19-11-14-netsuite-founder-looks-back-and-forward-martin-veitch
Enterprise Resource Planning (ERP)

NetSuite Founder Looks Back and Forward

Evan Goldberg, a man with the wiry build of the keen squash player he is, speaks in the calm, precisely measured tone common among coders. He founded NetSuite, the Californian company that provides the ERP suite used by many modern small and mid-sized companies. But he gives credit to an earlier employer, the former Oracle CEO Larry Ellison, for the September 1998 light-bulb idea behind the company.

“NetSuite was born in a five-minute phone conversation between me and Larry Ellison,” he says when I chat with him at the company’s recent user conference in London about the genesis of the company, its progress and its future.

“I was running a company [mBED Software] that Larry always called ‘your graphics thing’. We sold tools and the tools came on CD and in this small business with 15 people we had almost as many systems as people. All of the information was not integrated… Yahoo Stores, QuickBooks, 10 customer lists and there was nowhere you could go to find out what was happening in your business.

“So Larry said ‘How’s your graphics stuff?’ and I said, well, its tough, it’s a tough market and I would kind of like to shift our focus to business software. And he said ‘If I were to do an app now it would be accounting for small businesses on the web’. I said I would kind of like to do sales stuff like Siebel and he said you’d need more, a suite because everyone in the company was going to be using it. So I got an accounting textbook...”

And so it began for NetLedger, later to become NetSuite. Meanwhile, Marc Benioff had also been talking to Ellison about a CRM a sales automation system also on the web - and so began Salesforce.com.

NetSuite is now a strong company but it has always been a slower burn than Salesforce so I ask Goldberg if he ever felt that that he picked the wrong idea by choosing to build a suite.

“I think the right people started Salesforce and the right people started NetSuite. We took on a broader problem and it was attuned to my technical interest, solving problems of inventory and so on, mission-critical processes. Marc had great experiences as a sales leader.”

NetSuite was always intended as an SMB/SME-focused operation but if Goldberg had turned a different corner he might have been duking it with the enterprise ERP heavyweights.

“I like to joke that that original vision was right except I didn’t understand the scale of the companies I would like to automate,” he says. “In my mind I thought big businesses have these things in place.”

Today, NetSuite is taking significant business at the enterprise end. He muses that NetSuite could perhaps have been the sort of company that served 50 people paying $5m each rather than five million paying $50. But then again the new generation of ‘cloud native’ companies might well be tomorrow’s Fortune 500 firms anyway so the full maturing of NetSuite as a company built to help entrepreneurs succeed has yet to come.

“We’re scaling up more methodically,” he says. “A company like [wearable camera firm] GoPro starts with a small team and finds that they can scale with all the right functions on NetSuite.”

The Oracle relationship is an interesting one. Ellison has been a major investor, Oracle used to resell the service and NetSuite is often seen as a challenger to the underbelly of SAP, Oracle and other ERPs. Could they have worked together more in lockstep?

“He [Ellison] still views them as two very different markets and Oracle has a very strong focus on the largest companies,” Goldberg says.

Also, at 16 years old NetSuite doesn’t need Oracle’s embrace.

“At the time of Small Business Suite [the name Oracle gave to its resold version] there was a lot more scepticism of the cloud and there was concern about putting your core business offerings in a cloud-based system. Having the Oracle imprimatur gave people confidence. That’s changed: NetSuite is an established company, a public company, so we don’t need to ride the coattails of Oracle. I certainly hand it to Marc [Benioff] for helping with that. People say ‘Oh my finances can’t go in the cloud’ but if you’re using Salesforce.com you’re putting your customer list in the cloud.”

Of course, the Oracle axis has also had its price with frequent, persistent suggestions that Oracle could buy NetSuite.

“That’s not proven accurate,” he laughs, shaking his head.

Goldberg remains a hands-on CTO. He’s recently been involved in architecting the NetSuite system for more datacentres “for reliability, performance and definitely for security”.

Earlier in the day he had demonstrated slick new capabilities for Android devices - the company was very quickly onto the iPhone too. Data dashboards are another eye-catching feature. I suggest these could even become the basis of a consulting services operation but he doesn’t sound overly keen on the billable-hours world.  NetSuite could, for example, point people to where they stand in terms of their operational efficiency compared to peers but data privacy remains a sensitive topic.

“The most important thing is to improve the service,” he says, “and that’s an advantage you have in the cloud. You can basically track everything and it is Big Data for sure: when people start using features and why. Data anonymised is really interesting to explore. But job one is to make sure it’s working.”

He’s realistic rather than bullish about integration, despite the fact that NetSuite and other cloud services are working together to speed deployment and tie systems together.

“Cloud makes it easier to integrate apps but they’re still speaking a different language and a lot of the old problems still exist. The hope is that there will be far fewer, not thousands or hundreds [of apps to integrate with].”

NetSuite has evolved over the years, accreting features and working its way through knotty tax issues and vertical sector needs to make it the go-to business ops suite for many, from Williams-Sonoma to Shazam. Goldberg says billing is probably the next big target: “one view of what you have to pay that’s understandable”.

I ask him for a company he admires and he gives me two. Tribe HR, the human resources online service that NetSuite recently acquired, and the iconic Apple.

“We bought TribeHR because that was a company I admired,” he says. “We get inspired by what others do. The clichéd example is Apple but we were inspired by what Steve Jobs did.”

Jobs was the driving force behind a radical reimagining of consumer technology but NetSuite is becoming remarkable also as the company that is the accounting engine, business process rulebook, operations console and e-commerce dynamo behind waves of new companies – a sort of SAP refreshed for the cloud business age.  

“One of the things I envy about consumer companies is they’re building stuff  people will use at home but with NetSuite they’re using it eight to ten hours per day,” he says.

 

Martin Veitch is Editorial Director at IDG Connect

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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