NetSuite stresses channel but builds direct sales team

NetSuite stresses channel but builds direct sales team

Cloud vendor rejects reseller criticisms and claims the process is evolving

NetSuite's CEO, Zach Nelson, and regional managing director, Chris Schafer, have defended the vendor’s plans to grow its direct sales force simultaneously with channel recruitment.

The pair confirmed talks with several potential Australian partners and said they were on the hunt for more. At the same time, there are also plans to boost its direct sales team. The cloud-based ERP vendor’s decision comes as its Australian partner, JCurve Solutions, gets ready to launch its SMB offering. JCurve is automatically assigned all NetSuite customers with less than 10 desktops.

Director of Australian partner Online One, Donald McLean, said NetSuite had dramatically improved its channel engagement since the fall and buyout of its distributor, NetReturn, in 2009. He wasn’t overly concerned that NetSuite would increase its direct sales team in Australia.

“They've come a long way in the last six to 12 months,” he said. “Because they've got a direct sales force, they're relatively unknown in Australia. Now is the time to advertise because the buzz is all about cloud computing.

“There's room for them to have more localised resellers with geographic separation. They're being sensible in farming out the smaller players to JCurve. It's not profitable for their sales guys to sell to sub-10 users.”

Nelson attributed earlier dissatisfaction among resellers and distributors as the natural result of the vendor's evolving sales strategy. He also defended NetReturn’s ultimately doomed efforts to become a cloud services distributor.

“We've been experimenting to find out what works,” McLean said. “We were probably the first cloud vendor to experiment with distribution and that's what NetReturn was...When you're a pioneer, sometimes you get arrows in the back.

“It was an experiment that ultimately didn't work but, I actually give ourselves an A+. Sometimes you may fail, but the intention has always been to be good to our partners.”

According to Nelson, NetSuite has nine channel partners operating in Australia and is in discussion with 11 others. It has nine direct sales reps operating out of Sydney and over 600 customers.

“We'll definitely increase that team and there'll be more partners as well,” he said. “There are 380,000 [SMB] customers in Australia. The question is how you reach them – nine reps aren't going to do it and nine channel players aren't going to do it.

“A multi-channel approach is the only way to get out solutions into those hands. Whenever you have a direct sales force in a channel organisation, there will always be this notion of conflict. I believe the market opportunities are so big and the number of players so small that if there is conflict, then someone is gaming the system.

“I look forward to the day we have real channel conflict.”

Schafer agreed with McLean and said bringing on resellers in cities and territories outside NSW was the priority. According to the Asia-Pacific general manager, 75 per cent of resellers would come from Perth, Melbourne, Brisbane, Adelaide and other non-Sydney locations.

“Partners are coming to NetSuite now. It's very different to what it was like a year ago,” he said. “We've got a rule of engagement process. Channels out there are actively generating leads and our sales teams won't compete with that. That's their lead. No stealing or undercutting.

“Last year, we took 10 per cent of our business through partners,” Schafer added. “Our goal is that this year we make it 40 to 50 per cent.”

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