Is it the end of history? Cloud computing is the last great computing architecture of our lifetime, according to NetSuite CEO Zach Nelson. He made the bold claim in his keynote address to the 6700 delegates at SuiteWorld, the company’s annual customer event in San Jose.
“I think it is the last computing architecture, there’s certainly nothing I can see after this. Maybe in a thousand years from now there will be something, but this is definitely the last architecture in our lifetime and our children’s lifetime.”
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If such a suggestion invites obvious accusations of hubris, we perhaps should allow NetSuite its moment in the sun.
From its humble beginnings 18 years ago, the company has emerged — along with Salesforce — as one of the genuine star players of the cloud-based SaaS world. This year it will reach a key milestone as it approaches a billion-dollar run rate.
It has over 30,000 customer companies in just about every country on the planet. Its universe of customers generate almost $US190 billion of revenue. And Gartner says the company has lifted from 8th to 6th place in terms of global software companies.
The money men are likewise happy. NetSuite is profitable and also generating strong cash flows approaching $US150 million. It is growing at a clip that its nearest rivals in the financial management software category can only envy — 45 per cent compared to Microsoft at ten per cENT, and Oracle (with whom it shares a key shareholder in Larry Ellison) on about eight per cent.
And, as Nelson likes to point out, rival SAP is in sharp reverse on the software growth front.
(It is also worth noting that earlier this year Nelson told analysts he expected growth rates of 20 to 30 per cent are sustainable over the long term.)
He told delegates their companies needed to embed algorithm-driven decision making into their systems, embrace hybrid business models that incorporate products, services and products as services, and genuinely engage globally.
“There are big implications because not only is it the last technological architecture but it is also the last business architecture,” he said. “If you aren’t building your business around these concepts — around engaging with your customers anytime, anywhere and on any device with access to all your business data — you are not going to have a very good business in future.”
He noted, however, what while it is easier for companies who started in the last five years to be born on the cloud, that isn’t the case for large established incumbent businesses.
“It’s harder for those companies to figure out how to get to the next business architecture. So the other thing we have been doing for the last ten years is helping big companies act like small companies and to give them the abilities to transition to where they need to go in the cloud economy.”