NetSuite is focused on helping midsized companies and divisions of large corporations manage their core business processes in a single system. The company's main offering is a cloud-based business management software called NetSuite that automates operations and streamlines processes in the areas of accounting, customer relationship management (CRM), e-commerce, enterprise resource planning (ERP), and inventory. In addition to NetSuite, the company offers OneWorld and NetSuite CRM+ designed for use by most types of businesses. OpenAir is designed for professional services businesses. The company serves customers in the consulting, distribution, manufacturing, retail, and software industries, among others.
NetSuite serves the US and international markets through nine offices in the US, Canada, Europe, Asia, and Australia. About 75% of the company's revenues are generated in the US.
The company operates in single reportable segment focused on providing cloud-based business management applications.
Sales & Marketing
NetSuite maintains its own sales offices and its sells through partnerships with other software vendors, systems integrators, and value-added resellers (VARs). It generates revenue through subscription fees and professional services fees. Professional services include consulting and support of business process mapping, configuration, data migration, integration, and training. Its customer base is mainly made up of mid-market companies and divisions of large companies across a range of industries, including Igloo, Guitar Center, and Prudential.
NetSuite took in about $236 million in revenues in 2011, representing a 22% increase over the previous year. Most of the gains came from new customers for its software subscriptions and related support services, driven partly by sales of the company's OneWorld product. Existing customers only accounted for about 2% of the increase. Sales of professional services grew by 26%, also due to new customer acquisition. The company's international sales represented just over one quarter of sales.
Despite the growth, NetSuite did not turn a profit in 2011. The company has not had a profitable fiscal year since its inception. Operating costs were about 15% higher for the year due to increased spending in the areas of product development, sales, and marketing.
The company's growth strategy focuses on securing contracts with larger clients, increasing the use of NetSuite by businesses as a complete enterprise application platform, and pursuing more vertical market opportunities. To achieve these goals, the company is pushing for the adoption of its OneWorld ERP, CRM, PSA (professional services automation), and e-commerce system among enterprise clients in a variety of industries, while retooling and updating products tailored for specific sectors. NetSuite has also addressed demand for cloud computing with its family of SuiteCloud development tools, which enable third parties to customize NetSuite's products by integrating them with their existing business management systems.
The company's flagship NetSuite platform consists of NetSuite ERP, SuiteCommerce, and NetSuite CRM+. Designed for larger, globally-distributed businesses, its OneWorld product adds business intelligence and service resource planning features. NetSuite's OpenAir product is used to automate functions related to project and resource management, accounting, expenses, and reporting.
Oracle CEO Larry Ellison owns a 53% stake in NetSuite, which was founded in 1998 – less