Client Success Story: NetSuite, Inc.
Customer
NetSuite, Inc. is the leader in on-demand business software suites and the fastest-growing software company in North America (source: Deloitte Fast 500 study). NetSuite enables companies to manage all key business operations in a single system, which includes accounting/Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Ecommerce. NetSuite is delivered as an on-demand service, so there is no hardware to procure, no large, up-front license fee, and no complex set-ups. Finally, NetSuite's patent-pending "real-time dashboard" technology provides an easy-to-use view into role-specific business information that is always up-to-date. For more information about NetSuite, visit: www.netsuite.com
Challenge
Even the fastest-growing software company in North America had challenges, namely how to expand into Japan, China and the rest of Asia without incurring massive costs for localizing such a complex product for use in those countries. With their recent expansion into the UK, NetSuite realized the incremental costs for not only the offices, employees, marketing and support were large, but in particular the amount of time, effort and cost to get the ERP portion of the product working properly with local standards was prohibitive. Being a pre-IPO startup with tight cashflow and the need to show a profit prior to their IPO, NetSuite nearly gave up on entering Japan (the world’s second largest market after the US for ERP products).
Overview of RTM Solution
After an initial engagement to assess the revenue and market potential for Asia, RTM Asia not only showed NetSuite executives a way to enter Japan sooner rather than later, but also that it was possible to make the entire exercise self-funding by forming a Japan subsidiary and having Japan partners invest in NetSuite by buying minority equity in the Japan subsidiary. With a unique proposal of equity in the Japan subsidiary, non-recurring engineering (NRE) fees to pay for the localization and new functionality and pre-paid licenses, RTM Asia enabled NetSuite to sell 25% of their Japan subsidiary in return for more than $18 million dollars. This investment was immediately put to work to build the Japan product and hire the Japan sales and support team. Currently plans are in place to leverage the Japan success and product enhancements to enter the China and Korean markets.
CEO Quote
For competitive and revenue growth reasons, we urgently needed to expand in Asia, however until we contracted with RTM Asia, we were at a loss for how to do it effectively and inexpensively. The RTM Asia team professionally and expertly guided us on all facets of our market entry: product requirements, market sizing, budgeting, partner selection, fund-raising, subsidiary formation and operations—literally everything! The RTM Asia team worked seamlessly as part of my extended executive team, which minimized my and my executive team’s workload throughout. I shudder to think about how much time, effort and money we would have spent and how slowly we would have progressed had we not brought in RTM Asia. -- Zach Nelson, CEO, NetSuite, Inc.
What RTM Asia Provided
After completion of an initial market entry analysis contract, RTM Asia was awarded a long term contract to build and drive NetSuite’s Asia business on an outsourced basis. The scope of the work performed included:
Comprehensive market entry analysis and cost assessment by country
Creation of detailed market entry plans, budgets and board presentations
Product localization needs analysis, product plan development and outsourcing partner screening and management
Channel partner screening, recruiting, contract negotiations and day-to-day management
Coordination of executive visits, press conferences, marketing events, campaigns and leads. Local language website development assistanceVirtual office, staffing and bookkeeping services
Company formation, tax and legal document filings with the authorities
Employee recruiting, onboarding, benefits management and related services
Investment package development, strategic partner recruitment and end-to-end management of the negotiation process (over $18M raised to date)
The Results
By leveraging RTM Asia’s services, NetSuite has accelerated its time-to-market and revenue by more than 2 years and has received more than $18 million dollars from strategic partners in the region to fund their efforts there. As a result, revenue in Japan alone is up five fold over the previous year and Asia as a whole has more than quadrupled in the first year of RTM Asia’s involvement. This enhanced presence in Asia has made NetSuite, Inc., naturally appear more valuable to investors in the crucial run up their IPO on the NASDAQ.