NetSuite CEO Zach Nelson Pilots the Cloud Computing Industry
Nelson says all companies, big and small, must virtualize their business processes — and NetSuite has the tools they need to do so.
Jonathan Sprague
Print
E-mailThis past November, Zach Nelson, president and CEO of San Mateo, Calif.-based NetSuite Inc. (N), was in Brno in the Czech Republic for the opening of the company’s new cloud enterprise business suite development center, which, he points out, is Europe’s first. While there, Nelson, who grew up in Omaha and attended high school in a monastery, learned about St. Thomas’ Abbey, once an Augustinian monastery. “It’s where Gregor Mendel did his famous genetic studies,” says the bearded, bespectacled CEO. “We did our big opening event there, and I spent the whole time talking to the abbot of St. Thomas’ about Mendel’s work. It was pretty cool.”
MORE ON NETSUITE
Customization Is Key
It should be no surprise that Nelson gets so enthusiastic about timeless, impactful ideas, like the ones that emanated from Mendel’s experiments on the pea plants in his monastery garden. Nelson, speaking from a leather couch in his office, which is decorated with prints of woodcuts by a Japanese artist, a bobblehead of an Oakland A’s pitcher and a photo of Nelson at Augusta National Golf Club, says a major reason he took the CEO job at cloud computing provider NetSuite in 2002 was that it was founded on two “big ideas” in which he firmly believed.
The first was having a comprehensive software system to run all aspects of a company’s business. “Most software applications are designed to run a department — accounting, sales, warehouse, manufacturing,” Nelson says. “The big idea behind NetSuite was to build an application designed to run a business. Because it’s one business process, not eight.” According to Nelson, it’s hard to tie multiple applications together in a cohesive way, and that difficulty leads to what he calls the “software hair ball.” It’s also extremely expensive; he says managing the hair ball can cost four or five times the original cost of the applications themselves.
NetSuite’s second big idea, Nelson says, was delivering its single software application over the Internet, a concept better known these days as cloud computing or software as a service — SaaS for short. (For more on this trend, see “Tech for Tomorrow.”)
IN MY OWN WORDS: ZACH NELSON, PRESIDENT AND CEO, NETSUITE
A perfect day outside work is taking my dog on a long walk.
The best management advice I ever got was from Scott McNealy, co-founder of Sun Microsystems Inc., who told me, “Goals only limit you.”
My first job was as a caddy at the Omaha Country Club at age 10.
My favorite book is Moneyball, by Michael Lewis. I like it so much, I put Billy Beane on my board!
Even though Nelson contends that NetSuite has come a long way in advancing the technology behind its products and continues to do so today, those twin concepts remain at the core of everything the company does. In fact, Nelson says, those two ideas are unchanged enough that he still displays in sales meetings the very same slides he used when he first came to NetSuite eight years ago.
According to COO Jim McGeever, the advantages that NetSuite customers receive are increased efficiency and cost savings. He explains that companies using NetSuite — which are charged a monthly fee that amounts to about $100 for each individual user of the product — benefit costwise because they can take advantage of NetSuite’s size. “We have a data center staffed by IT professionals and network and security experts,” he says. “Because I have a single code base everyone is using, a single product, I get to spread my people across thousands of customers. If you were doing this yourself, you would have to have someone who monitored security, someone who does backup and database administration, and on and on. I get to leverage all of those costs as well as my hardware costs and get enormous economies of scale.”
Kevin Thompson, the president and CEO of SolarWinds Inc. (SWI) and a NetSuite board member, says that his company first started using NetSuite in 2006. “When we first implemented NetSuite we were doing $25 million in revenue annually, and now we are doing $170 million,” he says. “We were just in North America then, and now we are in 10 countries and many different currencies. NetSuite has allowed us to grow very quickly and make acquisitions and integrate them quickly.”
