December 18, 2007 |
Update: NetSuite goes live on the NYSE today (Thurs Dec 20) with a raised price of $26 per share.
An IPO’s a-comin’! And the technological debutante having its public market premiere is none other than NetSuite.
Yes, the maker of software-by-subscription for a range of needs, including accounting, CRM (customer relationship management), and e-commerce, NetSuite is celebrating almost 10 years in business by tossing some stocks out to investors the world over – Dutch auction style. The New York Times reported today on the company’s confidence in taking the liberal, come-what-may approach to its release so close to year’s end.
Should shareholders feel equally bullish about NetSuite’s public prospects? Most definitely. NetSuite has for many years shown to be a formidable member of the enterprise software sector, and has throughout its tenure amassed a significant number of clients drawn to the company’s on-demand distribution model. (Services are delivered to subscribers via the Web, a la Zoho Suite or Google Apps, rather than by the mode long preferred by Microsoft and other historically powerful providers.) It has shown a continued will to succeed for since its start, and it’s certain to display marked fervor for future growth for many years to come.
Sure, the company still quarrels with unprofitability. That fact is still quite evident. Despite “a steady rise in sales the past few years” and its present arrangements with some 5,400 customers, it remains in the red. But it appears to be on a relatively smooth path destined north of the divide, showing a revenue increase of 63% in the first three quarters of 2007. Total net loss as a result dropped from $26.9 million to $20.6 million. Of course, the company hopes to propel itself forward dramatically come the IPO. It projects an infusion of $100 million.
Though considerably smaller than most stalwarts of the enterprise software space, NetSuite has established a convenient position in the market. It is not so big as to pass over small businesses looking for a solid, no-nonsense connection to a reputable vendor at costs lower than those offered by the biggest of industry fish. Yet it is not so small as to be overwhelmed by demanding clients with critical and complex issues that require expert attention. NetSuite’s workforce of 600 is significant and nimble all at once, which enables the company to cater its services in ways many others may fail to do.
If nothing else, one must surely appreciate NetSuite’s ability to supply intricacy, solidity, and impenetrable security – and do so entirely by way of an Internet connection.
NetSuite was begun in 1998 by Evan Goldberg, a former Oracle programmer, and was first funded by Larry Ellison, the software giant’s chief executive.