The new base will provide sales, consulting, and support to Canadian and worldwide customers of NetSuite, NetSuite Small Business, NetCRM, NetERP, and NetCommerce, and will be run by Steve Frappier, formerly of Oracle Corp. The company has in the region of 7,500 customers in the US, Europe, Asia, and Canada.
The company also announced a host of Canadian customer and partner wins including Canadian channel partners who had previously sold client-server software from Microsoft and ACCPAC, but have taken on the NetSuite on-demand opportunity.
The Canadian move is part of its cautious expansion plans and follows a UK relaunch earlier this year. The company effectively reopened its UK business after being let down by BT offshoot Open Orchard. In November 2002 it partnered with the newly created BT-backed UK software solutions provider but Open Orchard failed to flourish and was reabsorbed into BT. In early 2004 NetSuite tried again, coming to market using a direct sales model, setting up a UK base within Oracle’s UK HQ and putting together a localized UK version of its suite.
International expansion is an important next step for all the on-demand companies because the phenomenon is still US-centric with even the leaders in the market deriving the vast majority of their revenues from their native US markets. Of Salesforce.com’s business, 20% is split between Europe and Asia-Pacific while Right Now Technologies derives 75% of its revenue from the US, 19% from Europe, and the remainder from Asia-Pac.
Right Now CEO Greg Gianforte said Europe has been slower to adopt the on-demand model but said the market is building. The UK is the most advanced within the European region, and there are signs of growth in France and Germany.
Commenting on the US-centric trend, Salesforce.com’s Jim Steele said European and Asia-Pac companies had been also been slower to adopt the first wave of client-server based ASPs that largely failed to meet expectations. Having watched their US contemporaries get burnt, they were relieved they had not got involved but Steele said non-US business is starting to grow, having had early successes in English-speaking countries and the Nordic region, and is now seeing growth in Germany and France. I believe we are at the tipping point where business will accelerate in Asia-Pac and Europe because they were waiting to see the model proven, he said.
