NetSuite Recruitment Effort Nets 100 New Reseller Partners

NetSuite’s effort to recruit new channel partners by allowing resellers to keep 100 percent of first-year subscription revenue has attracted some 100 qualified solution providers to the vendor’s partner program.

CEO Zach Nelson provided the update about the company’s ’NetSuite SP 100’ program, launched in March, during NetSuite’s first-quarter earnings call Monday.

For the quarter NetSuite reported sales of $43.9 million, up 5.7 percent from $41.6 million in the first quarter of 2009. But the company also reported a bigger net loss, $7.1 million compared to the company’s $3.7 million net loss one year earlier.

NetSuite, however, said a number of key benchmarks showed year-over-year growth, including a 27 percent increase in bookings, and improved operating cash flow.

The SP 100 program is part of a larger effort by NetSuite, which supplies on-demand ERP, CRM and E-commerce applications, to recruit channel partners and grow sales through channel partners, particularly into vertical markets. Before the recruitment drive about 180 VARs generated about 20 percent of NetSuite’s sales.

Last month NetSuite held its SuiteCloud 2010 partner conference in San Francisco where it unveiled the next generation of its SuiteCloud development platform for reseller and ISV partners.

Nelson said the results of the SP 100 program demonstrated NetSuite’s ability ’to engage partners of all stripes.’ The company is especially recruiting solution providers that work with NetSuite competitors, including Sage, Microsoft and SAP.

Nelson has been particularly critical of SAP and Microsoft and their cloud computing efforts, and in the earnings call he ridiculed Microsoft for a ’bizarre’ offer to get NetSuite customers to switch to Microsoft Dynamics GP applications.

Nelson said most of the newly recruited partners continue to sell products from other vendors -- something he said he does not oppose. ’I would love for [resellers] to demonstrate NetSuite side by side with Great Plains,’ he said, using the former name for Microsoft Dynamics GP.

Next: Nelson Asked About Outage

Nelson, in response to a financial analyst’s questions about service level agreements, offered a few more details about last week’s reported service outage during which the NetSuite applications were unavailable to customers.

Such outages, suffered by Salesforce.com, Amazon, EMC Atmos and other cloud-computing vendors, are often cited as one reason some businesses are hesitant to adopt cloud computing.

NetSuite suffered two sequential outages on April 27, one that lasted 33 minutes and affected 75 percent of NetSuite’s customers, followed by a second outage that lasted 17 minutes and affected 95 percent of NetSuite’s customers, Nelson said, but he did not offer more information about the cause of the outage.

Between May 2009 and April of this year NetSuite reported total uptime of 99.97 percent, according to NetSuite’s Website.

NetSuite also said that Jim McGeever, the company’s chief financial officer for the past decade, would be promoted to chief operating officer effective July 1. Senior vice president of finance Ron Gill will become the company’s CFO.