Running Your Business at the Speed of On-Demand. Running Your Business at the Speed of On-Demand. Serving You Today:

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1 Running Your Business at Software as a Service Goes Mainstream Serving You Today: Zach Nelson President & CEO NetSuite Bruce Richardson Chief Research Officer AMR Research Delwin Brockett COO UCG Ltd. Presented by Zach Nelson, CEO of NetSuite Inc. NetSuite: Fastest Growing Software Company in North America 1998: Founded by Larry Ellison & Evan Goldberg Strategy: Deliver integrated business applications as online services Results: 500+ employees HQ in San Mateo, 9 offices worldwide Largest integrated on-demand customer base Running Your Business at Bruce Richardson Chief Research Officer AMR Research The CPA Technology Advisor Technology Marketing Corporation's Best Software Service Today s Agenda Alphabet Soup: On Demand, SaaS or hosted? Single or multi-tenancy? What s driving demand for On Demand? A closer look at market dynamics Why NetSuite? Our Definitions: Hosted Applications Broad term encompassing any software application deployed, served, or managed by a third party provider. OnDemand Method of business process delivery such that business demand can be met dynamically SaaS essentially software delivered OnDemand Multi-tenancy SaaS architected delivery model, where a single instance of the software and data model serves multiple consumers of the service Single-tenancy Like traditional ASP, software architected as traditional licensed software, where one instance of the software and data model serves a single customer. 1

2 Multiple Options Our 12 Market Drivers Today s buyers have a lower appetite for risk more focus on proven, lower TCO IT departments have more projects than they can handle Moves software from a fixed to a variable cost can scale up or down. Generates simplified user interfaces and data models enables broader access by more users. Quick deployments. Considerably lower startup costs relative to license deployments. No shelfware. Rounding Out Our List: Market Adoption of SaaS: Frees up IT resources that would ordinarily be required to maintain a licensed application. Ability to scale to very small organizations with large enterprise functionality. Faster and more frequent upgrades often at little resource or financial burden. No Big Hardware costs. Moves maintenance back to the software vendor. Forces software providers to focus on customer success, rather than one-time license deals. Application Category ERP CRM Sourcing/Procurement Supply Chain Mgmt Human Capital Mgmt Growth Rates: % 60% 125% 16% 13% Source: AMR Research A Closer Look at ERP: Ideal License Structure: If you could change your current ERP software license structure, which would your company prefer to buy? Why NetSuite? Company Size (Revenue) < $50 Million $50M - $249M $250M - $999M $1B- 9.9B $10B+ Total % Selecting On Demand 6% 39% 12% 20% 21% 19% 2

3 Sales Representative Warehouse Management Controller Running Your Business at Zach Nelson CEO NetSuite, Inc. Why On Demand Is In-Demand The two most important shifts in business software the last 20 years are: 1 On Demand Software Dramatically lower cost of doing business 3

4 On-Demand: Manage Your Business, Not Your Software Why On Demand Is In-Demand Manage it Yourself Style On-Demand HARDWARE DESKTOP OS SERVER OS DATABASE APPLICATION HARDWARE DESKTOP OS SERVER OS DATABASE APPLICATION HARDWARE DESKTOP OS SERVER OS DATABASE APPLICATION License License License License License License License License License License License License License License License Maintain Maintain Maintain Maintain Back-up Maintain Maintain Maintain Maintain Back-up Maintain Maintain Maintain Maintain Back-up Patch Patch Patch Tune Upgrade Patch Patch Patch Tune Upgrade Patch Patch Patch Tune Upgrade Replace Replace Replace Upgrade Migrate Replace Replace Replace Upgrade Migrate Replace Replace Replace Upgrade Migrate HARDWARE DESKTOP OS SERVER OS DATABASE APPLICATION Subscribe Dramatically lower cost of doing business Why On Demand Is In-Demand Dramatically lower cost of doing business Predictable cost well-defined TCO Faster development cycles and innovation Ends IT hassles & costs Instant, anytime, anywhere access The two most important shifts in business software the last 20 years are: 1 On Demand Software 2 The Integrated Business Suite Before the Business Suite Web Support The Suite Is Now the Standard in Fortune 1000 Web Support ERP ERP Sales Sales 4

5 Small to Medium Enterprise NetSuite: Your Business On Demand Warehousing Web SFA Customer Portal Vendor Portal Web Store Web Site Marketing Campaigns Sales Force Automation Support Mgmt Partner Mgmt Order Mgmt Accounting Support Shipping Financials Purchasing Inventory Payroll What a Good Idea CEO Ecommerce Manager Support Manager Microsoft Business Portal Dynamics NV Dynamics XP Dynamics GP Dynamics SL Commerce Server Dynamics SL Dynamics NV Dynamics XP Dynamics CRM Sales Rep/ Manager Shipping Manager CFO The View From My Office NetSuite in Action Running Your Business at Delwin Brockett COO UGC Ltd. UCG Ltd. UCG is one of the nation's premier independent providers of business information. Known as a portfolio of business publishing companies that provide guidance, information, analysis, and solutions to customers worldwide. Headquartered in Rockville, Maryland Diverse product set electronic access, databases, newsletter, directories, software, certifications, and conferences Recently named by Washingtonian Magazine as one of the great places to work in the nation's Capital. 5

6 The Business Issues 25 years of organic growth plus more than 35 acquisitions Operating the business became the focus of the business rather than our customers, our products, and our markets Had silo-ed around product and business unit distinctions Operated from different physical locations Operations lagged an entrepreneurial environment Solved the same problem too many times Key Drivers Address the legacy Better know our own business Create an acquisition integration strategy without being overly burdensome or expensive to deploy Requirements Mid-sized does not mean simple! Consolidated system to tie together the diverse business units, customers, and business information Anytime, anywhere availability Required flexibility Separate businesses versus Consolidate reports Different customer bases versus Leverage customers Diverse products versus Package offerings UCG wants to understand its customers and serve its markets, not run IT! Solving the Problem Wanted an ERP footprint for seamless flow of information across all our business functions Looked at on-premise solutions but with the diversity of locations and businesses would have needed lots of infrastructure cost prohibitive. At the same time, looked at on-demand models and decided that they provided the better alternative Easy deployments via the web Available anywhere, anytime User interface easily understood The NetSuite Deployment Started in January 2006 Branded program NetSuite e-360 Joint effort among COO, CFO, and Presidents of Business Units Teamed with NetSuite Professional Services Communicate, Communicate, Communicate By May 2006 had deployed: The complete financial and accounting architecture for all business units and corporate consolidations The SFA and CRM components for one of our business units 1 down, 7 to go! Value Derived: Intelligent Dashboards Reign! e360 Functions within UCG First, derived value on transactional issues From prospect through cash into renewals all within one system Second, acquisition platform for quick integration Consolidated financials into one system Target environment clearly defined Biggest WOW moment, however, is in business intelligence and NetSuite s dashboards Clearly see where we ve been and more importantly where we are going Single point of consistent information Business Intelligence Executive Dashboard Consolidated Analysis Single Data Source Sales & Customer Service 360 Customer View Opportunity Management Sales Funnel Conferences & Events Customer Invoicing Business Unit Customized Invoicing Term Billing Net Suite Centralized Information Customer Invoicing Product Trouble Ticket Employees G/L, A/R, A/P, P/O Campaign Management & List Systems Financial Operations Financial Operations Accounting Operations Employee Data Customer Self Service Increased customer satisfaction Decreased customer support costs 6

7 Running Your Business at Zach Nelson CEO NetSuite, Inc. Myth: Just CRM Customers, even smaller ones, will never be willing to trust their core operational processes to an outsourced provider. Shai Agassi, SAP, IDG News Myth: On-demand apps aren t customizable Copyright NetSuite Inc., All Rights Reserved. On-Demand Customization Clicks before code Industry standard javascript Industry standard web services Carries forward with upgrades Customization encouraged Traditional Software Customization Straight to code Proprietary programming language Hard core integration Rich Customization, Doesn t Break With Upgrades Breaks with upgrades Customization discouraged Myth: Web-based User Interfaces Aren t as Productive 7

8 What All Businesses Need Better, more effective end-to-end business processes management and visibility Ability to make better, faster decisions Reduce costs in non-strategic areas Invest in differentiation Discussion and Q&A 8