While SAP's "Core" License Business Goes Negative Over Last Four Quarters, NetSuite Bookings in the Manufacturing Sector Grow 60% in FY12
Enhanced Solution Extends End-to-End Flexible Cloud Capabilities to Modern Manufacturers Allowing Cross-Channel Coordination
New Autodesk Integration Allows Manufacturers to Run Their Entire Business from Design to Delivery in The Cloud
NETSUITE SUITEWORLD 2013, SAN JOSE, Calif.—May 14, 2013—NetSuite Inc. (NYSE: N), the industry's leading provider of cloud-based financials / ERP solutions, today unveiled its next-generation cloud manufacturing solution, bringing manufacturers to the cloud age. This new release brings to market a flexible cloud manufacturing solution, allowing manufacturers to fully run their business end-to-end. From customer-facing multi-channel sales to the production floor, the new solution offers manufacturers robust capabilities to more efficiently manufacture, forecast, price, track and schedule products, with a focus on design and a single platform for both B2B and B2C distribution.
New functionality released today includes: availability to promise (ATP), standard cost, work-in-process (WIP), and routings, extending NetSuite's overall solution breadth and depth for modern manufacturing organisations around the world. Partnerships with 3D Design and Product Lifecycle Management (PLM) partners provide NetSuite manufacturing customers with a complete solution to manage product lifecycle from design to delivery, entirely in the cloud. Leveraging these capabilities, today's modern manufacturers can accelerate innovation, produce higher–quality products at high margins, rapidly adapt to market changes and distribute across multiple channels, gaining a competitive advantage and driving success in the global economy.
Today's manufacturers face shifting economic conditions, accelerated time to value, and the need to innovate rapidly. Modern manufacturers require a system that helps them reduce costs during the design process, efficiently manage multi-channel distribution, continuously innovate and leverage a dynamic supply network, while adapting to mobile–empowered customers blurring the lines between B2B and B2C and demanding a modern Ecommerce experience. The traditional, on-premise software approach used by manufacturers, typified in legacy deployments of SAP, creates a barrier to product innovation and business growth by increasing IT costs, hence driving up the cost of production and decreasing business efficiency and accuracy.
A host of market data reinforces the shift in the cloud from legacy on-premise systems to modern cloud applications:
In a May 8, 2013 report by Investment Banking Firm Barclays, SAP's "core" business (defined by Barclays as license sales excluding Hana and Mobility) shrank by 9.2% in 1Q13, and shrank by .4% over a rolling 4 quarters1. On the other hand, NetSuite's continued investment in manufacturing functionality and manufacturing capabilities has resulted in more than 60% growth in 2012 total manufacturing bookings over the prior fiscal year.
"While SAP is busy talking about database technologies that are irrelevant to manufacturers, NetSuite is investing in next–generation cloud application solutions and partnerships that transform manufacturers' capabilities. And NetSuite's fast–growing customer base of manufacturers testifies to the appetite of global manufacturers for the transformational capacity of cloud solutions," said Zach Nelson, NetSuite CEO.
A survey of manufacturers by the research and advisory firm Mint Jutras, found that interest in cloud ERP for manufacturing rose to a record high of 51 percent in 2012, up from 42 percent in 2011.
"According to my latest ERP survey, world–class manufacturers are willing to consider cloud–ERP over on-premise by more than a 2 to 1 margin," said Cindy Jutras, Analyst at Mint Jutras. "This could have a very significant impact on ERP selection in the future. NetSuite is well-positioned to take advantage of this trend with their continued investment in functionality to run an entire manufacturing business."
Gartner, meanwhile, has predicted that 47 percent of manufacturers worldwide will be using or piloting Software as a Service (SaaS) applications by 2015, up from just 2 percent in 20102 .
Manufacturing customers like Anisa International, Flogistix, PrimaLoft™, EndoChoice, Memjet, and Jawbone have helped to drive NetSuite's success in the market. This year, Better Energy Systems became the fourth NetSuite customer in a row to receive an annual ML100 award. It joined Malcolite Corporation (2010), Laguna Tools (2011), and GoPro (2012) as recipients of the prestigious industry award for manufacturing leadership. NetSuite's agility and manufacturing functionality has been a game changer for these businesses, helping them transform their business operations.
Cloud Capabilities/Next-Generation Features Deliver Unprecedented Benefits
This dramatic growth is fuelled in part by the maturation of cloud technology for manufacturers, which several years ago was not widely considered viable because cloud solutions lacked the deeper functionality of their on-premise counterparts. That has changed with NetSuite's aggressive development and delivery of key capabilities for manufacturers.
New manufacturing functionality. Recent enhancements in manufacturing include: routing and scheduling, allowing production managers to define scheduling parameters such as setup time and run rates for each operation; creation of complex assemblies with multiple steps; and roll-up of standard costs and work-in-process inventory tracking with new multi-step functionality, enabling manufacturers to more closely manage work-in-process inventories to minimise inventory holding costs, prevent stock-outs and maximise efficiency.
NetSuite supplies a cloud solution covering such manufacturing-specific needs as shop floor and project control, multi-site and multi-division operations and warehousing, demand planning, production engineering, lot and serial control, standard costing, bill of materials and assembly builds.
Global business footprint. The NetSuite OneWorld global business solution enables manufacturers to manage overseas factories and subsidiaries, execute global financial consolidation, transact business in more than 190 currencies, communicate in nearly 20 languages and comply with local tax regulations in nearly 50 countries.
New multi-channel distribution. NetSuite SuiteCommerce makes it easy for manufacturers to seamlessly merge and open new direct-to-consumer, as well as traditional direct-to-distributors sales channels, operate secure self-service portals for B2B partners and customers, and leverage machine-generated data to efficiently automate replenishment with machine-to-machine commerce.
Complete real-time visibility into costs and customers. NetSuite delivers real-time visibility into sales, inventory, customers and more to enable manufacturers to make data–driven business decisions and adapt swiftly to opportunities and threats.
Rich customizability. The NetSuite SuiteCloud platform provides a robust environment to customise the solution to meet unique business needs; all customizations seamlessly carry over with each periodic NetSuite upgrade, eliminating concerns that plague users of on-premise systems that customizations will be lost with an upgrade.
NetSuite Autodesk Integration Drives Manufacturing Innovation
NetSuite's strategic alliance with Autodesk, a leader in cloud-based design and engineering software, delivers a bi-directional integration of cloud-based ERP with cloud-based PLM, giving manufacturers a single, closed-loop solution to accelerate product design and development, reduce risk of errors and delays, streamline supply network collaboration, and gain critical real-time visibility into pricing, scheduling, capacity and profitability.
Autodesk, which delivers a next–generation cloud-based product lifecycle management solution, is the latest ISV to partner with NetSuite to deliver manufacturing-specific value-added solutions called SuiteApps (www.suiteapp.com) to extend NetSuite with specific capabilities.
Scalability for growth. NetSuite supplies a proven and trusted platform for rapid growth.
"We could grow to become a $500 million company and NetSuite would scale with us. We know we have a solution we can rely on to accommodate our growth," said Damon Green, VP and CFO at Flogistix, a manufacturer in the energy industry.
"We're anticipating significant growth and NetSuite provides a flexible solution that works with us in that growth mode," said Tom Seaver, CFO at Insulation Manufacturer PrimaLoft™.
The NetSuite solution is increasingly used by such manufacturers as GoPro, RedBuilt, Speck, and Viridis Energy to gain a competitive advantage over rivals that labour on with on-premise, legacy, out-of-date systems. For instance, a study by Nucleus Research found that manufacturers running NetSuite reduced inventory costs by 20 percent and increased sales by up to 25 percent3. NetSuite's complete, integrated business solution complements manufacturing-specific functionality with order and inventory management, fulfilment, financials and accounting, CRM, services automation, Ecommerce and more, eliminating the pain and inefficiency of maintaining multiple disparate systems. With NetSuite, leading manufacturers are raising the bar for innovation and agility while liberating staff from inefficient manual work and channelling resources into such value-added activity as R&D, supply network optimization, and customer service and support.
Today, more than 16,000 companies and subsidiaries depend on NetSuite to run complex, mission–critical business processes globally in the cloud. Since its inception in 1998, NetSuite has established itself as the leading provider of enterprise-class cloud financials/ERP suites for divisions of large enterprises and mid-sized organisations seeking to upgrade their antiquated client/server ERP systems. NetSuite excels at streamlining business operations as demonstrated in a recent Gartner study naming NetSuite as the fastest growing financial management software vendor on a global basis. NetSuite continues its success in delivering the best cloud ERP/financials suites to businesses around the world, enabling them to lower IT costs significantly while increasing productivity, as the global adoption of the cloud is accelerating.
1Barclays Equity Research, "SAP AG The Core vs. Cloud Debate," May, 8 2013.
2Gartner, "Market Trends: Cloud Computing and SaaS Adoption in Manufacturing and Natural Resources Worldwide," March 23, 2012.
3Nucleus Research, "NetSuite's Impact on Manufacturing Company Performance," February 2011.
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Cautionary Note Regarding Forward–Looking Statements:
This press release contains forward–looking statements relating to expectations, plans, and prospects including expectations relating to the future growth of the cloud ERP market for the manufacturing industry. These forward–looking statements are based upon the current expectations and beliefs of NetSuite's management as of the date of this release, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements including, without limitation, the risk of adverse or unpredictable macro–economic conditions. All forward–looking statements in this press release are based on information available to the Company as of the date hereof, and NetSuite disclaims any obligation to update these forward–looking statements.