What's going on with Oracle NetSuite?
Let's talk to the guy who has been there since day one.
I'm Michael Krigsman.
I'm an industry analyst and we're talking with Evan Goldberg of Oracle NetSuite.
Hey, Evan, how are you?
I'm great.
Good to talk to you.
Evan, how long ago did you start NetSuite?
Eons.
[Laughter] It was 1998, relatively early days of the Internet.
Now, of course, you're part of Oracle.
Give us a sense of the growth trajectory of NetSuite since that time to today.
People really didn't think much about business applications running on the Internet back
then and we were one of the earliest companies to do that.
Back then, it was a new idea.
We had early adopters.
Over the course of the past 20 years, it's become the de facto standard for how you run
business applications and I expect that to be true far into the future.
What actually gave you the idea to take this business application or set of applications
and run it in the cloud?
I had run, as CEO, a previous business and it didn't succeed, but I did learn a lot.
I got my cliché Silicon Valley failure out of the way, but I learned a lot about running
a company and the dearth of tools to help you run that company effectively.
We had a smorgasbord of applications we were running.
Really, the idea came from that, kind of a fast-growing business have these tools that
they can really see what's happening across their entire business.
That was really the driver and the cloud--it didn't have that name back then--was really
the means because the only way you could run an application that everyone in the company
is going to use is, you needed professionals to run the databases and things like that.
Technology, really, was out of reach out of the small companies that we were targeting
way back in the day.
The idea then was to take the sophisticated technology and separate it from the customers
so that they could focus on running their business.
Exactly.
Really, for us, what we were trying to deliver was a dashboard, and that's really still,
to this day, the centerpiece of NetSuite.
That's what you see when you log into NetSuite.
It's a dashboard of everything going on across your business: in finance, in sales, if you
have an e-commerce website, all of your back office, supply chain, et cetera are kind of
all in one place.
Anytime anywhere is what the cloud delivered for these geographically disbursed organizations,
especially the modern organization that may have a lot of remote workers.
Everybody is working off of the same playbook, the same dashboard.
I know the software has become richer and bigger over time, but the core mission, has
that changed from or evolved from when you started the company to today?
Well, certainly, we've added more sophistication and been able to deal with more sophisticated
business.
I think one of the largest trends is that we've been able to verticalize some of the
capabilities to really make them appropriate for different segments of the marketplace.
Really, coming back into Oracle has clarified our mission and, whereas, when we were independent,
we were going in a few different directions, going to larger companies; being part of Oracle,
we've really, really been able to focus on our wheelhouse, which are these fast-growing
businesses from startup into their hypergrowth phases across a lot of different verticals.
That's been really gratifying to get back to our roots.
It's the fast-growing businesses that are your sweet spot and your goal right now.
Absolutely.
They might be 50, 100, 500 employees.
They might be $20 million, $50 million, $100 million in revenue and growing really fast.
They're running on software that they got when they were still operating in a garage.
Just like with my company way back in the day, things start falling on the floor as
your company grows and you're not necessarily delivering orders as effectively.
If you're a service company, your projects aren't going as well, and you realize that
you need to tie things together within your company.
You can't do it as a personal entrepreneur.
You don't know every employee.
You don't know every customer any more, and that's when systems become important.
Over this period of time, how have customer expectations changed?
We're seeing a new generation of business user.
For example, here at NetSuite, we have a ton of recent college graduates.
They may be business majors.
They're coming in and they're helping sell, implement, or service NetSuite.
These employees, I can see from them and how they expect to use their business software,
they're coming obviously having used the Internet from when they were kids and it comes completely
naturally to them.
They have a computer on their phone that's incredibly powerful.
They're expecting to use all those capabilities in the same way as they have them in their
life at home.
They come with the expectation that their life at work is going to be as rich, as approachable,
and as powerful.
What are the implications of that for you at NetSuite?
Definitely a singular focus on making the best possible user experience.
Again, these applications in certain occupations, they're being used all day every day, eight,
ten hours a day.
The amount of productivity that we can deliver by making the system easier to use, easier
to learn, and that really comes from really borrowing some of the techniques that we're
seeing in some of the consumer applications and also innovating on our own.
Evan, I know that, in the early days, you were the product designer and even in recent
days.
To what extent do you still have hands-on with the product design?
Well, still, I view my most important is to make sure that we're delivering the best possible
service, and that starts with the design of the product.
Now, we have incredible people.
They're trained in design thinking and they follow a methodical process but also use their
creativity to come up with great solutions.
Still, I like to keep my hands in it and one of the things that's most important for NetSuite
is all of the pieces work really well together.
Having that overarching view, also having the interaction with customers that I do,
I feel like I can continue to add value working with the team and that's certainly, probably
my favorite part of my job is to just digging in and looking at how we're going to solve
customer problems with the new capabilities that we're adding into NetSuite.
How much time do you spend with customers?
I spend a decent amount with customers, both obviously visiting them, but just in interactions
in the user group, on email, et cetera.
That's incredibly important.
It's important for everybody in the company, really.
Obviously, the people that are selling it and implementing it, they're living with the
customer day-to-day.
The people that are developing the service, the people that are delivering the service
in terms of the data center, all of them benefit from seeing how NetSuite improves the working
lives and the success of these entrepreneurs that are using it on a day-to-day basis.
It helps them succeed.
In a broader kind of strategic or trajectory sense, how do you take this customer input
and then make the decisions; we need to go here or we need to go there?
You're not just going to follow the list of things that customers are asking for.
They're not privy to all the kinds of things that you could possibly do.
I think it's really a collaboration and it's a synthesis of the things that they are requesting
from their use of the product and the ideas, innovations that you have.
This is especially true when there are new technologies available like machine learning.
You won't necessarily get a lot of customers saying, "I wish you were able to tell me which
projects were at risk," because they don't even know that it's possible.
It's really a synthesis, but when we have an idea that we think is great and we think
that we're sort of skating where the puck is going -- we like to use those Canadian
analogies -- we certainly need to kind of corroborate that information by going to customers
and saying, "Here's what we're thinking about.
Do you think that would help you?"
Then, obviously, collaborate with them on the design of new capabilities.
As a product designer for decades now, can you shed any insight on what you've learned
that makes customers want to adopt a new version or features?
That's what design thinking is all about.
It's about empathizing.
It's about really looking at the personas that are going to be using it and thinking
about the big picture for them.
What are their pain points?
If you go to customers and they tell you, "This is my pain point on a day-to-day basis,"
you keep your focus on that and making that easier.
Then, of course, you want to astonish them with how you make it easier.
That's about the creativity.
That's about using the latest capabilities on the iPhones, just everywhere there are
these powerful new technologies, machine learning.
Ultimately, you're bringing all that to bear on the customer problem and staying focused
on the problem we're solving.
Who has this problem?
What are we trying to do for them?
How do we want them to use it?
Staying focused on that the whole way through the design process and really realizing that
design is a means to an end not an end in itself.
It's a combination then of the functionality married to the user experience.
Right.
That's a much more pithy way of putting it than I had.
[Laughter] [Laughter] How do you make the investment
decisions about what to develop and what not to develop?
This especially becomes challenging when you're working in lots of different segments, lots
of industry segments, lots of different verticals.
We have very powerful capabilities for product companies, and we have very powerful capabilities
for service companies.
We do a lot of analysis of where our fit is already good and can be better, where there's
a lot of need.
Obviously, again, we can look at our customer base.
We have an enormous amount of data about our customer base, how they use it, and they're
feeding that back to us.
They really are, generally, data-driven decisions and, again, there are so many great tools
now to analyze data.
We have so much data to analyze, picking the right questions.
If you pick the right questions, you can get some great answers.
Evan, you mentioned earlier that the focus is on fast-growing companies.
What does that imply for the evolution of the NetSuite product?
Well, the good news is, I expect they'll always be fast-growing companies, [laughter] so there's
no end to that.
I think there are a lot of different trends, technology trends that are important; ever-increasing
access to data, ever-increasing computing power to do machine learning.
I think that, again, keeping the focus on the problems that users are trying to solve
and, as companies grow, they get more complex.
They find other areas that they need to automate.
Again, especially in specific vertical markets.
For us, a huge trend is understanding, at a deeper level, these micro-verticals, not
product companies, not manufacturers, but apparel manufacturers or food and beverage
distributors and getting down to that level.
It may seem a little mundane, but it's exactly what our customers want.
They want a product that's designed for them and that really looks and feels like what
they expect, in their particular mode of business, a product to look like.
You raise a very interesting question, which is, how do you as software designers gain
the knowledge and the insight of these micro-verticals and micro processes to make the software useful
to these folks?
A lot of how we built our organization over the past few years has been bringing in industry
experts, subject matter experts, some of whom have worked in the industry themselves or
have been working with that industry for a long time.
It's great.
The engineers love it because the precision that they can specify the problem is great.
That's definitely been a trend, and it's across the organization and the people that implement.
We do that on a vertical basis.
We have experts in your industry that are going to be implementing NetSuite for you
and understand your pain points and what makes your company tick.
That's the core of your strategy then going forward are these verticals and then narrowing
down into the micro-verticals, as you described it.
Absolutely.
I think that and then continuing to deliver a world-class user experience across all these
different verticals, I think those are the two major trends that will drive us.
In the larger sense, what's driven NetSuite is, again, the fact that everything works
together.
As people may start implementing NetSuite to do their accounting and financials, soon
they'll branch into supply chain.
They may adopt our HR capabilities, SuitePeople.
They may go into commerce.
As they use more of the suite, they get exponential value because of all the great connections
we make between the different parts of the system that mirror all the connections you
have as an actual functioning organization that may be at risk of becoming siloed.
With systems like NetSuite and using discipline, you can keep your business processes, that
tend to cross departments, working really smoothly.
That's the other major area that we've always focused on and will always continue to focus
on.
We call it Unlocking the Suite.
Do you sense any resistance now to the cloud?
Years ago, there was resistance, concerns about security and control over data.
Do you sense resistance now at all?
No, and we saw the tipping point several years ago.
I used to have these discussions.
People that implement NetSuite often are driven by CFOs, potentially that are inherently conservative.
There was another cloud product, a company that started a few months after us, that had
a lot of success in sales.
Inherently not quite as conservative, willing to put their business information on the Internet,
and I always found that humorous that CFOs didn't want to put their financials on the
Internet.
Yet, they seemed to be comfortable with all of their customer information and sales information
going on the Internet.
[Laughter] I'd have that discussion.
Now, I don't have those discussions anymore.
I think it's the last remaining on-premise vendors that now have to have the discussion,
"Why would I want to maintain my own data?
Why would I want to have to deal with making sure I've done the latest patch of my database?"
et cetera.
There definitely was a flip a few years ago and it's not a conversation we really typically
have anymore.
This cloud thing seems to have worked out pretty well.
It seems like it's going to stick.
[Laughter] I don't know if it's going to be a thousand
years like Larry Ellison predicted, but I think it's going to do pretty well for a while.
Evan, as we finish up, you see and have seen many, many NetSuite implementations across
a range of customers.
I think customers get concerned when they hear the term "ERP."
What advice do you have for customers on running a smooth, easy implementation?
Our customers get the sales and implementation of their product through something called
SuiteSuccess, obviously, the goal being success.
What that entails is the fact that when we're demoing the product initially to the customer,
they're seeing exactly what's going to get implemented.
There might be some small tweaks we make for their company, but we've made these SuiteSuccess
editions for going down to micro verticals like apparel, and so they're seeing a product
that's already tailormade for their industry.
Not every company is alike, but they are a lot alike once you go down to that level of
industry.
My advice would be to make sure that what you're being shown is tailored to you, is
right for your type of business.
That's what you're going to get at the end of the day when all is said and done.
You can see a lot of shiny bells and whistles and then not realize them when the day comes,
that first day that you turn it live and your users see it for the first time.
That's something that we're really focused on; delivering solutions through SuiteSuccess
that are right for your business and that what you see is what you get.
That close fit between the software and your business is a crucial dimension of smooth
success with an implementation.
Right and we've implemented hundreds, sometimes thousands of companies within a particular
segment.
We're taking all that learning about these segments and building it in, so there really
is a collaboration.
What we find with customers is they really appreciate getting those best practices built
in, not having to reinvent them.
Then, of course, the last mile is making sure that it gets tailored, and NetSuite is incredibly
flexible.
It's really easy to tailor.
Taking those industry best practices and then tailoring them.
Really make it right for your business.
That's, I think, the secret to success in that daunting ERP implementation.
Evan Goldberg, thank you so much for taking time to speak with us today.
Thanks so much for having me.