A Decade in SaaS. Stories from the front line. Dean Stockwell Professional Services Director (APAC) NetSuite Inc.

Transcription

1 A Decade in SaaS Stories from the front line Dean Stockwell Professional Services Director (APAC) NetSuite Inc.

2 Agenda Benefits of SaaS The Real-World of SaaS Customer Expectations Enterprise SaaS - Case Study Asia/Pacific Landscape Future of SaaS

3 Forward Looking Statements This presentation contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, any projections of financial information; any statements about historical results that may suggest trends for our business and results of operations; any statements of the plans, strategies and objectives of management for future operations; any statements of expectation or belief regarding future events, technology developments, or enforceability of our intellectual property rights; and any statements of assumptions underlying any of the foregoing. These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future performance. Actual results could differ materially from our current expectations as a result of many factors, including but not limited to: quarterly fluctuations in our business and results of operations; our ability to address market needs and sell our applications and services successfully; and the effects of competition. These and other risks and uncertainties associated with our business are described on Form S-1/A filed with the SEC on December 19, 2008, and available via We assume no obligation and do not intend to update these forward-looking statements. 3

4 No Such Thing as a Free Lunch Introduction to Netsuite Questions for Audience Knowledge of Netsuite prior to this week? Who is using SaaS technology? Webex? Internet Banking? Hotmail? What is the difference between SaaS and The Cloud

5 NetSuite Background 1998: NetSuite Founded by Larry Ellison and Evan Goldberg 2000: Creates World s First Integrated SaaS Suite Application 2006: Grows to nearly 6000 customers 2007: IPO on NYSE - Ticker Symbol N 2008: Introduces NetSuite OneWorld, enabling multi-company consolidation in the cloud

6 The Typical On-Premise Way Warehousing Web SFA Accounting Excel Support

7 The NetSuite SaaS Way Customers CEO Shipping Manager CFO Accounting/ Financials Shipping Inventory Purchasing Sales Force Automation SINGLE DATA REPOSITORY Web Store Sales Rep /Manager Payroll Marketing Campaigns Ecommerce Manager Web Site Customer Portal Vendor Portal Vendors Order Management Support Manager Partner Relationships Customer Support Partners 7

8 SaaS Gaining Momentum Netsuite Annual Revenue $160M $140M $120M $100M $108.5 $ Revenue: $152.5M (40.5% increase YOY) $80M $60M $40M $20M $0M $67.2 $36.4 $17.7 $3.1 $8.3 $ Over 1.3 Million Unique Log-Ins Q Financial Results press release dated 2/10/09 contains GAAP to non-gaap reconciliation and is available on NetSuite website. 8

9 Worldwide SaaS Market Growth % 26.8% 26.00% 24.00% 22.00% 20.00% 18.5% CAGR 18.00% 16.00% 14.00% 12.00% 11.9% 10.00% 8.00% 7.6% 6.00% 4.00% 2.00% 0.00% On-Premise ERP SaaS ERP On-Premise CRM SaaS CRM Source: IDC and Gartner

10 McKinsey Says 40% Better TCO Total Cost of Ownership, $ thousand Implementation, deployment Customization, integration Basic Infrastructure testing, deployment Application infrastructure testing, deployment Ongoing operations Training Mainagement, customization of business process change Data center facilities rental, operations, security, compliance, monitoring of incident resolution Software User licenses, subscriptions, maintenance Other Unscheduled downtime Unused licenses Total Costs (including those not shown here) Software on Premises ,298 Software as a Service , ,640 Sample deployment of CRM software (200-seat license) The McKinsey Quarterly, Delivering Software as a Service 6/2007

11 Other Benefits of SaaS Instant access, anytime, any place All users on a single version Upgrade friendly architecture More efficient to support, maintain and educate Real-time data, multiple geographies Real-time implementation Device connectivity Application connectivity Within the cloud

12 The Real-World Customer Expectations 100% Available, no down-time 100% Secure Self-Implementing, self-configuring On-premise option available Bigger companies Free software / free implementation Isn t everything on the internet free?

13 The Real-World Reality Check 99.5% Available Uptime to this level should be guaranteed by the vendor Secure and audited to global standards Transparency, SAS70 etc. On-Premise option not feasible Financial benefits of SaaS require volume You have to pay for it Zero piracy issues (so far)

14 Case Study - Jollibee Largest fast food company in the Philippines Heavy investment in on-premise enterprise ERP Requirement for system in emerging markets Need to do it much faster and cheaper Needed to be live in less than 6 months No desire to recruit IT staff in each of the emerging regions

15 Business Benefits Realised Time to Value 4 months for SaaS v 18+ months for on-premise Lower Cost of Entry Lower TCO Centralized Deployment Tighter control of the project Go Live = User Training More Responsive Platform Enabler of Shared Service Strategy

16 SaaS Trends Asia/Pacific Strong appetite for SaaS Average Customer Size is Increasing Increased confidence Awareness at C level Benefits difficult to ignore Global subsidiaries, smaller footprint Emerging markets driving adoption SaaS More Popular for Green Field Sites Often no Legacy Systems to replace Political considerations Most SaaS vendors host in US

17 Asia/Pacific Early Adopters Australia Early adopters of new technology Large base of SME s Philippines Entrepreneurial Leverage SaaS infrastructure v build Singapore Entrepreneurial SME s with Government incentives Enterprise more conservative SI s need to take a leap of faith

18 The Future of SaaS (next 3 years) Further Innovation We have only just scratched the surface Most new development projects on SaaS platform Most legacy vendors trying to get there Increased verticalisation Cloud Connectivity Application integration in the cloud Cross-application automated workflow Device proliferation Improved Infrastructure Redundancy and Reliability More Oxygen

19 Everything that can be invented, has been invented Charles H Duell, Commissioner US Patent Office, 1899

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21 Web Facts The last 5,500 days.. Most fault-tolerant machine ever built 100 billion clicks per day 1 billion PC chips Consumes 5% of the planet s electricity Roughly the same complexity as one human brain. But your brain does not double in power every 2 years.. At the current rate of growth, by 2040 the Web would exceed the processing power of humanity 5000 days of the web, Kevin Kelly

22 Q & A