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Cloud ERP Experiencing Huge Growth

By December 19, 2011Article

Editor’s note: Looking forward to 2012, we asked NetSuite to share some of the trends they’re seeing among the buyer community. What is the biggest potential mistake buyers will make in 2012 regarding cloud solutions?
Paul Turner: Procuring cloud solutions is clearly on IT’s agenda. As an example, IDC recently forecast the cloud to grow at 4X the rate of the IT market. But IT departments need to adopt cloud applications strategically. Because cloud applications can be deployed so quickly, it’s easy to end up spending on multiple cloud applications across different lines of business – one for sales, one for service, financials, Web, billing, etc. This makes vendor management difficult, not to mention reporting and integration challenges. So a cloud business suite, rather than point cloud applications can make a lot more sense for growing businesses, from a cost and resources standpoint.
Also, IT needs to be careful not to be misled between legacy-hosted solutions masquerading as cloud versus true multi-tenant cloud solutions. True cloud solutions are typically more cost-effective over the long term. From a relationship aspect, how will cloud providers and their customers interact differently in 2012?
Paul Turner: What’s changing is that increasingly VARs and SIs are reselling and/or offering implementation services for cloud applications. In the past, many of them offered only on-premise solutions, but the growth of the cloud has meant they’re upgrading their expertise and business models. We’re seeing a huge growth in our channel, with VARs adding NetSuite to their existing offerings, or switching wholesale.
This change gives IT a great opportunity to work with a broader range of implementation providers skilled in deploying cloud ERP solutions, and provides IT with a broader range of choice to tap industry-specific knowledge, geographical or other domain expertise. You mentioned cloud ERP solutions. What trends is your company seeing in this area?
Paul Turner: Cloud ERP is now mainstream. Some of the world’s fastest growing businesses such as Groupon chose NetSuite in 2011, and some of the largest enterprises like Qualcomm are deploying NetSuite cloud ERP within their business. In fact, we reached a milestone of over 10,000 organizations in 100+ countries running on NetSuite.
According to a Gartner report published in 2011, NetSuite grew market share by over 30%+ year on year, while traditional on-premise vendors such as Sage and Microsoft actually lost share. This shift indicates that decision makers are clearly voting for cloud solutions with their wallets.
Paul Turner is Senior Director of Product Marketing at NetSuite.

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