a decade in saas
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A Decade in SaaSStories from the front line
A Decade in SaaSStories from the front line
Dean StockwellProfessional Services Director (APAC)
NetSuite Inc.
Dean StockwellProfessional Services Director (APAC)
NetSuite Inc.
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Agenda
Benefits of SaaS
The Real-World of SaaS
– Customer Expectations
– Enterprise SaaS - Case Study
Asia/Pacific Landscape
Future of SaaS
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3
Forward Looking StatementsThis presentation contains “forward-looking” statements that involve risks, uncertainties
and assumptions. If the risks or uncertainties ever materialize or the assumptions prove
incorrect, our results may differ materially from those expressed or implied by such
forward-looking statements. All statements other than statements of historical fact could be
deemed forward-looking, including, but not limited to, any projections of financial
information; any statements about historical results that may suggest trends for our
business and results of operations; any statements of the plans, strategies and objectives
of management for future operations; any statements of expectation or belief regarding
future events, technology developments, or enforceability of our intellectual property rights;
and any statements of assumptions underlying any of the foregoing.
These statements are based on estimates and information available to us at the time of this
presentation and are not guarantees of future performance. Actual results could differ
materially from our current expectations as a result of many factors, including but not
limited to: quarterly fluctuations in our business and results of operations; our ability to
address market needs and sell our applications and services successfully; and the effects
of competition. These and other risks and uncertainties associated with our business are
described on Form S-1/A filed with the SEC on December 19, 2008, and available via
www.sec.gov. We assume no obligation and do not intend to update these forward-looking
statements.
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No Such Thing as a “Free Lunch”
Introduction to Netsuite
Questions for Audience
– Knowledge of Netsuite prior to this week ?
– Who is using SaaS technology ?• Webex ?
• Internet Banking ?
• Hotmail ?
– What is the difference between SaaS and “The Cloud”
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1998: NetSuite Founded by Larry Ellison and Evan Goldberg
2000: Creates World’s First Integrated SaaS Suite Application
2006: Grows to nearly 6000 customers
2007: IPO on NYSE - Ticker Symbol “N”
2008: Introduces NetSuite OneWorld, enabling multi-company consolidation in the cloud
NetSuite Background
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The Typical On-Premise Way
Accounting
SFA
Support
WebWarehousing
Excel
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Marketing Campaigns
Sales Force Automation
CustomerSupport
Partner Relationships
Order Management
Accounting/Financials
Inventory
PayrollPurchasing
Shipping
VendorPortal
Customer Portal
Web Site
Web Store
EcommerceManager
ShippingManager
Support Manager
CEO
Sales Rep/Manager
CFO
SINGLEDATA
REPOSITORY
Customers
Vendors Partners
The NetSuite SaaS Way
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Netsuite Annual Revenue
2008 Revenue: $152.5M (40.5% increase YOY)
Over 1.3 Million Unique Log-Ins
Q4 2008 Financial Results press release dated 2/10/09 contains GAAP to
non-GAAP reconciliation and is available on NetSuite website.
SaaS Gaining Momentum
$1.1$3.1
$8.3
$17.7
$36.4
$67.2
$108.5
$152.5
$0M
$20M
$40M
$60M
$80M
$100M
$120M
$140M
$160M
2001 2002 2003 2004 2005 2006 2007 2008
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Worldwide SaaS Market Growth 2007-2012
CA
GR
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
On-Premise ERP
16.00%
18.00%
Source: IDC and Gartner
SaaSCRM
20.00%
22.00%
24.00%
26.00%
28.00%
On-Premise CRM
11.9%
7.6%
18.5%
SaaSERP
26.8%
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McKinsey Says 40% Better TCO
1,6402,298Total Costs (including those not shown here)
092Unused licenses
0308Unscheduled downtime
Other
1,500480User licenses, subscriptions, maintenance
Software
0750Data center facilities rental, operations, security, compliance,
monitoring of incident resolution
094Mainagement, customization of business process change
34101Training
Ongoing operations
030Application infrastructure testing, deployment
054Basic Infrastructure testing, deployment
72108Customization, integration
Implementation, deployment
Software as a Service Software on Premises
1,6402,298Total Costs (including those not shown here)
092Unused licenses
0308Unscheduled downtime
Other
1,500480User licenses, subscriptions, maintenance
Software
0750Data center facilities rental, operations, security, compliance,
monitoring of incident resolution
094Mainagement, customization of business process change
34101Training
Ongoing operations
030Application infrastructure testing, deployment
054Basic Infrastructure testing, deployment
72108Customization, integration
Implementation, deployment
Software as a Service Software on Premises
Total Cost of Ownership, $ thousand
Sample deployment of CRM software (200-seat license)
The McKinsey Quarterly, Delivering Software as a Service 6/2007
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Other Benefits of SaaS
Instant access, anytime, any place
All users on a single version
– Upgrade friendly architecture
– More efficient to support, maintain and educate
Real-time data, multiple geographies
Real-time implementation
Device connectivity
Application connectivity
– Within the cloud
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The Real-WorldCustomer Expectations
100% Available, no down-time
100% Secure
Self-Implementing, self-configuring
On-premise option available
– Bigger companies
Free software / free implementation
– Isn’t everything on the internet free ?
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The Real-WorldReality Check
99.5% Available
– Uptime to this level should be guaranteed by the vendor
Secure and audited to global standards
– Transparency, SAS70 etc.
On-Premise option not feasible
– Financial benefits of SaaS require volume
You have to pay for it
– Zero piracy issues (so far)
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Case Study - Jollibee
Largest fast food company in the Philippines
Heavy investment in on-premise enterprise ERP
Requirement for system in emerging markets
Need to do it much faster and cheaper
– Needed to be live in less than 6 months
No desire to recruit IT staff in each of the emerging regions
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Business Benefits Realised
Time to Value
– 4 months for SaaS v 18+ months for on-premise
Lower Cost of Entry
Lower TCO
Centralized Deployment
– Tighter control of the project
– Go Live = User Training
More Responsive Platform
Enabler of Shared Service Strategy
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SaaS Trends – Asia/Pacific
Strong appetite for SaaS
Average Customer Size is Increasing
– Increased confidence
– Awareness at “C” level
– Benefits difficult to ignore
Global subsidiaries, smaller footprint
– Emerging markets driving adoption
– SaaS More Popular for Green Field Sites
– Often no Legacy Systems to replace
Political considerations
– Most SaaS vendors host in US
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Asia/Pacific – Early Adopters
Australia
– Early adopters of new technology
– Large base of SME’s
Philippines
– Entrepreneurial
– Leverage SaaS infrastructure v build
Singapore
– Entrepreneurial
– SME’s with Government incentives
– Enterprise more conservative
– SI’s need to take a leap of faith
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The Future of SaaS (next 3 years)
Further Innovation
– We have only just scratched the surface
– Most new development projects on SaaS platform
– Most legacy vendors trying to get there
– Increased verticalisation
Cloud Connectivity
– Application integration in the cloud
– Cross-application automated workflow
– Device proliferation
Improved Infrastructure
– Redundancy and Reliability
– More “Oxygen”
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“Everything that can be invented, has been invented”
Charles H Duell, Commissioner US Patent Office, 1899
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Web FactsThe last 5,500 days…..
Most fault-tolerant machine ever built100 billion clicks per day1 billion PC chipsConsumes 5% of the planet’s electricityRoughly the same complexity as one human brain….
But your brain does not double in power every 2 years…..
At the current rate of growth, by 2040 the Web would exceed the processing power of humanity
“5000 days of the web”, Kevin Kelly
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Q & AQ & A