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NetSuite makes Asian foray

By Aaron Tan, ZDNet Asia on September 8, 2005

Summary

The hosted applications service provider is using Singapore as a launch pad to other Asian markets, including Hong Kong and China.

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SINGAPORE--NetSuite is making its foray into Asia, starting with the island-state.

From its Singapore office, the hosted applications service provider of CRM (customer relationship management) and ERP (enterprise resource planning) products will offer professional consultancy services, sales and technical support to Asian customers. Small and midsized businesses (SMBs) currently form the core audience of NetSuite products.

"Twenty-five percent of our business comes from distributors, and Singapore is attractive to us because of the huge number of SMBs who are distributors," Zach Nelson, the company's president and CEO, told ZDNet Asia in an exclusive interview.

"Asia is a strategic growth area for NetSuite. The strong manufacturing base in Asia means products have to be distributed. That's the sweet spot of what NetSuite does," Nelson said.

He revealed that the company was receiving thousands of sales leads from Singapore, all of which were serviced by its office in the United Kingdom--until now. "It was a natural progression to open an office here," he said.

"I expect Asia to grow at a similar rate as Europe," Nelson said. "We had two people when we went to Europe. A year later, there were 60 people because the demand for our products (to be) delivered as a service is really high right now."

NetSuite already has 30 customers in Singapore, even without the presence of a local office, he added. SurgiLance, for example, uses NetSuite to manage the company's inventory, accounting and customer information from a single Web-based system. The company makes and distributes safety medical devices.

Singapore's good Internet infrastructure also clinched Netsuite's confidence in the island-state. "Our customers here are accessing our data centers in California and there are no bandwidth performance issues, so we didn't have to invest in another data center."

He added that a year from now, the company's Asian staff strength is likely to be boosted from 10 to 60 employees, including possible headcounts in Hong Kong and China where NetSuite is also targeting to establish a footprint.

So far, only 15 percent of NetSuite's revenues come from outside the United States, and "Asia contributes a small piece to that," Nelson said. "But I believe in two years, Asia itself will contribute 10 to 15 percent to revenues on its own."

And he hopes to achieve that by providing more than just CRM products.

"Although we do standalone CRM deals, customers have bought our products to run the front- and back-office in a single application," he explained. NetSuite products allow customers to manage multiple applications, including CRM, ERP and e-commerce functions, from a single database.

"If you buy separate CRM and ERP packages and can't tie them together, they will never work," Nelson said. "If the biggest companies in the world can't make that work, how is the SMB ever going to make it work?"

"When customers call, they want to know if their items were shipped. If you need to toggle between (ERP and CRM) systems to find out, you are not going to be delivering good customer service," he added. "Particularly, for distribution companies, having CRM and ERP integrated is important. Running them separately is insane."

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