NetSuite CEO Describes Cloud PSA Strategy Called OpenAir

Generally speaking, the best-run managed services providers use PSA (professional services automation) software. Within the MSP community, the best-known PSA platforms include Autotask, ConnectWise and Tigerpaw Software. But here's an interesting twist: At the high-end of the market, NetSuite has been pitching OpenAir, a cloud-based PSA system that many large IT consulting firms have adopted. So how does the NetSuite strategy differ from more traditional PSA offerings in the channel? I gathered some thoughts from NetSuite CEO Zach Nelson during the SuiteWorld conference today in San Francisco.

Let me paint the picture: More than 2,000 NetSuite customers and channel partners are attending SuiteWorld. Nelson says channel partners and cloud integrators now drive roughly 40 percent of NetSuite's SaaS ERP sales. But NetSuite also has a second business -- called OpenAir, a SaaS-based PSA system. Together, NetSuite and OpenAir allow IT consultants to manage product sales and services engagements, Nelson told me today (see FastChat interview, below).

Familiar Theme

In some ways, the NetSuite-OpenAir strategy s0unds strikingly similar to the Autotask-VARStreet strategy. Autotask is a SaaS-based system that manages services engagement, while VARStreet allows VARs to source and manage IT product sales. Autotask acquired VARStreet in 2010.

I'm not suggesting that NetSuite will move down market to promote OpenAir to smaller VARs and MSPs. But I do think NetSuite-OpenAir and some PSA systems could be on a long-term collision course in the mid-market. One prime example: ConnectWise is striving to move up-market, working with HTG Peer Groups to help larger MSPs (50+ employees each) run their businesses more effectively.

I suspect the typical OpenAir engagements involve mid-market IT consulting firms. But NetSuite isn't limiting OpenAir's overall market opportunity. The OpenAir business strategy targets IT services companies with 10 to 10,000 employees.

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