Running Your Business at the Speed of On-Demand. Running Your Business at the Speed of On-Demand. Serving You Today:

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Running Your Business at

the Speed of On-Demand

Presented by Zach Nelson, CEO of NetSuite Inc.

Software as a Service

Goes Mainstream

Serving You Today:

Zach Nelson

President & CEO NetSuite

Bruce Richardson

Chief Research Officer AMR Research

Delwin Brockett

COO UCG Ltd.

NetSuite: Fastest Growing Software Company in North America

1998: Founded by Larry Ellison & Evan Goldberg Strategy:

Deliver integrated business applications as online services

Results:

• 500+ employees

• HQ in San Mateo, 9 offices worldwide • Largest integrated on-demand customer base

The CPA Technology Advisor Technology Marketing Corporation's Best Software Service

Running Your Business at

the Speed of On-Demand

Bruce Richardson

Chief Research Officer

AMR Research

Today’s Agenda

Alphabet Soup: On Demand, SaaS or

hosted? Single or multi-tenancy?

What’s driving demand for On Demand?

A closer look at market dynamics

Why NetSuite?

Our Definitions:

Hosted Applications – Broad term encompassing

any software application deployed, served, or managed by a third party provider.

OnDemand – Method of business process delivery

such that business demand can be met dynamically

SaaS – essentially software delivered OnDemand Multi-tenancy – SaaS architected delivery model,

where a single instance of the software and data model serves multiple consumers of the service

Single-tenancy – Like traditional ASP, software

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Multiple Options

Our 12 Market Drivers

Today’s buyers have a lower appetite for risk – more focus on proven, lower TCO

IT departments have more projects than they can handle

Moves software from a fixed to a variable cost – can scale up or down.

Generates simplified user interfaces and data models – enables broader access by more users. Quick deployments. Considerably lower startup costs relative to license deployments.

No shelfware.

Rounding Out Our List:

Frees up IT resources that would ordinarily be required to maintain a licensed application. Ability to scale to very small organizations with large enterprise functionality.

Faster and more frequent upgrades often at little resource or financial burden.

No Big Hardware costs.

Moves maintenance back to the software vendor. Forces software providers to focus on customer success, rather than one-time license deals.

Market Adoption of SaaS:

13%

Human Capital Mgmt

16%

Supply Chain Mgmt

125%

Sourcing/Procurement

60%

CRM

300%

ERP

Growth Rates: 2004-05 Application Category

Source: AMR Research

A Closer Look at ERP:

Ideal License Structure:

If you could change your current ERP software license structure, which would your company prefer to buy?

21% $10B+ 20% $1B- 9.9B 12% $250M - $999M 39% $50M - $249M 6% < $50 Million % Selecting On Demand Company Size (Revenue)

19% Total

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Sales Representative

Warehouse Management

Controller

_{Running Your Business at}

the Speed of On-Demand

Zach Nelson

CEO

NetSuite, Inc.

The two most important

shifts in business software

the last 20 years are:

On Demand Software

1

1 Why On Demand Is In-Demand

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On-Demand: Manage Your Business, Not Your Software

Manage it

Yourself Style HARDWARE License Maintain Patch Replace DESKTOP OS License Maintain Patch Replace SERVER OS License Maintain Patch Replace DATABASE License Maintain Tune Upgrade APPLICATION License Back-up Upgrade Migrate On-Demand

HARDWARE DESKTOP OS SERVER OS DATABASE APPLICATION Subscribe HARDWARE License Maintain Patch Replace DESKTOP OS License Maintain Patch Replace SERVER OS License Maintain Patch Replace DATABASE License Maintain Tune Upgrade APPLICATION License Back-up Upgrade Migrate HARDWARE License Maintain Patch Replace DESKTOP OS License Maintain Patch Replace SERVER OS License Maintain Patch Replace DATABASE License Maintain Tune Upgrade APPLICATION License Back-up Upgrade Migrate

Why On Demand Is In-Demand

Dramatically lower cost of doing business

Why On Demand Is In-Demand

Dramatically lower cost of doing business Predictable cost – well-defined TCO Faster development cycles and innovation Ends IT hassles & costs

Instant, anytime, anywhere access

The two most important

shifts in business software

the last 20 years are:

On Demand Software

1

2

2 The Integrated Business Suite

Web _Support

ERP

Sales

Before the Business Suite

Web _Support

ERP

Sales

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Small to Medium Enterprise

Accounting

SFA

Support

Web

Warehousing

NetSuite: Your Business On Demand

Marketing Campaigns Sales Force Automation Support Mgmt Partner Mgmt Order Mgmt Financials Inventory Payroll Purchasing Shipping Vendor Portal Customer Portal Web Site Web Store

What a Good Idea

Microsoft Business Portal Dynamics NV Dynamics XP Dynamics GP Dynamics SL Dynamics NV Dynamics XP Dynamics CRM Dynamics SL Commerce Server Ecommerce Manager Support Manager CEO Sales Rep/ Manager Shipping Manager CFO

The View From

My Office

NetSuite in Action

Running Your Business at

the Speed of On-Demand

Delwin Brockett

COO

UGC Ltd.

UCG Ltd.

UCG is one of the nation's premier independent providers of business information. Known as a portfolio of business publishing companies that provide guidance, information, analysis, and solutions to customers worldwide.

Headquartered in Rockville, Maryland

Diverse product set – electronic access, databases, newsletter, directories, software, certifications, and conferences

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The Business Issues

25 years of organic growth plus more than 35 acquisitions Operating the business became the focus of the business – rather than our customers, our products, and our markets

Had silo-ed around product and business unit distinctions Operated from different physical locations

Operations lagged an entrepreneurial environment Solved the same problem too many times

Key Drivers

Address the legacy Better know our own business

Create an acquisition integration strategy without being overly burdensome or expensive to deploy

Requirements

Mid-sized does not mean simple!

Consolidated system to tie together the diverse business units, customers, and business information

Anytime, anywhere availability Required flexibility

Separate businesses versus Consolidate reports

Different customer bases versus Leverage customers

Diverse products versus Package offerings

UCG wants to understand its customers and serve its markets, not run IT!

Solving the Problem

Wanted an ERP footprint for seamless flow of information across all our business functions

Looked at on-premise solutions – but with the diversity of locations and businesses would have needed lots of infrastructure – cost prohibitive.

At the same time, looked at on-demand models and decided that they provided the better alternative

Easy deployments via the web Available anywhere, anytime User interface easily understood

The NetSuite Deployment

Started in January 2006 Branded program NetSuite e-360

Joint effort among COO, CFO, and Presidents of Business Units Teamed with NetSuite Professional Services

Communicate, Communicate, Communicate

By May 2006 had deployed:

The complete financial and accounting architecture for all business units and corporate consolidations

The SFA and CRM components for one of our business units

1 down, 7 to go!

Value Derived: Intelligent

Dashboards Reign!

First, derived value on transactional issues

From prospect through cash into renewals all within one system

Second, acquisition platform for quick integration

Consolidated financials into one system Target environment clearly defined

Biggest “WOW” moment, however, is in business intelligence and NetSuite’s dashboards

Clearly see where we’ve been and more importantly where we are going

Single point of consistent information

e360 – Functions within UCG

Conferences & Events

Campaign Management & List Systems Campaign Management & List Systems Centralized Information Customer Invoicing

Product Trouble Ticket Employees G/L, A/R, A/P, P/O

Centralized Information

Customer Invoicing Product Trouble Ticket Employees G/L, A/R, A/P, P/O

Customer Invoicing

Business Intelligence

Sales & Customer Service

Financial Operations

Customer Self Service • Executive Dashboard

• Consolidated Analysis • Single Data Source

• Business Unit Customized Invoicing

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Running Your Business at

the Speed of On-Demand

Zach Nelson

CEO

NetSuite, Inc.

Myth: Just CRM

Customers, even smaller

ones, will never be willing

to trust their core

operational processes to

an outsourced provider.

Shai Agassi, SAP, IDG News

“

”

Myth: On-demand

apps aren’t

customizable

On-Demand

Customization

Traditional

Software

Customization

¾ Clicks before code ¾ Industry standard javascript ¾ Industry standard web services ¾ Carries forward with upgrades ¾ Customization encouraged

UStraight to code

UProprietary programming language

UHard core integration

UBreaks with upgrades

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What All Businesses Need

Better, more effective end-to-end business processes management and visibility Ability to make better, faster decisions Reduce costs in non-strategic areas Invest in differentiation