Downturn drives demand for cloud says NetSuite

Beverley Head
Monday, 19 October 2009 11:50

IT Industry - Development

The economic downturn has driven many organisations to make the switch to cloud computing says NetSuite ceo, Zach Nelson, who is clearly hoping that new products – including an application which allows NetSuite access from an iPhone or iPod touch  - will prompt further sales.

On a visit to Sydney Nelson said that in the second quarter of the year the company had signed 270 new contracts. Although this was down on the second quarter of 2008 when NetSuite signed up 400 new contracts, he claimed that it was still a much higher rate of new business than the traditional software businesses had experienced during the downturn. “I think we are taking even more market share,” he added.

Aimed squarely at the small and medium enterprise sector NetSuite has 6,600 customers worldwide, 400 of which are in Australia.

“In terms of customers, what happened over the last year with the great recession or the little depression …is that I think it’s been good for cloud computing and companies like NetSuite because it’s actually accelerated the move from traditional on-premises applications to applications that live in the cloud for two reasons. The first is the economics fundamentally alter the game for our customers,” said Nelson.

The company released a case study of local client Fresh Produce Group which claimed that during the first 18 months of using NetSuite’s ERP it had doubled its profit margin and saved $1 million a year by identifying and reducing overheads.

“When you start looking at larger companies we are talking about real economic savings,” according to Nelson.

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