NetSuite goes Dutch with big Benelux expansion

Stuart Lauchlan Profile picture for user slauchlan April 13, 2016
NetSuite's putting its money where its mouth is in terms of European ambition, with more feet on the ground in the Benelux region.

Belgium beckons

Continuing the welcome trend of US cloud companies backing up their European ambitions with investment on the continent, NetSuite on Tuesday announced the opening of a new Benelux headquarters in Amsterdam, following on from the opening of a data center in the Netherlands. A second European data center was opened in Dublin, Ireland.

In the Benelux region, NetSuite has more than 850 subsidiaries and legal entities of companies like Misys, American Express Global Business Travel, Commvault, and Meltwater running NetSuite OneWorld.

To support growth plans in the region further, NetSuite’s expanded its consulting partnership with Deloitte to service customers such as Zembro, a Belgium-based creator of the first intelligent armband specially designed for the elderly, designed to alert relatives of accidents. The firm has already deployed CRM and will move on to finance and accounting, with Deloitte acting as the roll-out partner.

NetSuite has also produced a version of OneWorld specifically for Benelux-headquatered companies.

  • For Belgium, this means country-specific indirect tax support for Belgium’s Belasting over de Toegevoegde Waarde, as well as country-specific reporting with support for Belgium’s Jaarlijkse Lijst Van De Btw - Belastingplichtige Afnemers. (This is a reporting requirement unique to Belgium which requires all companies registered in the country to submit a list of all sales invoices issued in prior years.)
  • For the Netherlands, this means country-specific indirect tax support for the Netherlands’ Omzetbelasting.
  • For Luxembourg, this means country-specific indirect tax support for Luxembourg’s Taxe sur la Valeur Ajoutée.

Nelson's view

Earlier today, I caught up with NetSuite CEO Zach Nelson in London, who explained that it was important to have ‘feet on the ground’ in the region in order to move up from the subsidiary operations that make up most of the customers there at present:

Unless you have people on the ground, you don’t get headquarters, you get the subsidiaries attached to where you are. So now we’ll have service sales and support on the ground.

It’s the hope that this presence will attract more customers like Netherlands-headquartered ESOMAR (European Society for Opinion & Market Research), a member organisation dedicated to encouraging, advancing and elevating market research worldwide.

ESOMAR is now using NetSuite OneWorld for ERP, CRM and website content management after replacing Exact ERP, an on-premise CRM and a content management system (CMS) that used to support its website. Marie-Agnes Mourot de Lathyle, Chief Finance and Operations Officer at ESOMAR, says:

We are a service business that has to be able to operate on a global stage, but effectively meet the needs of our membership on a local basis. Flexibility and scalability are therefore key to our success. Our previous IT system constrained rather than cultivated this.

NetSuite enabled us to customize our IT system to meet the needs of our organisation rather than the other way round. It has revolutionized how we use and share our data and delivered real business intelligence, at every level of the organisation – from the board to the local representatives, in the office and at our events.

It’s Nelson’s intention to have 20 people in the Netherlands by the end of the year. Then attention can start to turn to other areas of Europe, with Germany and the SAP heartland on the list, although according to Nelson:

They’re really slow to adopt this cloud stuff, they still like that SAP stuff.

On a less tongue-in-cheek note, expansions into France will be built on the relationship with Capgemini announced last year. This is different to the Deloitte relationship in Belgium in that it is an exclusive arrangement. Nelson explained:

In France, 80% of IT implementations are done by Capgemini, so they have become our exclusive distributor there. That’s working. We signed our first three deals in the last quarter.

It’s not a model that can be replicated completely in other countries, he added:

The dream is to find a distributor that has that sort of marketshare [as Capgemini in France]. There are some regions where one partner wil dominate. In Belgium, Deloitte is dedicating a good size team to supporting us.

As a case in point of the success of the Capgemini relationship, Nelson cited Trasnsavia, a low cost airline subsidiary of Air France/KLM. Transavia will replace a legacy AS 400-based system at its office in the Netherlands and an Infor system in France with NetSuite OneWorld, with Capgemini doing the implementation and integration work.

My take

As I’ve said before about other US firms, putting that money where the mouth is when it comes to European expansion is critical, especially with the ongoing shenanigans around data transfer rules.

It’s ironic that Nelson should be in London on the day that the Privacy Shield was deemed unfit for purpose, as the last time there as a big NetSuite gathering in the UK, Safe Harbor was struck down! As for the NetSuite view on data sovereignty concerns, he said:

They [the EU and US] have to decide something sometime. At the end of the day, we have always been dealing with the most critical and sensitive data people have. Even before the rules existed, we knew that there would have to be security. Obviously we’ll comply with any rules.

But standards evolve. When we started, there were no standards. For smaller players, this is a barrier to entry. Smaller plays have a really hard time dealing with regulations. They will sign up and say that they’re doing this or that, but in reality… It’s not that we wish for a regulatory burden, but in our case, it’s a competitive differentiator.

On the subject of regulation, the differing tax regimes across the EU should be a happy hunting ground for NetSuite, especially if EU plans to force multi-nationals to reveal country-by-country numbers in future. That’s a prospect that appeals to Nelson:

Any disruption to tax codes and NetSuite business goes crazy.

Heaven alone knows what fun could be had from a Brexit vote then…

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