SuiteWorld 23 - pushing the boundaries of 'suiteness' after 25 years of NetSuite

Phil Wainewright Profile picture for user pwainewright October 25, 2023
NetSuite has expanded its offering over a 25-year history to keep pace with the needs of small and mid-sized businesses for joined-up processes and data, and the story continues.

Evan Goldberg NetSuite at SuiteWorld 2023 © Gamma Nine Photography
Evan Goldberg at SuiteWorld 2023 (© Gamma Nine Photography)

Businesss software has come a long way in the past 25 years. Back in the 1990s, people bought packaged point solutions for functions such as sales, finance and HR, or the equivalent enterprise applications — CRM, ERP and HCM. Today the emphasis is moving towards bundles of functionality that break down the barriers between those former silos of operation to join up data and processes across the enterprise. At last week's SuiteWorld conference, Evan Goldberg, founder and CEO of NetSuite, identified with this trend when reflecting on his own company's mission. He said:

We try not to think about NetSuite in the traditional and artificial categories of ERP, CRM, HCM. For the kinds of companies that we're selling to, those are all really just different sides of the same coin.

In NetSuite's customer base of small and mid-sized businesses, people often wear multiple hats and there are no strict demarcations between different functions within the organization. Couple that with few or no dedicated IT staff, and it's easy to understand the appeal of a product that can be set up so that people can easily follow a process through to completion. That's what NetSuite sets out to do, as Goldberg elaborates:

We're going to make sure that NetSuite covers the core operations of your business, the most important workflows that are driving what we call these value streams — acquiring and growing customers, creating and delivering products and services, hiring and empowering your employees and optimizing cash and profits. That's the space that NetSuite plays in. We expect to be the system of record within those spaces.

Hence the emphasis during last week's event on the concept of 'suiteness' — encouraging customers to activate as much functionality as possible within the platform. He goes on:

Not everybody consumes every part. But we've seen the customers that use the majority of that have great success with NetSuite because they take advantage of so much of the connections between different departments in your business. Connections between sales and finance, HR, especially in these fast growing companies, they're very entangled.

25 years of NetSuite, now with FSM

NetSuite's evolution over the past 25 years has largely been driven by responding to its customers' desire for a joined-up system. When it first launched as NetLedger, it was simply a cloud-based accounting app, but it quickly added sales automation and later a real-time business metrics dashboard. One of its smartest moves was adding a webshop capability, providing end-to-end e-commerce and accounting at a time when online sales were booming — SuiteCommerce has since become fundamental to its omnichannel offering. Other significant additions have included warehouse management and then people management. Last year saw the introduction of workforce management, and then last week it launched a new field service management (FSM) capability, recognizing the growing need to extend digital connection beyond deskwork, out to those who work on their feet.

It's a good time to add FSM, as the ability to manage outbound workers is applicable in a growing number of industries. Paul Farrell, VP of Product Management at NetSuite says:

It greatly improves not only just the service-based companies, but it helps us better provide a solution for asset-intensive industries that have a lot of preventive maintenance. We're going to go a lot more into healthcare, which again, is very asset-intensive when you come up with preventative maintenance. It also helps capital equipment-based companies or project-based businesses, where installation and other things are very important.

Built on an existing FSM product developed by NetSuite partner Next Technik, now acquired by the company, its customers also span verticals within the construction and engineering sectors, such as HVAC installation and maintenance, and landscaping and garden maintenance.

Goldberg told me that realizing this potential for broader adoption of the FSM functionality across a range of industries would repeat NetSuite's experience after introducing workforce management last year. He says:

I'm optimistic that we'll find some significant new uses and customers and industries for this, because that's what happened with our last year's acquisition of workforce management. First of all, we looked at their customers and it's like, 'Whoa, it's not just retail and the traditional places you might need to manage a large workforce.'

Oracle was very excited about opportunities in healthcare, and they have been talking to NetSuite about how we can continue to expand our footprint for smaller healthcare organizations. Well, it turns out they need to do a lot of shift scheduling of nurses and doctors, and there are already more customers that were using workforce management in this way. Now we can tie it together with a larger vision for that industry, which is not necessarily what we expected when we looked at the two companies together.

Collaboration with Oracle

Close collaboration with Oracle has been another feature of NetSuite's 25 years, with Oracle founder Larry Ellison having mentored Goldberg from the start and maintained a majority investment until NetSuite became part of Oracle in 2016. The ongoing integration into Oracle is still playing out — the transfer of all customers off NetSuite's own data centers into Oracle Cloud Infrastructure (OCI) is underway but is not destined to complete for a few more months. But there's already plenty of evidence of NetSuite benefiting from the consequent economies of scale, particularly in its access to, and joint development of, generative AI features in tandem with Oracle's partner Cohere, as well as in the functionality available by building on Oracle Analytics Warehouse. But Oracle NetSuite continues to retain its independent identity, in part because its customer base has specific needs that its parent doesn't cater for. As an example, here's how Goldberg explains the adaptations that NetSuite made to the analytics warehouse product so that it was suitable for NetSuite's market:

We can take the Oracle tools and adapt them for our customer base. That's exactly what we did with NetSuite Analytics Warehouse [NSAW]. There's also a Fusion Analytics Warehouse that's all based on the most powerful components of Oracle Analytics Cloud and Oracle Autonomous Data Warehouse. But we did a lot of work in tailoring it for NetSuite.

For one thing, NetSuite is very customizable, so we needed to make sure it's easy to get your custom data in. The other thing is, [our customers] don't necessarily have lots of IT resources to maintain a data warehouse, as a large company might traditionally do. They need to be more, quite quick, step-by-step. So we built a lot of step-by-step processes to help them get their data into NSAW. It's a great opportunity for us, but if we just slapped the Oracle products in front of the customer, it would be a failure.

From his comments about healthcare opportunities, it's clear that NetSuite's go-to-market is closely aligned with Oracle's — healthcare is getting a lot of Oracle attention after its acquisition of healthcare tech giant Cerner last year. But it's equally clear that NetSuite remains very good at listening to its own market and understanding what motivates SMB buyers of business technology. It's a strategy that has served it well for the past 25 years. With NetSuite still growing at 20% annually, significantly faster than its parent, that strategy looks set to continue.

My take

The desire for joined-up data and processes that cut across traditional application boundaries is one that we're hearing not just from NetSuite but from every vendor we speak to that sells to small and midmarket businesses. The old application silos developed within the limits of the technology of the time, but today there's no reason to retain these artificial demarcations. They survive in larger enterprises mainly because they're so ingrained in the organization that it's difficult to dismantle them — and there's a tendency for incumbent management to resist change that challenges existing hierarchies. Smaller companies can't afford to be so inflexible — competitive pressures force them to adapt to survive.

The one question nagging at me that I wasn't able to get answered during my time at SuiteWorld last week was, what happens beyond the suite? The concept of 'suiteness' makes sense for those capabilities that are available within the NetSuite platform, and it's true that the notion of joining up data and processes across the enterprise is in tune with the long-term trend. But while it makes sense for a business to base as much of its operations on a single platform as it can, there are always functions that are better served by other applications or platforms. The emerging model is a composable one in which business tech buyers are gravitating not towards a single platform that does everything, but towards multiple platforms and satellites that interconnect. How does NetSuite make it easy for its customers to plug in those other functions that aren't part of its platform offering?

With so much emphasis on 'suiteness', it's perhaps unsurprising that this awkward question was left unaddressed last week. I have requested a briefing on this aspect of NetSuite's offering and will report back once I have found out more of its thoughts on composable architecture. The expansion of NetSuite's capabilities over the past 25 years has been impressive and has kept pace with many of the core needs of its customers. But the ongoing evolution of technology, and of business in response, constantly pushes the boundaries of those needs and expands the horizon of what's possible.

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