NetSuite rules-out shared selling as it grows channel capacity

SAN FRANCISCO – On-demand enterprise resource planning (ERP) software vendor NetSuite Inc. (NYSE: N) is moving more and more of its business through the channel and is bringing larger system integration partners onboard as it moves into the enterprise space, but channel executives say they’re satisfied with the programs they have in place to manage channel and direct/indirect conflict going forward.

NetSuite CEO Zach Nelson told attendees at the vendor’s SuiteWorld user conference that 40 per cent of NetSuite’s business went through the indirect channel in the first quarter, up from 32 per cent last year. With its move into the enterprise market, NetSuite is also signing-on larger consultancy partners such as Accenture to help it capture further market share.

To help partners capture the opportunity, Craig West, NetSuite’s vice-president of channel sales, said they’ve been investing heavily in partner enablement. A global enablement team led out of NetSuite’s Toronto office is driving a more standardized partner onboarding process, and is working with partners to set goals and assist with progress on a more granular level. They’ve also invested in partner marketing and are using technology from Brainshark to gain an analytical view around what works in marketing and what doesn’t.

There’s been a big difference in the quality and quantity of tools NetSuite has been rolling-out in its partner centre over the last few months said Paul Doucet, president of Ottawa-based NetSuite partner Enabled Success.

“There’s been more collateral to help us compete against large enterprise vendors and more marketing tools have been provided that we had to develop on our own before,” said Doucet. “Partner support has gone up tremendously over the past six to eight months.”

One challenge he’d like to see NetSuite address though is conflict between the channel and its direct sales team.

“There needs to be more cooperation from a customer and revenue sharing perspective, instead of either/or,” said Doucet. “As we get to larger dealers there’s going to be more conflict, and the rules of engagement are a little wonky.”

Doucet said he’d like to see closer cooperation and cooperative selling between the direct and indirect channels.

NetSuite’s West said they’re focused on avoiding conflict but added while they do have the ability to share deals on an ad hoc basis, the preference and plan is to not to pair two teams on one opportunity.

“I feel really strongly about conflict, and our goal is to never have conflict. And there’s no reason to have two sales teams working on the same opportunity,” said West. “Conflict is prospect-made, sometimes they’ll behave badly. There’s nothing we can do to stop conflict when that’s what the prospect wants.”

West added NetSuite did released refreshed rules of engagement earlier this year that addressed some of the cases of “drive-by customer” behaviour. He does however forsee moving to a channel-only model or carving out a large market segment as channel exclusive.

“We want to drive the channel as incremental business and we’re focused on optimized distribution as demand for the of cloudand NetSuite continues to grow. We need capacity but want to optimize in the best way possible,” said West. “We’re doing a lot to be nimble on carve-outs where partners have geographic of vertical competencies.”

Martin McNicoll, president of Monteal-based NetSuite partner ERP Guru, added they haven’t experiences much in the way of channel or direct/indirect conflicts.

“When there is one the rules of engagement make it easy to find what’s going on in our best interests,” said McNicoll.

NetSuite has about a dozen partners in Canada today, said West, and they are looking for quality partners both to round-out geographic coverage as well as provide expertise in key growth verticals.

McNicoll said they’re finding their main competitors in Canada are the on-premise vendors. Once the decision is made to go with an on-demand ERP implementation, they win most deals. In the CRM space is aggressive, but he said they’ve still won their share as well.

Follow Jeff Jedras on Twitter: @JeffJedrasCDN.

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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