovation gives no sign of slowing down.