Former Managing Director, Asia at Netsuite
Ronen Lamdan is Chief Revenue Officer of Panalyt, the leading People Analytics software vendor. In addition, Ronen is a thought leader in cognitive automation, artificial intelligence and process optimization across industries. He has extensive cross-industry experience in IoT, big data, analytics, machine learning and complex systems integration helping clients drive increasing value out of data through greater understanding. Prior to Panalyt, Ronen established the Asia/Pacific region for WorkFusion (2017-2020), a leader in Intelligent Process Automation solutions, as the first person on the ground, delivering $3M in revenue in 2018 and growing the team to 40 people across Singapore, Japan, India and Hong Kong. He was responsible for leading and expanding NetSuite’s business across Asia as Managing Director (2011-2013), driving triple-digit growth and held leadership roles at Microsoft, IBM and Mercury.Read moreView Profile Page
For a new player coming into a market, with some massive, powerful, very well-resourced, deeply entrenched incumbents, how did the market landscape look for NetSuite, in Asia, when you arrived?
If you look at it purely from what’s existing, in the current situation, you’d have to be absolutely insane to try and get into the ERP space, for a number of reasons. The companies that were entrenched and really the leaders in that are SAP, with its might and market share; Oracle, with its might and market share. Then you’ve got Microsoft, with its Dynamics set of products. The flipside is, the buyer for the ERP systems is, typically, the CFO, who is very risk averse and really does not want to take a chance on a new vendor, let alone a vendor who put the most sensitive data that a company has, in the cloud. You’ve got a perfect storm and great reasons why not to go after the ERP space. The partner ecosystem, as well, is very, very heavily entrenched, with those three top vendors.
Then you had tier 2, with companies like Sage, who were going after the mid-market. Then SAP signalling that they were going to go downstream, to the mid-market, because they’ve sold to all of the large enterprises. You see these market dynamics and it looks like one of two things. Either, you really don’t need to go after this, because it’s a very mature market and there is no room for another vendor. Or you look at it and say, well actually, just because of those, there is a market that is ripe for innovation. That means that you have to do something new; you have to bring some innovation or technology or to do something very different. The last thing that any company ever wants to do is to make the wrong decision on an ERP and then have to replace it. It is really like having a complete heart transplant. You definitely don’t want to do that.
If you are crazy enough to go after a market with these dynamics, you really need to find out what your differentiator is, not from a technology perspective, but from a customer impact perspective. That’s really what we did at NetSuite. NetSuite comes along, into this very mature market and we’re saying, well, you remember all that stuff that you used to do before and the old way of doing it, well now, you could put your ERP on the cloud. Again, this is the company’s most sensitive data and now we’re going to come along and say we’re going to put it on the cloud. But what we really did was really focus on how we could help customers, especially fast-growing customers, to accelerate that growth. The ERP, just by definition and the way it sounds, it is an old, slow-moving technology.
What we did was that we found those areas, by talking with customers, by just the fact that we put your ERP on the cloud, how we could use that to grow their business. What that meant was, suddenly, your ERP goes from being something that is behind the firewall and you never let anybody touch, because it’s your most sensitive data, to now being an area where you can collaborate. You use the fact that it is open to vendors and customers and suppliers and partners and, suddenly, you’re opening up your ERP, obviously with all the security metrics in place, to your ecosystem and they’re going to help you grow.
Now, companies that used to be in the manufacturing space and looking at distributing their products, the cloud suddenly enabled them to put an ecommerce layer on top of their ERP, very easily, tapping into data around availability within the warehousing, going into information about when new products would be available; bulk information, pricing information. Now you could go into the ecommerce space, literally with the flip of a switch, from manufacturing, to ecommerce. What it enabled these companies to do is, suddenly, really leverage the fact that they could use this system, which other companies viewed as super-secret and secure, and open it up to new business models. That was incredible.
Some of our customers, at that time, were companies like GoPro, who were experiencing extremely high growth and if they were to have an ERP system that was the legacy form, it would take them forever to leverage new opportunities. But NetSuite really allowed them and enabled them, to accelerate the growth that’s very well-deserved and that they are seeing, even today.
As you were looking at the market, establishing where you wanted to build a presence, where the greatest opportunity was, how did you look at that process and which customers did you end up settling on?
That’s very important; knowing who not to go after and where your sweet spot was. We were very clear who we were not going after. These were banks, insurance companies, financial services, governments who, at that point, just to get them over the hump and get them into cloud, would have taken a Herculean effort. There’s a few more in that space. But if you look at companies in wholesale distribution, in manufacturing and in the ecommerce space, there was a sweet spot there where they really were struggling and really going with an old-school ERP would have been a terrible choice for them. Having NetSuite, with the connectors and the ability to leverage the data, to do demand forecasting, was incredibly important for them and we just saw these companies grow and flourish, on our systems.
The other type was multinationals who were really struggling as they entered Asia, to implement another instance of SAP, in those countries. So we went after companies which were multinationals, who had multi-currency, different subsidiaries, who were very quickly able to aggregate their data and even send it to their mothership, that had SAP. It was a coopetition with the big ERP vendors, that allows us to infiltrate and help companies like Procter & Gamble and Unilever, in Asia.
For that category of fast-growing companies, how did that work? What were the conversations like? An element of that is, in terms of your go-to-market, your distribution, how was that set up?
The important thing was really to understand the business and the business drivers, in terms of the external environment that these customers were facing. I’ll give you an example of another one. This was at the time when I was running NetSuite in Asia and Hong Kong decided to establish itself as a global hub for wine trading and distribution. They did away with the tariffs, removed goods and services tax and were really encouraging companies to set up Hong Kong as their global wine distribution center, which was a real disruption in the market. What happened was, a lot of these companies started to pop us as wine wholesale distribution. What we did is, we started to work with a select number of partners, with a small number of these customers, to really understand the nuances of what it is that made those companies run and how, specifically, wine distribution worked.
Once we understood, we were able to templatize that and go after 20 and then 30 and then 50 different wine wholesale distributors who, just because of market disruption, were popping up in Hong Kong. It’s really important to understand the global influence.
The second was companies that were growing very quickly. One of our customers was Garena, who are now called SEA, a large gaming company and a few others which, at that point, were starting out as ecommerce companies, but we knew they were going to grow very quickly. They also knew that the old way of running their financials and CRM just wouldn’t help them scale. Having something on the cloud, with no infrastructure, gets set up quickly but they know it will scale with them, as they started to establish different subsidiaries in multiple countries, really helped us to help them grow.
I think the ultimate measure of success was when a few of these CEOs, on different occasions, would take me aside as we had our periodic business reviews and they would say, without your product and NetSuite, we would have struggled to grow as fast as we could; so I wanted to thank you for helping us to grow. These were owners of these companies and it was just a great feeling to be able to enable them to build these sustainable businesses and help them grow it.
How was your sales team set up for that, in terms of the structure?
When I came on board, we had six people, across Asia. But given the growth that we were seeing and during the period that I was there, we were growing in the region of 160%. It was the fastest growing region, globally, so we tripled the team. The important part was, as you grow, especially in Asia, it would be a fool’s errand to hire and place people in all the countries. A better way would be to leverage the partner ecosystem that already, not only has relationships with your customers, but also has domain expertise, in those industries. They also bring some intellectual property to the conversation, as well as being able to have local support for those customers.
Being able to identify the right partners to partner with and then quickly enable them and get them to revenue quickly, was a critical component of that go-to-market. One of the things that we were doing was also helping those companies transition from the old-school way of selling large, upfront license deals and then going to annuity, with the cloud. Showing how the financials of that, and the recurring revenue, would ultimately help them to be much more profitable and help to plough that money back into their business, to help them grow. So it really started with identifying the right partners and, again, knowing which partners not to engage with. The tier 1 partners of SAP and Oracle, we didn’t even want to talk to them, because their business was so entrenched and you can never get them to see that there’s an alternative. But the tier 2 and tier 3, who had the ERP domain expertise and we could help them to scale out their own partner business, was the way to go.
The measure of our success was that the new partners that we brought on board and enabled, drove 25% of our net ARR, in their first year of becoming partners. We were clearly finding the right partners and they were seeing revenue in their first year, from becoming NetSuite partners.