Customer Relationship Management (CRM) expert Paul Greenberg has named NetSuite CRM+ as the CRM to watch in 2015. Greenberg suggests that the new key feature in business management software is it’s ability to integrate with other applications in a software ecosystem; and NetSuite is at the top of Greenberg’s assessment of CRM systems for 2015. Here’s what Greenberg had to say on ZDNet:
Suites are being replaced by ecosystems, or technology matrices, or whatever else doesn’t imply a single entity providing everything. In fact, the definition of enterprise software suites as “all in one” is going away. Thus, the so-called “debate” between suites and best of breed is also going away.
You could say that the reason for this is that interoperability is better than ever – one application can live with another from a different vendor more easily than before. You could say that the REST APIs out there and the willingness of technology companies to provide them to anyone who wants to build integrations to the provider’s technology is far more widespread than any time in the past. Look at NetSuite and its SuiteApps – the open APIs that NetSuite provides also commoditizes the applications that are integrated to NetSuite using it.
Think about it this way: Your little company has this idea to do something that NetSuite doesn’t do or just isn’t doing well. You register, get NetSuite’s Open APIs, develop your integration, do what you have to do to sign up and put the app on SuiteApps and you have a market. All without dealing with standard partnering relationships with NetSuite.
Now, I’m oversimplifying it but that’s the way that it more or less works. Interoperability and integration are commodities now. The need for suites becomes less and less manifest, but the best of breed could be found with the integration with one of the suites.
But that doesn’t mean that best of breed gets a pass either. The reality is that best of breed, even with the interoperability at its optimal, doesn’t provide enough of what customers are looking for any more.
In the past, when customers were looking for just products and services from a vendor, a best of breed application might well have been enough. But because even the suite vendors now integrate with anything and for the most part sell their pieces individually, there is no measurable advantage of going best of breed over suite since the suite providers can compete app by app.
But customers aren’t looking for just products and services any longer. They are looking for the products, services, tools and consumable experiences that, on the one hand, provide the customer with a more complete set of capabilities that are attuned to the outcomes that the customer is looking for. But the customer is also looking for the feeling that the vendor “knows” them well enough to make it a personalized set of products, services, tools and consumable experiences. They have to be “good enough” (not delightful) to make that customer want to continue his/her interactions with the vendor.
How do you do that? Ecosystems – those that ultimately blur the distinction between suites and best of breed because both are necessary to provide the customer with what they seek.
Think of ecosystems this way. For years, David’s Bridal thought that its customer was the bride. So, for many years, they did what you would expect that they would do. They provided wedding gowns and accessories for the wedding – the event – itself.
But when they began to think more broadly, they realized that the bride wasn’t always a bride – they were affianced before the wedding and newly married after the wedding. All of a sudden it made sense to partner with companies that provided possible avenues for a honeymoon – e.g. a cruise company. Get the bride a special deal on a cruise honeymoon. Or for prior to the wedding, a jewelry company or flower company.
With partners to cover the pre and post areas, they become an infinitely more interesting company to a bride-to-be. They still have their core mission – selling wedding gowns, but because they provide an ecosystem, they are more appealing. The bride to be can customize what she wants leading up to and after the wedding.
That’s how ecosystems work.
But to some extent, I’m begging the question. The reality is that while all of the above is true, it isn’t the reason that suites are becoming less prevalent; but it’s one of the changes that have gone on because of the reason.
If I were to choose one reason that this is occurring, it’s because the customer is more demanding than ever before. Those same kind of ecosystems are becoming the necessity for technology vendors — not just making sure the integrations are done or interoperability is more convenient. That means that if I’m a vendor with a suite as the winners here have provided as a truly solid option, I have to get away from just providing my suite and some extensions to it and I have to start thinking about what it is that my customers and prospects truly want. That means to figure out what their goals are — and what outcomes they are looking to achieve given those goals — and then from there seeing if I have what it takes to give them everything that they need.
The odds of being able to give them everything are about, oh, somewhere south of zero, so that means I have to do the following:
Figure out what it is they would need that I can categorically provide (e.g. specific kind of technology like CRM) to get a complete set of outcomes related to their goals.
Figure out what I natively provide and am willing to invest in to build.
Figure out what partners can help me fill the gaps.
Find those partners and seek out the appropriate relationship to them.
What makes these three winners so interesting — and they are suite providers, make no mistake about that — is that they are able to natively handle a big chunk of the ecosystem. With the addition of Salesforce and Microsoft, they are perhaps the only remaining true suite providers. And that amounts to something.
NetSuite is an annual Watchlist winner and a conundrum. They are primarily an ERP provider but they have a highly competent CRM suite, CRM+. Additionally, not well known enough of a fact, NetSuite is a pioneer of native cloud-based applications. They began their life in 1998 as a web-hosted accounting application called NetLedger. So they dabbled with the cloud predecessors, the application service providers (ASPs), 17 years ago, right around the time Salesforce was getting its start. They are among the originals.
This is a company that has had a solid management team for years, with founder Evan Goldberg still CTO and responsible for the development of what is among the most solid suites on the market. What always marvels me about what they provide is their attention to detail that matters to customers. For example, if there is a change in a tax rate that is important to a company’s CFO, it is reflected the next day in the applications that the customer is using – automatically updated via the cloud. There is no need (unless the customer sets it up that way, to manually provide the update. It’s just done. Easy peasy. That’s the way it should be.
The CEO, Zach Nelson, while not a founder, is also someone who knows how to lead a company. He has been NetSuite’s public face for many years and has the good will of many of the industry analysts who impact his company’s public perception and the good will of a very satisfied customer base (after a few glitches several years ago). Aside from being the public face and a true hail-fellow-well-met, he is a smart strategist who has kept the company in the conversation around ERP and even CRM big time for years.
Aside from my general admiration of NetSuite’s management team (and I haven’t even mentioned the literally incomparable Mei Li, their SVP of Corporate Communications), is that they have FINALLY filled a hole that they’ve had for many years. They hired Fred Studer from Microsoft as their Chief Marketing Officer.
Their lack of an even decent CMO for many years, led them to do some things that made little sense, given their offering (see below for some of that) or at minimum, made them either hyper-aggressive or under-apparent. Neither served them well (again, see below). Luckily, they had Mei Li for outreach (both public relations and analyst relations) and there is no one better at making journalists and analysts like a company for what they are.
Officially and unofficially, along with Zach’s likeable demeanor, that kept several wolves from their door and kept things neutral at minimum, and made them positive at best, regardless of the snafus. Hiring Fred Studer is a fabulous move – a man well suited to both a strategists position and a public face – who understands marketing as the first line of engagement – a decidedly 21st century view. To get an idea of his value as the public face of a company take a look at this Microsoft commercial. This was a great move, one that will have market impact quickly.
But it goes beyond that. Their CRM+ product suite genuinely should have that plus sign after CRM because it offers a bit more than the traditional product suite. Not only does it cover the more traditional sales, marketing and customer service functions but it handles incentive compensation, partner management and order management too. Notice that I haven’t said a word about “social” here. That isn’t the NetSuite footprint. They cover functional operational automation at all levels – not communications. They aren’t a hip product, but they are a very good one.
But management and product are only two of the more than 30 things that get you on the Watchlist (or not).
One area that they have shown marked improvement in has been their partnership program which had been an historic weak spot for the company. On the VAR side, over 40% of their business is derived from partners – a huge leap forward given that their revenues for 2014 clocked in at $556.3 million, a 34% year over year growth rate. They are well on their way to their first $1 billion.
But the partnerships go considerably further than that. They have a SuiteCloud Developer Network (SDN) which is dedicated to building complementary solutions to the NetSuite offering, using and extending the NetSuite platform. There is one very smart move there. They understand platform and the value of platform – which means extensible system to build from – to their overall ecosystem – though I can’t say that they think in ecosystem. They don’t. They should because they are actually building an ecosystem, but let’s just say that they haven’t labeled it as such. Their CRM partners for SDN include InsideView, LyntonWeb – which connects Hubspot to NetSuite – and CallidusCloud via CallidusCloud’s LeadFormix acquisition.
Rather uniquely (I think), they have a BPO partner program – essentially partners like Capgemini and McGladrey – whose job is to provide the entire range of the market with a unified solution – i.e. ERP, CRM and ecommerce. They can do it the old fashioned Business Process Outsourcing (BPO) way or with Business Process as a Service (BPaaS) – another new acronym.
Let me just say that given where they were three years ago, this is a HUGE improvement in both execution and thinking when it comes to partnerships.
There is more but I think it’s to take a look at what they can do to increase their impact on the marketplace and hopefully get them to whatever they think their next level is. To be clear, these are tweaks but they are important ones – and mostly aimed at their marketing weaknesses of the past several years.