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NetSuite battles mid-market malaise

While the economic mood music remains melancholy for mid-market software spending here in the UK, cloud player NetSuite attempted to strike an upbeat note at its annual London conference.

31st Oct 2019
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NetSuite VP Evan Goldberg at SuiteConnect

Cloud ERP enthusiasts gathered in London this week for SuiteConnect, where NetSuite founder and cloud pioneer Evan Goldberg crossed the Atlantic to address a packed keynote audience.

In spite of the gloomy fiscal picture in the UK NetSuite, which targets high-growth businesses moving on from spreadsheets or packages such as QuickBooks or Xero, was keen to highlight its growth in this country, where it now has more than 1,000 of its 18,000 worldwide customers.

Referring to “the elephant in the room” of Brexit, Goldberg was bullish about the opportunities for his company. 

“When things change, NetSuite can respond quickly,” he told a press briefing at the event. “We’ve got 2,000 people in our development team preparing NetSuite for hundreds of countries. We’re ready for change and our customers are actually asking for it. More uncertainty makes people want more agility so they can adapt to it.”

One example of this NetSuite was keen to highlight was around its tax and compliance platform. Kamlesh Rajyaguru, UK senior product manager, told AccountingWEB that should any changes occur, as a result of Brexit or otherwise, the platform’s flexibility allows the software to make changes quickly and push them out to every user account when ready.

Can NetSuite ride out the mid-market slump?

But the sunny outlook from the Silicon Valley software outfit doesn’t quite match up with what many are seeing on the ground in UK mid-market businesses, where spending remains stubbornly sluggish in the face of economic, political and legislative uncertainty.

This dip bucked the trend of steady increases in mid-market cloud accounting use in recent years. The government’s Making Tax Digital stimulated a lot of this online migration, but larger companies have more complex financial systems that are harder to replace. 

But with companies sitting on their cash in case of rainy days ahead, spending on new finance systems has slowed. Mid-market cloud players such as NetSuite, Microsoft Dynamics, Advanced, iPlicit and new entrant Xledger, among others, need to find ways to prise open the wallets of reluctant CEOs and business owners up and down the land.

Mindset change

Given the current picture, how does NetSuite intend to tackle the mid-market malaise? Part of the solution, as it sees it, is through a longer-term shift in mindset. 

NetSuite launched three new UK versions of its SuiteSuccess packages at the London conference: wholesale distribution, manufacturing and, for non-profit organisations, social impact. These variants have been tailored for the specific industries with pre-built workflows, KPIs and dashboards that aim to cut a lot of customisation work.

As outlined by Craig Sullivan, SVP Enterprise and International Products at NetSuite, the company needs to persuade potential customers that any digital transformation project will not involve costly, time-consuming disruptions to the business.

“Change is traditionally seen as difficult,” said Sullivan. “Loss of time and consultancy costs make the ROI challenging. However, cloud is about a lower cost of change. We’ve improved our speed of implementation and transition and our customers should see the benefits much more quickly.”

Claims of taking just 45 days to get the SuiteSuccess products up and running may be exaggerated - the tool is not a completely ‘out-of-the-box’ offering and still needs tailoring to the individual business. However, NetSuite was keen to emphasise that the work required is more like customising 10% of the system rather than 60%.

Only time will tell whether NetSuite’s plan to educate UK mid-market businesses about the benefits of cutting down on customisation will get cut through the prevailing intertia. It will certainly make next year’s Software Excellence Awards interesting reading.

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