NetSuite’s Asia playbook to focus on SMEs and ripping out legacy IT

posted in: Cloud/SAAS | 0

By:  Benjamin Cher

EDUCATION has done a good job of allowing the market to see the benefits of cloud computing, creating a positive knock-on effect for companies such as California-based NetSuite Inc.

The cloud software company has seen a change in the market, according to its Asia vice president and general manager Zakir Ahmed.

“Awareness of the cloud has reached a certain point where we are seeing a lot more traction in the market,” Zakir told Digital News Asia (DNA) in Singapore.

Companies are also moving away from legacy systems, a trend that NetSuite intends to capitalise on.

And with most companies in Asia being small and medium enterprises (SMEs), these three elements – growing cloud awareness, SMEs and replacing legacy systems – form the basis of the company’s regional play.

According to Zakir, NetSuite’s cloud solutions are perfect for a cost-sensitive market like Asian SMEs.

“We talk a lot about SMEs because our products are a natural fit, and when SMEs are looking for an accounting or ERP (enterprise resource planning) backend, they don’t want to go with a big investment, they want to go with a cloud solution,” he argued.

However, while NetSuite believes its solutions are a natural fit for SMEs, there is space for it to tackle larger enterprises too.

Many organisations that have invested in a large backend system and need to constantly upgrade have begun to see the benefits of a cloud solution, according to Zakir.

“We will focus on SMEs, but we will move upmarket as well,” he said.

Key markets

NetSuite has its Asia headquarters in Singapore, an office in Hong Kong which also deals with its business in mainland China, and a sales presence in Manila.

“The focus is expanding our footprint in those three markets, in particular verticals we believe are areas we have the most opportunities for the quickest return on investment (ROI),” said Zakir.

“Those are areas like wholesale distribution, retail, services, IT, consulting, and manufacturing to a certain degree,” he added.

And speaking about moving “upmarket,” it is not only tackling the larger enterprises, but those SMEs which are growing to that next level.

“The organisations we do business with today, many fall into that category, and from there we have a strategy for the next three years to further penetrate into Asean, and make investments in China,” said Zakir.

Challenges and infrastructure

One barrier often cited when it come to the cloud market in Asia is the wide disparity in infrastructure, which means the just about always-on connectivity for cloud computing is challenging, to say the least.

This is a non-issue these days, according to Zakir (pic).

“Today, because of mobile connectivity, even in Tier Two cities and many of these countries with large geographies, we find that there are no complaints of lack of connectivity per se,” he claimed.

The challenge for NetSuite is in fact that it has “too much opportunity” in its key focus markets, he declared.

“When I say too much opportunity, [I mean] you’ve got companies interested in the cloud, but they might not be part of our core focus today.

“The challenge for us in scaling quickly because of market demand … is making sure we can keep up to speed in hiring talented people and growing teams in multiple markets in the region,” he added.

And despite growing awareness of the benefits of the cloud, the buying cycle in Asia is much longer than it is in more mature markets.

“Bridging that gap is one of the areas we need to work on,” said Zakir.

“We have the right people in these countries to have the right discussions, but we need more people to have these conversations and accelerate the discussions we’re having because it tends to take too long,” he added.

The final challenge for NetSuite revolves around building its brand in the region.

“The organisations we typically compete against are those with legacy systems – we are a disruptive company that is growing over 30% year-on-year globally and very fast in the region,” said Zakir, declining to give regional figures.

“However, our presence and resources are relatively small compared with those [competitors] – there are lots of opportunities where we are not getting invited to the table.

“So getting the awareness of our brand and making sure we are brought to the table in conversations when people are looking for solutions is something we will continue to invest in,” he added.