NetSuite Says 2010 Is "Year of the Channel In the Cloud"

NetSuite Marc Huffman

West claimed the SuiteCloud conference here in San Francisco is likely the largest, SaaS-centric business conference for channel partners. It’s difficult to confirm that claim, but there are several hundred partners here. And they’re all plugging into NetSuite‘s cloud.

Some of the attendees, in fact, are former Microsoft Dynamics CRM and Great Plains partners. “We owe the biggest debt of gratitude to Microsoft because they make it so easy [to poke fun at Microsoft,” quipped West, following a video that attacked Microsoft’s hosting strategy.

The conversation then shifted to NetSuite’s channel efforts. “We’re known as a direct sales organization, but i want you to know that we’re evolving,” added Hufman. “We can’t flip the switch overnight. But it’s a clear priority for us. We’ve been at this for 10 years and we’re looking at our distribution efforts in every region.”

Four Claims Worth Nothing

Huffman pointed to four key themes for VARs and partners attending the conference.

1. Year of channel: The real cloud and the channel are coming together, Huffman asserted. “Over the next 6 to 12 months, this will accelerate [exponentially]. If you’re an old-school reseller… you’re finished. But the annuity model presents new opportunities for you.”

2. Doubling down on channel: NetSuite has grown its channel sales and development team by 40%, Huffman said. NetSuite has also launched channel-exclusive coverage models in Asia Pacific. And the company is beta testing vertical lead-sharing programs in such areas as Quebec, Canada.

In many regions, NetSuite continues to promote direct and indirect sales, but Huffman assured partners that the models would continue to evolve.

Separately, NetSuite has launched an OpenAir enablement effort to promote PSA (Professional Services Automation) software to customers, Huffman said. More details on that later today.

3. All about customer success: NetSuite has internal employees assisting VARs with customer retention and renewals, Huffman noted. “NetSuite doesn’t have any interest in competing with you for your clients,” said Huffman. “If you have concerns contact Craig [West] or track me down.”

4. SuiteCloud platform opens new opportunities. Evan Goldberg, founder and CTO, described how NetSuite continues to evolve its SuiteCloud platform to ensure it’s more and more customizable. Goldberg’s statements reinforce comments from CEO Zach Nelson, who claimed yesterday that NetSuite SaaS is more customizable than traditional on-premises software.

Goldberg told partners to keep an eye on SuiteFlow (Business process customization without code). It offers point-and-click business process customization; enforce business rules without a line of code; and SuiteScript in a visual interface.

Next up, stay tuned for details about NetSuite’s Tiramisu effort.

Reality Check

Whether or not you partner with NetSuite, the company has a point: Cloud applications really have gained critical mass. Channel partners that don’t sort out their SaaS strategies really will face intense pricing pressures in the years ahead.

Still, the NetSuite conference really highlighted the need for VARs to develop application-level SaaS expertise. It’s not enough to switch on a SaaS application. Channel partners need to know how to customize those applications for customers.

How much money can VARs actually make from SaaS applications? The VAR Guy will continue to explore that question in the days ahead.

Sign up for The VAR Guy’s Newsletter; Webcasts and Resource Center; and follow The VAR Guy via RSS; Facebook; Identi.ca; Twitter and VARtweet.