SuiteWorld 16 - where the hairball became the hairbill

Stuart Lauchlan Profile picture for user slauchlan May 17, 2016
CEO Zach Nelson kicked off the 2016 SuiteWorld conference with a push into the billing market sector.

Remember that dot com mantra of ‘if we build it, they will come”? NetSuite rolled out its own cloud era version as the top line message for CEO Zach Nelson’s opening keynote address on day one of SuiteWorld - if you can sell it, we can bill it.

Actually it goes one step further - if you can sell it, we can bill it and we can recognise it. It’s all part of a re-positioning of NetSuite that’s taken five years of development and which Nelson deems as important an addition to the company’s portfolio as OneWorld.

It also enabled the overly-familiar ‘hairball’ analogy to be supplanted by the punny ‘hairbill’.

SuiteBilling is intended to unify billing and revenue recognition processes, regardless of business model, with complete controls and auditability, helping businesses comply and reduce risks. It’s pitched as meeting the needs of the changing nature of business models with product companies adding services, while services companies are developing and selling products.

This is potentially a lucrative new revenue stream for NetSuite. The firm cites data from MGI Research, which values the cloud billing market at $1.1 billion in 2016 with an expectation of topping $5.5 billion in 2020, an estimated compound annual growth rate of 49%.

With new revenue recognition rules kicking in in 2018 in the US, there’s going to be an increasing need for companies to be able to combine and adapt their revenue recognition practices and processes.

Nelson told the 8000 attendees at SuiteWorld that SuiteBilling supports compliance with revenue recognition rules, such as revenue arrangements with multiple elements (ASC 605-25) and percentage-of-completion accounting (ASC 605-35), while providing a foundation to prepare for adopting ASC 606 in the future.

The future is increasingly going to see the emergence of hybrid business models are emerging with a mix of different offerings, packaging and pricing bundles, argued Nelson, expanding on his frequently-espoused thesis that this is:

the last computing architecture. There's certainly nothing I can see after this. Maybe in a thousand years from now there will be something, but this is definitely the last architecture in our life time and our children’s life time.

There are big implications because not only is it the last business architecture but it is also the last business architecture. If you aren’t building your business around these concepts, around engaging with your customers anytime, anywhere and on any device with access to all your business data you are not going to have a very good business in future.

He adds that it is easier for companies who started in the last five years to exploit this, but not so much for large established incumbent businesses:

It’s harder for those companies to figure out how to get to the next business architecture. So the other thing we have been doing for the last ten years is helping big companies act like small companies and to give them the abilities to transition to where they need to go in the cloud economy.

Last year’s SuiteWorld was notable for a greater focus on allowing customers to speak for the NetSuite offerings rather than executives and it was good to see that this was retained this year as various customers, large and small, were invited center stage to talk about their use of cloud solutions.

For example, Hyperloop, Elon Musk’s high-speed transportation system, is currently pretty small, but clearly has the potential to expand explosively if the project continues to succeed. CEO Rob Lloyd, who joined last year after 20 years at Cisco, explained:

We’re a start-up. We’ve got the challenge of running a small company where everybody wants to move fast. We are going to scale. We’ve gone from zero to 150 now and we’ll have 250 by the end of the year. That’s fast growth. We’ve made NetSuite the platform to build our business on.

Meanwhile Jim Haskin, CIO of Aspect Software, said that his firm’s strategy of moving beyond its call center base into a more ‘customer experience’ space had been held back by its legacy ERP system. Aspect is the kind of company for which the new billing solution is attractive. Haskin admitted:

We had every flavor of billing issue!

Intelligent order

Also on the agenda for the opening keynote was order management capabilities with company reporting that in 2015, NetSuite Order Management transacted more than 246 million orders, 46% up year-on-year, with total dollar value of $180.5 billion.

To the existing offering is now added “intelligent omni-channel order allocation”, which is pitched as addressing the sort of problem outlined by NetSuite Chief Operating Officer Jim McGeever, who attempted to buy red and white candy cane Christmas lights for his tree. He sourced the product online, made his purchase, then went to the store to collect. But when he got there, the white lights that he had chosen and which had been available when he left the house, were no longer on the shelves of the store. He said:

I walked away unhappy. The transactions didn’t speak to one another. The ordering didn’t speak to the inventory and the supply-chain. This data has to be real-time today. Batch is just no good.

McGeever picked out some stats to back up the need for a more ‘intelligent’ approach to order management:

On CyberMonday, 60% of all orders had inventory allocation problems, while 25% of order online, pick up in store orders fail. You shouldn’t have luck as a strategy for your business. Luck is not a business strategy.

As a customer instance, Jim Ramsey, Head of Global Technology at MacLaren Baby, explained how his firm has consolidated inventory from the top so that if a customer in Germany places an order and the product is not in stock, the firm can source it from the UK or from France.

My take

A confident start to SuiteWorld 16. I was genuinely pleased that the customer story-telling meme has continued this year. SuiteBilling is clearly a major opportunity for NetSuite and was rightly the front-and-center announcement of the day, although there can be no complaints that there wasn’t a lot announced across the day. (Derek will be picking up some of the other elements later today.)

In fact if there is any criticism, it would be that there was almost too much going on in a big lump. The company has taken a conscious decision to put its two main keynotes together on the first morning, rather than across two days. So following Nelson on stage was co-founder Evan Goldberg with his more technology-centric session. Combined, that meant essentially a three-and-a-half hour keynote, with a short break between the two sessions. It will be interesting to see what the attendee feedback is on that.

A grey colored placeholder image