NetSuite makes its play in Japanese SaaS market

NetSuite on Tuesday launched NetSuite Release J, a version of its on-demand ERP (enterprise resource planning) application tuned for the Japanese market.

The offering has been fully localized to meet Japanese regulatory, accounting and tax requirements, according to NetSuite, which built it in tandem with accounting software maker Miroku Jyoho Service and transcosmos, a Japanese IT outsourcer. Pricing for NetSuite Release J starts at ¥60,000 (US$649) per month.

NetSuite, which formed a Japanese subsidiary in March 2006, could be bringing a fully localized product to that market at an opportune time. A September report by research firm IDC predicted Japanese SaaS (software as a service) spending will have a compound annual growth rate of 18.2 percent from 2007 to 2012.

Existing Japanese NetSuite customers had been either using just the suite's CRM (customer relationship management) functionality, or integrating NetSuite with other accounting applications, said Craig Sullivan, vice president of international products, via e-mail Tuesday.

It took NetSuite some time to develop Release J because of the complexity of the project, according to Wilson.

"Not only do we have to ensure the highest style and quality of translation, but deliver localized, J-GAAP compliant financial statements, flexible consumption tax tracking and reporting and a host of Japan-specific business practice and user experience enhancements," he wrote. "This all takes time and it has to be done right in order to gain acceptance in the local market."

Meanwhile, NetSuite's rival, on-demand CRM vendor Salesforce, has made significant inroads in Japan, scoring large customers such as Japan Post noted 451 Group analyst China Martens.

"Japan is clearly a battleground for both SaaS pioneers," she said.

However, Tuesday's announcement is just the latest move by NetSuite into the Pacific Rim. The company recently opened an office in Hong Kong and rolled out its NetSuite OneWorld offering in New Zealand, Australia and Singapore.

"Especially in the SMB space, these [vendors] are just trying to find new markets. It is a volume business," said AMR Research analyst Rob Bois. "When you're going after the SMBs and have a SaaS model like NetSuite it gives you the ability to expand a little more quickly."

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