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Will the synergy between NetSuite and Oracle play out favorably for partners in the long run? Time will tell.
July 20, 2017
The synergy between NetSuite and Oracle was in place long before the latter’s $9.3 billion acquisition of the former late last year. Not only was NetSuite founded in 1998 by former Oracle employee Evan Goldberg, and included about 40 percent ownership by Oracle co-founder and former CEO Larry Ellison, but the midmarket business management suite was built on Oracle technology.
The cloud-based midmarket business management software from NetSuite was also a fine match for Oracle’s enterprise product focus, cloud transformation strategy, and lack of success penetrating midmarket accounts.
NetSuite’s Craig West
We chatted with Craig West, vice president of channel sales, to catch up on NetSuite, and the company’s business and partner strategy since the Oracle acquisition.
Channel Partners: What was NetSuite’s go-to-market strategy and channel strategy prior to the acquisition and will that stay the same or change with the acquisition?
Craig West: Our sales go-to-market strategy since 2002 [NetSuite was founded in 1998] was a hybrid strategy from a distribution standpoint. We sold direct, and also had NetSuite professional services to do those implementations, and we also sold via channel partners, typically in the traditional midmarket ERP or business-application channel where they were doing their own demand generation, running their own sale cycles, and their service organizations were delivering the implementations.
We’ve been on the record for a number of years, that our channel contributes about 40-something percent of our new customers, so it stayed a pretty consistent percentage despite all our rapid growth since our IPO.
With the acquisition, our sales go-to-market strategy is unchanged. With the acquisition, we’re running our business independently so we still have direct sellers and channel partners.
CP: So, the company is more direct than indirect sales. Do you expect that to change?
CW: Yes [it’s more direct sales]. The acquisition just closed in November so there’s a lot to be seen, there [are] a lot of factors. NetSuite’s business has historically been overwhelmingly U.S.-based. and Oracle’s business has been international. NetSuite has historically sold direct in U.S. speaking countries and we’ve been partner-first in other parts of the world.
What Oracle has planned is to greatly increase our investment in our international organization and create opportunities for our partners where ever we’re not selling direct. So, I definitely think that we could see the pendulum swing there, largely driven by international opportunities, rather than English-speaking, but there’s a lot that remains to be seen on that.
CP: What’s the profile of a typical NetSuite partner?
CW: Our typical partner – and this is in our Solution Provider Program – is really a boutique business consultancy that might be a standalone business that traditionally sold [Microsoft] Dynamics, SAP solutions or Oracle business application solutions, or a large national accounting firm such as RSM, for example, [which] does those kinds of things.
Pretty unilaterally, I see firms fit one of those descriptions.
CP: There was recent news about new partners. Could you talk about that?
CW: Our business is growing rapidly and we’re actively recruiting partners and they’re actively coming to us. Particularly, the partners who have …
…built practices on premises legacy solutions, [whose] vendors fail to deliver state-of-the-art cloud solutions. We’ve become the de facto standard for partners that want to build practices around cloud business applications.
We announce wins like that every quarter or so. We have about 400 or so folks in that partner community right now. I expect to see that grow going forward.
About 200 of our partners are in North America.
CP: Do you expect to be making any changes to the NetSuite partner program with the acquisition?
CW: To the extent that we’re continuing to run our own business, we’ll continue to innovate in our partner program – for example, we’ll look at how we engage our partners, use technology to reduce friction, improve our service levels – I absolutely expect to march along the road map that we were on before the acquisition.
Of course, now as part of the larger Oracle organization and the fact that they have very robust partner programs under their OPN [Oracle PartnerNetwork] umbrella, we’ll be looking to do things to align as closely as we can from a consistency standpoint and take advantage of tools, best practices and the broad experiences that they have.
Potentially, down the line, there will be partner and program unification.
CP: Do you expect to see Oracle partners show an interest in selling NetSuite and into the midmarket?
CW: Yes, we expect it — and we’re seeing it. Having NetSuite in the family, if you will, I think it’s definitely been the kind of event that’s driven or solidified certain Oracle partners around … if they wanted to add a new piece of cloud technology or if they were very enterprise-centric and want to take advantage of the midmarket, there’s an in-the-family solution that wasn’t there before.
We’ve seen a definite increase in the traffic and readiness from the Oracle community to partner with us.
CP: And, what about the other direction … NetSuite midmarket partners interested in expanding to the enterprise?
CW: I think what we’ll see if we look at NetSuite’s historical partner, is first wanting to become [an] OPN partner, and will be more driven by the adjacent products, such as Oracle HCM [human capital management], planning and budgeting tools, warehousing management tools … things that could integrate and broaden the universe of the core NetSuite products. Selling and implementing in the enterprise is a pretty dramatically different thing — I think we’ll see that happen, but the first phase will be around taking advantage of the broad portfolio of products that Oracle has [to] create a more unique solution offering with NetSuite the centerpiece in the midmarket.
CP: How do you define midmarket?
CW: Generally the way we look at it … on the low end $50 million, to $1-2 billion on the high end. Under 1,000 employees is another way we look at it.
CP: Do you have a road map for partners who want to sell from the Oracle portfolio?
CW: We’ll fully take advantage of all the tools that OPN already has, and that’s a very robust, worldwide program with state-of-the-art onboarding, training, certification and all of the things you’d expect.
We’re already working collaboratively with those teams to try to streamline knowledge transfer, introductions and things of that nature but we’ll leverage the tools Oracle already has in place. Once we’re in-family it will be easier for us to identify opportunities, get the right people involved and get the best experience we can create for our partners.
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