Cloud Computing

NetSuite's Craig Sullivan on a Globalising Cloud

UK-born but now domiciled in California, Craig Sullivan is the archetypal dry, modest Brit abroad but peers and colleagues acknowledge him as one of the unheralded reasons behind the success of NetSuite, the cloud computing pioneer that provides an e-commerce system and back-office apps for a predominantly small and mid-size business audience.

Where SAP has struggled to translate its on-premises success in ERP to the cloud, NetSuite has successfully managed the trick and is often bracketed alongside and Workday as companies that are emblematic of the online apps generation that has made life very uncomfortable for client/server era companies — and made IT services more easily consumable for customers.

Currently SVP for enterprise and international products, Sullivan has been the company’s go-to man for addressing several of the knottiest challenges in NetSuite’s growth, including global expansion. I spoke to him recently about his experiences in exporting the cloud.

Is cloud making it easier for companies like yours to sell to a worldwide audience?
The growing awareness of the cloud-based business management platforms as being superior to traditional software models for running businesses of all sizes means more and more businesses have ‘cloud’ as a criterion when evaluating new systems.

Are you seeing different rates of cloud adoption all over the world?
Certainly, some countries have been further behind the adoption curve of the United States, Australia and UK, but we are seeing demand grow rapidly all around the world. 

What about addressing local taxes, languages and legal systems?
As a cloud-based ERP system, NetSuite recognized early on that we not only needed to be able to handle these complexities as a table stake for our customers but, further, that we had an opportunity to simplify processes and help businesses lower their costs for meeting local requirements. So, we created a flexible tax and reporting architecture that today provides for VAT and related Indirect Tax reporting requirements to address as part of the business process in more than 50 countries right out of the box. NetSuite has further been deployed in more than 160 countries – more than any other single ERP system – and a single instance of NetSuite OneWorld is regularly deployed by our customers in many dozens of countries.

Further, we have spent time thinking about how our customers interact with their customers, vendors, partners, employees in the various countries they operate in. NetSuite today allows our customers to translate and communicate directly out of the system in any language they choose to – including on their eCommerce site, B2B portals, financial documents and even marketing communications. 

Are there cultural differences that need to be factored in?
Definitely. Addressing country-specific and cultural expectations of end-users around the world is the Holy Grail for global business systems. It is, however, an area where many vendors have historically fallen short, leading to adoption challenges and threatening the success of deployments overall. 

The vision we have laid out for our organisation is to provide an experience that makes our users feel like NetSuite was designed for them, wherever they may be. From fairly simple things like making sure icons and buttons don't include hard-coded English text to more challenging aspects like supporting country-specific financial statement presentation requirements or localised business processes like 'Tegata' — a traditional promissory note payment process in Japan — or the approval processes commonly adopted in certain countries (Germany is very particular in this regard), we work hard to understand the various nuances of how people do their jobs and conduct business around the world and build in as much flexibility and configuration as we can. 

Of course, this is an aspirational vision that we talk and think about almost every day within the International product team and evangelise across the rest of the organisation. But we believe it's critical to helping our customers succeed in their own business growth aspirations to be delivering a business system that meets the needs of the countries in which they operate and also enables them to engage and transact with their customers and suppliers wherever they may be in the world. 

You spent some time in Japan, setting up NetSuite’s local subsidiary. How was that?
I thoroughly enjoyed that experience, both professionally and personally. Of course, it was hard to be away from home for extended periods of time and particularly so in a country where I didn't speak the local language. I still don't speak Japanese, although I did work hard at being able to introduce myself and greet people in the appropriately respectful business cultural style, as well as how to order a beer and sushi. However, as a learning experience and opportunity to gain empathy for the culture, our local team, our partners and potential customers, it was invaluable and colours my thinking to this day. In fact, I would recommend taking the opportunity to spend an extended period of time working in another country and cultural environment to anybody — you learn an awful lot very quickly and, especially, about yourself. And you also demonstrate to the local teams and partner community that you are prepared to go the extra mile to understand, and work with, them. 

How big do you see the Chinese opportunity becoming for cloud service and application providers and what are the challenges for Western companies doing business there?
The opportunity for NetSuite in China is tremendous, particularly given the increasing engagement of Chinese businesses overseas and the rapidly growing middle class and their demand for Western brands and new classes of product from global companies. We recently worked with Shaw Industries, one of the world’s largest flooring manufacturers, who were building a new product facility in China to serve the local markets with localised product that is manufactured in the region. They are running their China and other APAC-based business operations on NetSuite and, of course, providing incredible visibility to their HQ through the cloud. 

For the time being we see enormous growth in helping businesses with their own China operational expansion aspirations, providing an ability to respond rapidly to emerging opportunity, delivering a local user experience while still retaining standardised business processes and visibility to aid decision-making.

What are the other hot emerging markets from your point of view?
Today we are seeing many markets re-emerging, so to speak, following the global slowdown of the past few years. That is particularly true in Europe where confidence has been returning and businesses are again making decisions to invest in support of growth. While we ourselves continue to expand in terms of sales and implementation activity in Northern Europe – Germany, Benelux and Scandinavia – as well as throughout Asia, we are seeing demand from global customers for a very diverse range of international markets. South America, and Brazil in particular, is a market that we see quite often. 

A classic US software organisation might make half or more of its revenue from North America. With globalisation, will that change?
There will always be the situation where revenue is reported on the basis of where the deal is signed — for us, that's where the decision makers or the customer’s HQ is based. However, what we are seeing in our own customer base is that where the deal is signed and where the application is deployed can often bear little resemblance to each other. We have US-based Enterprise customers who are buying NetSuite almost entirely to help them with their international business operations and so the number of users accessing the system locally in the US is dwarfed by the corresponding number overseas.

And, similarly, customers deploying NetSuite in the UK for their omnichannel commerce business can find themselves transacting as commonly throughout the rest of Europe as they do on their home turf. So, I think the conversation is changing from ‘where is the revenue sourced from?’ to ‘where is revenue being impacted?’ That's the approach we take at NetSuite in terms of thinking about the direction we take the product and, I believe, it's increasingly the approach our customers are taking in their own businesses.

Influential people like John Chambers and Marc Andreessen have bemoaned the effects of the NSA affair on US cloud and equipment providers. What’s your perspective?
We've gone through a period of high emotion, knee-jerk reactions and, to a degree, some scaremongering to where we are today where we are seeing the introduction of more reasoned and thoughtful guidance around how they view cloud-based products and services, the responsibilities each party has, and the benefits that it can bring many businesses to improve security and availability versus what they have been doing previously.

Is it likely that more local datacentres will need to be built?
Yes. We have previously talked about our plans for putting datacentres in Europe and we continue to work on doing just that. That is largely driven by the need to support the increased capacity demands as our business grows organically anyway but we are taking the opportunity to expand our footprint around the world. We remain on track for our stated 2015 objectives for Europe and we'll see where we go next.

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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