A Decade in SaaS
Stories from the front line




 Dean Stockwell
 Professional Services Director (APAC)
 NetSuite Inc.



...
Agenda

 Benefits of SaaS
 The Real-World of SaaS
 – Customer Expectations
 – Enterprise SaaS - Case Study
 Asia/Pacific L...
Forward Looking Statements
 This presentation contains “forward-looking” statements that involve risks, uncertainties
 and...
No Such Thing as a “Free Lunch”

 Introduction to Netsuite

 Questions for Audience

  – Knowledge of Netsuite prior to th...
NetSuite Background

 1998: NetSuite Founded by
 Larry Ellison and Evan Goldberg

 2000: Creates World’s First Integrated
...
The Typical On-Premise Way

                             Web
Warehousing




                                             ...
The NetSuite SaaS Way
                                                  Customers

                 CEO                   ...
SaaS Gaining Momentum

                 Netsuite Annual Revenue


$160M                                                   ...
Worldwide SaaS Market Growth
2007-2012
                               26.8%
        28.00%

        26.00%

        24.00%...
McKinsey Says 40% Better TCO
                                                                                             ...
Other Benefits of SaaS
 Instant access, anytime, any place
 All users on a single version
  – Upgrade friendly architectur...
The Real-World
Customer Expectations

 100% Available, no down-time
 100% Secure
 Self-Implementing, self-configuring
 On-...
The Real-World
Reality Check

 99.5% Available
  – Uptime to this level should be guaranteed by the vendor
 Secure and aud...
Case Study - Jollibee

 Largest fast food company in the Philippines
 Heavy investment in on-premise enterprise ERP
 Requi...
Business Benefits Realised

 Time to Value
  – 4 months for SaaS v 18+ months for on-premise
 Lower Cost of Entry
 Lower T...
SaaS Trends – Asia/Pacific

 Strong appetite for SaaS
 Average Customer Size is Increasing
  – Increased confidence
  – Aw...
Asia/Pacific – Early Adopters

    Australia
     – Early adopters of new technology
     – Large base of SME’s
    Philip...
The Future of SaaS (next 3 years)
 Further Innovation
  –   We have only just scratched the surface
  –   Most new develop...
“Everything that can be invented, has
  been invented”
      Charles H Duell, Commissioner US Patent Office, 1899




    ...
© Copyright NetSuite Inc., All Rights Reserved.
Web Facts
The last 5,500 days…..
 Most fault-tolerant machine ever built
 100 billion clicks per day
 1 billion PC chips
 ...
Q&A
      © Copyright NetSuite Inc., All Rights Reserved.
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A Decade in SaaS

  1. 1. A Decade in SaaS Stories from the front line Dean Stockwell Professional Services Director (APAC) NetSuite Inc. © Copyright NetSuite Inc., All Rights Reserved.
  2. 2. Agenda Benefits of SaaS The Real-World of SaaS – Customer Expectations – Enterprise SaaS - Case Study Asia/Pacific Landscape Future of SaaS © Copyright NetSuite Inc., All Rights Reserved.
  3. 3. Forward Looking Statements This 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. © Copyright NetSuite Inc., All Rights Reserved. 3
  4. 4. 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” © Copyright NetSuite Inc., All Rights Reserved.
  5. 5. NetSuite Background 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 © Copyright NetSuite Inc., All Rights Reserved.
  6. 6. The Typical On-Premise Way Web Warehousing SFA Excel Accounting Support © Copyright NetSuite Inc., All Rights Reserved.
  7. 7. The NetSuite SaaS Way Customers CEO CFO Accounting/ Financials Shipping Inventory Shipping Sales Rep Manager Purchasing Payroll /Manager SINGLE Sales Force DATA Automation Web Store REPOSITORY Marketing Campaigns Web Site Ecommerce Order Support Manager Management Manager Customer Portal Partner Relationships Vendor Portal Customer Support Vendors Partners © Copyright NetSuite Inc., All Rights Reserved. 7
  8. 8. SaaS Gaining Momentum Netsuite Annual Revenue $160M $152.5 $140M 2008 Revenue: $152.5M $120M $100M $108.5 (40.5% increase YOY) $80M $67.2 $60M $36.4 Over 1.3 Million Unique $40M $17.7 Log-Ins $20M $8.3 $3.1 $1.1 $0M 2001 2002 2003 2004 2005 2006 2007 2008 Q4 2008 Financial Results press release dated 2/10/09 contains GAAP to non-GAAP reconciliation and is available on NetSuite website. © Copyright NetSuite Inc., All Rights Reserved. 8
  9. 9. Worldwide SaaS Market Growth 2007-2012 26.8% 28.00% 26.00% 24.00% 22.00% 18.5% 20.00% 18.00% CAGR 16.00% 14.00% 11.9% 12.00% 10.00% 7.6% 8.00% 6.00% 4.00% 2.00% 0.00% On-Premise SaaS On-Premise SaaS ERP ERP CRM CRM © Copyright NetSuite Inc., All Rights Reserved. Source: IDC and Gartner
  10. 10. McKinsey Says 40% Better TCO Total Cost of Ownership, $ thousand Software on Premises Software as a Service Implementation, deployment Customization, integration 108 72 Basic Infrastructure testing, deployment 54 0 Application infrastructure testing, deployment 30 0 Ongoing operations Training 101 34 Mainagement, customization of business process change 94 0 Data center facilities rental, operations, security, compliance, 750 0 monitoring of incident resolution Software User licenses, subscriptions, maintenance 480 1,500 Other Unscheduled downtime 308 0 Unused licenses 92 0 Total Costs (including those not shown here) 2,298 1,640 Sample deployment of CRM software (200-seat license) The McKinsey Quarterly, Delivering Software as a Service 6/2007 © Copyright NetSuite Inc., All Rights Reserved.
  11. 11. 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 © Copyright NetSuite Inc., All Rights Reserved.
  12. 12. The Real-World Customer 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 ? © Copyright NetSuite Inc., All Rights Reserved.
  13. 13. The Real-World Reality 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) © Copyright NetSuite Inc., All Rights Reserved.
  14. 14. 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 © Copyright NetSuite Inc., All Rights Reserved.
  15. 15. 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 © Copyright NetSuite Inc., All Rights Reserved.
  16. 16. 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 © Copyright NetSuite Inc., All Rights Reserved.
  17. 17. 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 © Copyright NetSuite Inc., All Rights Reserved.
  18. 18. 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” © Copyright NetSuite Inc., All Rights Reserved.
  19. 19. “Everything that can be invented, has been invented” Charles H Duell, Commissioner US Patent Office, 1899 © Copyright NetSuite Inc., All Rights Reserved.
  20. 20. © Copyright NetSuite Inc., All Rights Reserved.
  21. 21. Web Facts The last 5,500 days….. Most fault-tolerant machine ever built 100 billion clicks per day 1 billion PC chips Consumes 5% of the planet’s electricity Roughly 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 © Copyright NetSuite Inc., All Rights Reserved.
  22. 22. Q&A © Copyright NetSuite Inc., All Rights Reserved.
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