NetSuite CEO - Cloud vs On-Premise apps battle is won

Cloud-based apps ability to customise, migrate customisations and greater economies have all but won the battle against on-premise apps

The ability to customise cloud-based applications will be the reason companies abandon on-premise applications, according to NetSuite CEO, Zach Nelson.

Talking at a media event in Sydney, Nelson claimed on-premise vendors were holding on to the argument cloud applications are not as customisable as on-premise applications such as SAP or Microsoft’s Great Plains.

“In fact not only is that not true, but ultimately the degree of customisability of cloud-based applications becomes the winning argument as to why everyone will move to the cloud,” Nelson said.

“These applications are far more customisable than traditional applications ever were, for two reasons. One, they have been built on modern technology – they were built after the Internet existed – so things that were really complex to do in traditional software become trivial in [a cloud] application.”

Nelson said the other important factor in favour of cloud applications was the ability for customers to migrate their customisations.

“The problem with today’s applications – and you will hear this from customers – is they are all version locked,” Nelson claimed. “They don’t want to move because they are afraid that it will collapse and break down.”

Nelson claimed NetSuite had upgraded its software more than 400 times in the last year without the loss of a customer’s customisation.

The CEO also said NetSuite was considering building a data centre in the region – it runs its global operations out of Sunnyvale, California – but said that this was not motivated by customer concerns over having their data based locally.

“There is a psychological impact [about having data centres and data in their own country] but what they really care about is the availability of the data, the security of the data and the performance of the application,” he said. “In all of those cases when we moved the DC back to the States we didn’t see any changes. At some point we may come back and build an Asian DC.”

NetSuite previously ran a data centre in Australia via its distributor NetReturn, which it acquired last year. It later closed the data centre and moved the data to its US data centre.

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